Purch Supply

PURCHASING

AND

SUPPLY MANUAL

FOR

PUBLIC HEALTH

ORGANISATIONS

JANUARY 2006

stwem

Typewritten Text

PRINT WARNING - Printed copies of this document or part thereof should not be relied upon as a current reference document. ALWAYS refer to the electronic copy for the latest version.

TABLE OF CONTENTS

CHAPTER 1 – PURCHASING PROCEDURES 1.1 INTRODUCTION ................................................................................................. 1.1 1.1.1 General Definitions.................................................................................................. 1.2 1.1.2 NSW Health Procurement Advisory Panel.............................................................. 1.4 1.2 RESPONSIBILITIES OF OFFICERS INVOLVED

WITH PROCUREMENT ..................................................................................... 1.5 1.2.1 Drug Purchasing ...................................................................................................... 1.5 1.3 GENERAL RESPONSIBILITIES ....................................................................... 1.6 1.3.1 Best Practice ............................................................................................................ 1.6 1.3.2 General Orders ......................................................................................................... 1.7 1.3.3 Standing Orders ....................................................................................................... 1.8 1.3.4 NSW Government Expectations .............................................................................. 1.8 1.4 PROCUREMENT STRATEGY........................................................................... 1.11 1.5 HEALTH SERVICE PROCUREMENT............................................................. 1.13 1.6 STATE CONTRACTS CONTROL BOARD (SCCB) -

GENERAL PURCHASING LIMITS................................................................... 1.13 1.6.1 Goods and Services/Works up to $3,000 incl GST ................................................. 1.13 1.6.2 Goods and Services/Works over $3,001 and up to $30,000 incl GST..................... 1.13 1.6.3 Goods and Services/Works over $30,001and up to $20,000 incl GST.................... 1.13 1.6.4 Goods and Services/Works over $250,000 incl GST .............................................. 1.13 1.6.5 Printing................................................................................................................. .... 1.13.1 1.7 FLY BUY CARDS ................................................................................................. 1.14 1.8 PRIVATE SECTOR PARTICIPATION IN PUBLIC

HEALTH SERVICES ........................................................................................... 1.14 1.8.1 Government Guidelines ........................................................................................... 1.15 1.8.2 General Principles.................................................................................................... 1.16 1.9 CO-ORDINATION OF NSW GOVERNMENT

TELECOMMUNICATION.................................................................................. 1.16 1.10 SUPPLY OF GOODS FROM HOSPITALS TO OTHER

ORGANISATIONS ............................................................................................... 1.17 1.11 CONTRACTS WITH PRIVATE HOSPITALS/NURSING HOMES .............. 1.18

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1.12 LEASING OF EQUIPMENT ............................................................................... 1.19 1.12.1 Background .............................................................................................................. 1.19 1.12.2 Considerations ......................................................................................................... 1.19 1.12.3 Provision of Lease Facilities .................................................................................... 1.19 1.12.4 Probity Issues ........................................................................................................... 1.20 1.12.5 Approval Levels ....................................................................................................... 1.21 1.12.6 NSW Government IT Master Leasing Facility ........................................................ 1.21 1.12.7 Classification of a Lease .......................................................................................... 1.22 1.12.8 Guidelines for Lease Classification ......................................................................... 1.23 1.12.9 Standardised Clinical Equipment Evaluation and Indemnity Agreement

for Loan and Trial (of Clinical Equipment) Forms .................................................. 1.24 1.12.10 Procurement of Photocopier Equipment and Other Imaging Devices ..................... 1.24.1 1.13 CONTRACTORS – CONDITION WHEN ENGAGING .................................. 1.34.1 1.14 RADIATION ONCOLOGY EQUIPMENT – HEALTH PROGRAM

GRANTS ................................................................................................................. 1.34.2 1.15 RADIATION ONCOLOGY EQUIPMENT – HEALTH PROGRAM

GRANTS ................................................................................................................. 1.34.2 APPENDICES 1-A NSW Government Code of practice for Procurement. Details of Specific Practice Requirements ................................................................................................. 1.35 1-B Standards of Behaviour ............................................................................................... 1.40

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CHAPTER 1 – PURCHASING PROCEDURES 1.1

1.1 INTRODUCTION Officers dealing with stores and services should acquaint themselves with the relevant sections of the following handbooks/documents: • The current issue of the State Procurement’s Contract Schedule and the General and Special

Conditions of Contract • Accounts and Audit Determination for Public Health Organisations • NSW Government Procurement Policy • NSW Government Code of Practice for Procurement The attention of all officers is directed to the confidential nature of prices and conditions shown in the State Procurement Contract Schedule and circulars. This information is to be used only for official purposes and must not be conveyed to persons or firms who are not holders of the particular contract. Attention is also drawn to the necessity to maintain strict control over all contract schedules, which should be kept in a secure place when not in use. To ensure the security of contract schedules areas are required to keep a record of the schedule issued to each officer and arrange a regular check to see whether the schedules are in the custody of the officers concerned. If it is found that any of the schedules has left the possession of an officer a report, giving all relevant details, should be furnished immediately to senior management. The State Procurement Policy is to be adhered to. It is to be noted that the “Preference” element of the policy applies to all purchases not just tenders. (Detailed in Chapter 3 Appendix 3-B.)

Public health organisations irrespective of the source of funds, are to ensure competitiveness in all their dealings whether of an expenditure or revenue nature. If revenue ventures are undertaken, e.g. vending machine contracts, baby photos, telephones, televisions, etc quotation and preferably tender action as specified in the Supply Manual should be undertaken. The extent that the matter is advertised should be based on an assessment of the benefits to be derived by the person or contractor offering the service. Staff involved in revenue ventures are to make themselves aware of the requirement under the Trade Practices Act. Methods of procurement and disposal should be chosen to achieve the best value for money, taking into account as appropriate quality, reliability, service support, initial and ongoing costs and other factors relevant to the circumstances. Ordering direct from NSW Government period contracts should always be the first option for common-use items for all NSW Government agencies if the product and contract conditions meet requirements. (See Chapter 2) All officers are to be aware of their responsibilities in respect to health and safety when engaging contractors. The Department of Health issued PD2005_227 “Better Practice Guidelines for including health and safety in the engagement, management and evaluation of contractors in health services”, the document incorporates an OH&S risk management approach to contractor management and provides a framework for local procedures in compliance with current OH&S legislation. The content of PD2005_227 is included in Chapter 3 Appendix 3-C of this manual.

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Although equipment proposed to be procured may be built to appropriate Standards and the supplier/ manufacturer may have complied with the NSW Occupational Health & Safety Act 2000 and NSW Occupational Health & Safety Regulations 2001, this does not absolve Health Services and their OH&S responsibilities. Health Services need to ensure that their OH&S obligations are addressed and that equipment being procured is fit for purpose, used in accordance with supplier/manufacturer instructions and that staff are appropriately trained in its safe use. Health organisations are not to utilise contracts organised by the Commonwealth Government or other non-NSW state government entities. The content of this manual incorporates the general provisions of the ICAC document “Contracting for Services: The Probity Perspective”. In relation to the public health system (Areas, hospitals etc) the Director-General of Health has the authority to determine the purchasing policy and procedures to apply. Non-adherence to stated policy requires approval by the Director-General (or delegate). All applications for exemptions from these policy requirements should be addressed to the Department’s Director, Asset & Contract Services. 1.1.1 General Definitions Agency Health Service. Any one item Relates to the total value of the purchase of any one item or to one line

of requisition. An item may not be “split” into its components nor a succession of orders for quantities of the same item issued for the purpose of avoiding any limitations to any delegation of authority. In relation to period contracts, the cost over the life of the contract is the determining factor. (See Period Contract next page.)

Authorised officer The officer authorised to incur expenditure on various items in line with Health Service delegations.

Authorising officer The officer appointed, authorised to pay claims. Bid shopping The practice of trading off one tenderer’s prices against another’s in

order to obtain lower prices. Client Party calling for tenders and/or awarding a contract. Construction All organised activities concerned with demolition, building,

landscaping, maintenance, civil engineering, process engineering, mining and heavy engineering.

Committee The CACC consists of representatives of key agencies involved in construction procurement and assists the Government in the development of consistent and effective construction procurement practices, and in promoting the application of these practices by agencies.

Employee Person whose employment is governed by a contract of service, or a person deemed to be an employee under Australian or NSW industrial law.

Employer Entity that employs a person or persons under a contract of service or a person deemed to be an employer under Australian or NSW industrial law.


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Employer association Organisation representing the interests of employers that is registered

under Australian or NSW industrial law. Fair Being unbiased, reasonable and even-handed. Being fair does not mean

satisfying everyone or not reasonably pursuing one’s legitimate interests. A fair decision may still adversely affect parties.

Goods

Includes without limiting the generality of the expression: i) assets such as equipment, plant, machinery, motor vehicles, tools,

furniture, furnishings, floor coverings, office equipment, scientific apparatus, books and appliances which have useful lives of more than one year, hardware, medical and pharmaceutical supplies, information technology software and hardware; and

ii) consumables such as stationery and provisions which are generally used up within a year.

Motor vehicles are included in the definition of stores (note that only certain officers have the delegated authority to approve the purchase of motor vehicles and/or accessories).

Industry association Organisation representing the professional, trade or commercial interests of its members in an industry.

Infrastructure Fixed assets that support economic and social development in a fundamental way.

Intellectual property Inventions, original designs, and practical applications of good ideas protected by law through copyright, patents, registered designs, circuit layout rights and trademarks. Also includes trade secrets, proprietary know-how and other confidential information protected against unlawful disclosure by law and through additional contractual obligations, such as confidentiality agreements, contracts and conditions of tendering.

Monitor Regularly collect information to review performance against specified criteria.

Party Client, tenderer or service provider. An entity’s role in a procurement will determine whether it is a client, tenderer or service provider for that procurement.

Period contract

Period contract means a contract under which there is a standing offer for the provision or disposal or goods or services over the period of the contract on the order of any customer for whom the contract has been arranged. Option periods are considered to be part of the term of the period contract. A contract over a period of time for the supply of services or goods where the price and quantity/extent of the service is known is not a period contract, it is a contract for the provision of the service/goods. The cost over the life of the contract should be the determining factor as to if and when tenders should be called viz over $250,000.

Procurement All activities involved in acquiring goods or services either outright or by lease (including disposal and lease termination). Includes acquiring consumables, capital equipment, real property, infrastructure, and services under consultancies, professional services, facilities management and construction.


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Public Health Organisations

Public health organisations as specified and scheduled in the Health Services Act and the Public Health System Support Division and bodies created under Part 1A of the Health Services Act.

Purchasing officer

Term used to cover those officers responsible for the purchasing of orders.

Quotation/tender

Whatever the value of the goods or services, “quotation” refers to oral offers only (unless written is specified) while “tender” refers to written offers.

Service provider Includes contractors, subcontractors, suppliers and consultants that contract to provide goods or services.

Services

Includes without limiting the generality of the expression advisings (other than legal advisings) consultancies, management of information technology projects, printing services, installations and the performance of professional or trade operations of any kind (see separate conditions related to the procurement of consultancies and printing).

State Contracts Control Board

The SCCB is established under the Public Sector Employment and Management Act 2002. Its membership includes representatives from the central, budget and non-budget agencies. It assists the Government in the development of consistent and effective non-construction related procurement practices, and promoting the application of these practices by agencies.

Tender Includes a price, bid, offer, quotation, consultant proposal or expression of interest lodged in response to an invitation or request for tender.

Tenderer Entity submitting a tender. Union Organisation of employees also referred to as a ‘trade union’, which is

registered under Australian or NSW industrial law. This term also includes the Labor Council of New South Wales.

Value for money The benefits, compared to whole-of-life costs. 1.1.2 NSW Health Procurement Advisory Panel The Department has established the NSW Health Procurement Advisory Panel. The Panel will be the principal source of advice on all major NSW Health procurement projects, except for those matters dealt with by the State Contracts Control Board and the Board of Reference and Advice, Department of Commerce. The objects of the Panel are to: • promote and promulgate best practice in procurement by public health organisations; • provide advice to the Director-General, the Department of Health and public health organisations

on the procurement of buildings, equipment, goods and services, consumables and contractors; and • monitor the procurement practices of the Department of Health and public health organisations. The Panel is comprised of: • the Deputy Director-General, Health System Support; • the Director, Asset and Contract Services; • a nominee of the Director-General, Department of Commerce; • a health service chief executive nominated by the Director-General; • a probity auditor; and • two independent persons nominated by the Director-General.


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1.2 RESPONSIBILITIES OF OFFICERS INVOLVED WITH PROCUREMENT Under no circumstances are prices or conditions that are quoted/tendered to be divulged to any parties until quote/tender action has been finalised. Confidentiality of prices and conditions is to be maintained. An officer shall not knowingly requisition, attempt to obtain or obtain any goods or services, or dispose or attempt to dispose of goods, in a manner designed to circumvent or avoid any provisions of this Manual. Officers must disclose in writing to their immediate superior or other appropriate senior officer, any financial or other interests held by them immediately upon becoming aware that a potential conflict between personal interest and official duty, whether real or apparent, has arisen or is likely to arise. Special attention is directed to the necessity of: • Effecting economy in dealing with and in the use of all health service property, in the methods of

working, and in the number of officers employed; • Ensuring that goods or services requisitioned or otherwise obtained shall be only such as will

suffice for the reasonable needs of the health service or area and that excessive stocks of goods are not carried therein (except for bulk purchases in order to effect economies);

• Encouraging officers to submit suggestions for increasing the efficiency of the health service, or for

diminishing the work to be performed and expenditure to be incurred; and • Training officers, and providing facilities for them to improve themselves, in matters connected

with their official duties by attendance at training classes organised by the health service in which they are employed, etc.

Where under the purchasing policy any duty, obligation or power is imposed or conferred upon the Chief Executive, such duty, obligation, or power may be performed or exercised by a responsible officer delegated by the Chief Executive. 1.2.1 Drug Purchasing Those responsible for purchasing drugs must ensure that drugs listed in the “NSW State Contracts for Pharmaceuticals” are purchased from the approved supplier. It is essential to the continued success of the contract system that all hospitals order from the approved contractor. Any enquiries or complaints in regard to drugs purchased under the contract system are to be directed to the Supply Officer, Pharmaceuticals Contract, State Procurement on (02) 9372-7641. All purchase orders arising from the Pharmacy Department are to be signed by the Chief Pharmacist or his/her delegate.

CHAPTER 1 – PURCHASING PROCEDURES 1.6 Orders for drugs of addiction specified under the Poisons and Therapeutic Goods Act 1966, and its regulations shall be authorised only by a person authorised in terms of that Act. In the case of a health organisation this would be a pharmacist. Orders for drugs of addiction are to be countersigned by the Director of Pharmacy or his or her nominee who is a pharmacist. In a small organisation where no pharmacist is employed, orders for drugs of addiction are to be countersigned by either the Director of Nursing or the Director of Medical Services, whoever is determined to have the responsibility by the hospital’s CE. Each hospital is expected to take every possible step to keep drug expenditure to a minimum. To this end, hospital authorities should seek the active and continued involvement of the hospital’s Drug Committee, the Chief Pharmacist, Nursing Staff, Visiting and Staff Medical Officers, and all other personnel associated with the purchase, storage, control, handling and administration of drugs throughout the hospital. For information on the handling and control of drugs including the role of the Drug Committee, refer to PD2007_077, “Guidelines for the Handling of Medication in New South Wales Public Hospitals” (Refer to Patient Matters Manual page 20.1). 1.1 GENERAL RESPONSIBILITIES The Chief Executive shall be responsible to the Department for the discipline, efficiency, and economic administration of the health service and the officer in charge of each area shall be responsible through the usual channels to the Chief Executive for the proper management of the area. All officers will be held responsible for the safe custody of all goods and property under their care and control and for keeping any such goods in good order and condition. Officers in charge of buildings shall give timely notice in writing through the usual channels to the Chief Executive of any repairs which may be required. Any officer who reasonably considers that health service property has been improperly dealt with shall advise the Chief Executive in writing through the usual channels and the Chief Executive shall forward copies of the advice together with any appropriate recommendation and report to the Auditor-General. It shall be the duty of the Chief Executive, or representative, to report to the Contracts Control Board any case in which a contractor has not fulfilled any condition of a State Procurement contract. However, in the case of contracts arranged locally, details shall be advised to the Chief Executive through the usual channels. 1.3.1 Best Practice Procurement processes should be structured to minimise costs for all parties, consistent with the standards of behaviour required by the NSW Government Code of Practice for Procurement. Commitment to continuous improvement and best practice performance is expected of all those involved in government procurement. Areas where this commitment may be demonstrated include, but are not limited to:

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• Client focus, service quality and value for money outcomes; • Ethical business practices; • Management of procurement risk; • Tendering and contract management; • Co-operative relationships; • Non-adversarial dispute resolution; • Planning and management of human, physical and financial resources; • Environmental management; • Occupational health and safety management, and workplace injury management; • Workplace practices; • Training management; • Aboriginal participation; • Supply chain management; • Payment practices, including reflective practices down the contract chain; and • Innovation in design, service provision, processes and use of technology. Details of specific practice requirements are provided at Appendix 1–A. Officers must, on request, furnish to the Contracts Control Board such information as it requires to perform its functions. 1.3.2 General Orders Goods and services for a health organisation shall be: (1) ordered on its official order form; (2) authorised by the Chief Executive (3) correctly recorded in the Commitments Register In computer generated order systems or where hard copy orders are not generated, e. g. EDI, controls are to be in place to safeguard the integrity of all orders raised and to ensure that all orders are properly authorised. In respect of periodic service payments, e. g. gas, electricity etc. where individual orders are not raised, a standing order or register of payments is to be maintained as a control against double payment. A Chief Executive shall ensure that all order forms are properly controlled and safeguarded, available only to persons authorised to have access to them and used only for the purchase of goods and services for the health organisation. Commitments registers are to be maintained in respect of all goods or services to ensure that costs incurred as a result of the placement of an official order are accounted for. Other than for items purchased through petty cash goods and services shall only be requisitioned on an official order and appropriate entries shall be made in the Commitments Register. No order shall be placed unless there is evidence that the appropriate certification has been made regarding the authority to incur expenditure and availability of funds (a completed requisition would satisfy this requirement). Orders are to be numbered sequentially (computer generated acceptable) and a record maintained of all order numbers.


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Hospitals purchasing instructions are to be followed when submitting orders ensuring that: • Full details are quoted on orders and copies of orders for items not to be placed into central store and

should indicate the section for which they are required, as a guide to distribution upon receipt. • Under no circumstances are order forms to be used to obtain goods or services for other than hospital

use. 1.3.3 Standing Orders For record purposes an order number may be allocated to services of a repetitive nature, e. g. visiting specialists, dentists, telephone charges etc., with only one order being issued for a twelve month period. Where goods are ordered once to cover a certain period, e.g. 12 months, a standing order may be placed. Examples of such orders are: a. Twelve months orders with set quantities and prices, with delivery of set quantities at set times. a. Twelve months orders, with set quantities and prices, with deliveries at call. b. Twelve months orders, with total dollar limit, items at a per unit price, with no specification as to

the number of each unit required overall or at a specific time. 1.3.4 New South Wales Government Expectations EXPECTATIONS What the New South Wales Government Expects

“The community is entitled to expect that:......the products reflect the best value obtainable, taking account of quality, reliability, timeliness, service, initial and ongoing costs and other relevant factors......”

The Government expects that: Value for money will be pursued through fair and effective competition. Other things being equal, the extent of competition sought by agencies will be consistent with the financial value of the procurement or disposal, with higher value cases being normally subject to open invitations to bid, or selective invitations following a process of publicly inviting pre-registration or expressions of interest. Policy in relation to preference for Australian and New Zealand products will be applied. If suitable goods or services are available from a NSW Government period contract, agencies will buy from it to achieve savings derived from aggregating the State’s purchasing power. Value for Money, Impartiality and Fairness Value for money, impartiality and fairness are familiar terms which are subject to multiple interpretations.


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Value for money is determined by considering all the factors which are relevant to a particular purpose, for example, quality, reliability, timeliness, service, initial and ongoing costs are all factors which can make a significant impact on benefits and costs. Value for money does not mean “lowest price”. However, the lowest price bid might offer the best value if it meets other essentials, such as quality, reliability and environmental impacts. It is important to be clear about how value for money will be determined in any particular set of circumstances prior to assessing bids. Impartiality means endeavouring to be objective and even-handed. For example, the impartial person will endeavour to objectively establish the criteria for determining best value for money and will endeavour to objectively assess each bid against the criteria. Being impartial includes taking account of practicalities. For example, the principle of impartiality does not require publicly advertising for bids in every case or inviting bids from firms which are poor performers. Fairness overlaps with impartiality in the sense of being even-handed. However, in some circumstances fairness can also require taking account of the effects of actions on others. For example, it is unfair to call tenders when there is no serious intent to award a contract subject to receipt of a satisfactory offer. Fairness does not mean pleasing everyone. It can be unfortunate, but not unfair, that people are adversely affected by decisions.

“The community is entitled to expect that:......public sector personnel and their agents in dealings with the private sector act skilfully and knowledgeably, impartially and fairly, honestly and lawfully.....”

The Government expects that: The skill, knowledge and responsibility of the people involved including any external advisers will be appropriate to the nature, complexity and magnitude of the procurement or disposal. The processes of inviting and assessing bids or proposals will safeguard against favouritism, improper practices and opportunities for corruption. Private interests will not be allowed to influence decisions about procurement or disposal. The principle of competitive neutrality will be applied wherever an internal bid is lodged in competition with external bids. The principle of competitive neutrality is outlined in Contracting and Marketing Testing Policy and Competitive Tendering and Contracting Out Costing Guidelines both published by the NSW Premier’s Department and obtainable from the NSW Government Information Service. Commercially sensitive information from tenderers will be treated confidentially subject to the requirements of the law. (See Freedom of Information Act 1989, schedule 1, clause 7 concerning the protection given to commercially valuable information). Key information about winning bids such as name and price accepted will often be released.


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Agencies will have proper regard to the costs to industry of developing bids. All actions taken and requirements placed on others will comply with statutory requirements.

“The community is entitled to expect that:......private sector firms whilst pursuing their own goals act honestly and lawfully in their dealings with government agencies and seek to provide the community with good value......”

The Government expects that: Bidders will seek to achieve best practice standards in their industry and will demonstrate that in fulfilment of contracts. Bidders and contractors will act ethically. They will disclose any conflict of interest and will not seek to undermine fairness and impartiality on the part of government agencies. Bids will only be submitted where there is a firm intention to proceed on the part of the bidder. Parties will not engage in practices such as collusion in tendering, inflation of prices to compensate unsuccessful tenderers, hidden commissions or other such secret arrangements. Bidders and contractors will comply with State and Commonwealth legislation including the trade practices and consumer affairs laws.

“The community is entitled to expect that:......there are fair opportunities available to persons and firms to bid or pre-qualify to bid for public sector business......”

The Government expects that: Fair opportunity will be seen by agencies to go hand in hand with obtaining best value for money. Opportunities to bid or to pre-qualify to bid will not be unduly restricted. Needs will be defined in ways which do not unduly limit the range of bidders.

“The community is entitled to expect that:......mechanisms of audit and accountability enable reporting of the extent that processes and outcomes match these expectations.....”

The Government expects that: Public sector executives and other persons involved in procurements and disposals will be aware of their responsibilities and will be able to account for their actions and decisions. In particular, records of procurement and disposal decisions including the reasons for recommending and deciding on the selection and rejection of offers will be kept in a manner which facilitates audit and other normal processes of accountability. REALISING THE EXPECTATIONS Full realisation of the expectations requires commitment and integrity on the part of officers of NSW Government agencies and on the part of private sector participants.


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Chief Executives of NSW Government agencies must commit their organisations to objectives, values and practices which are consistent with the expectations. Private Sector Firms and Others Seeking to do Business with the NSW Government Private sector firms and other bidders for NSW Government business should commit themselves to meeting the expectations placed on them. In order to minimise the complexities and costs of assessing bids, bidders should: • respect the conditions of bidding set out in documents supplied by the Department including, when

stated, the format bids are to be prepared; • present information in their bids in the most succinct fashion appropriate to the Department’s

requirements; • respond promptly to all reasonable requests for additional information and meetings. See Appendix 1-B. 1.4 PROCUREMENT STRATEGY

If a decision has been made to use procurement to meet some or all of the identified service need, the project is to be defined sufficiently so that funding approval can be obtained.

Specific guides exist for particular types of goods and services procurement. These are: • Simple Procurement Guidelines – information on how to conduct the procurement process for low

risk/value goods and services; (Chapter 2) • Disposal Guidelines – information on how to conduct the disposal process for surplus or

unserviceable goods; (Chapter 10) • Motor Vehicle Policy – outlines requirements that must be addressed in the management of motor

vehicles; (Chapter 6) update pending • Guidelines for the Engagement and Use of Consultants – information about the Government’s

expectations about the use of consultants; (Chapter 4) • Guidelines for Government Advertising – outlines requirements for advertising activities including

approval requirements Appoint the project officer or team The skills and experience of the person or team needs to reflect the importance of what you are buying. If necessary, draw upon other specialist expertise from within your agency or from outside. When establishing the project, your project team needs to have appropriate authority and approval to act and make decisions.


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Engage stakeholders At each stage during the process, identify stakeholders, including appropriate approval authorities. This will assist you to recognise and take action on any obstacles at an early stage and to maintain stakeholder support. Managing stakeholder demands, including unrealistic expectations, from the beginning of a project will help to keep it on time and budget. Consider the potential environmental, economic development and social benefits and impacts Procurement should not occur in isolation of the Government’s broader environmental, social and economic development goals. The potential for benefits or adverse impacts needs to be identified at an early stage and managed throughout the procurement process. [Further information: Economic Development Guidelines, Occupational Health Safety and Rehabilitation Guidelines, Environmental Management Guidelines] Establish potential service providers Research of the marketplace needs to be done. This should include potential suppliers, relevant industry standards, an industry association that could provide useful information, existing SCCB/agency arrangements you could tap into and the experience of other agencies buying similar goods and services. Undertake a risk assessment Before deciding to proceed with the project, a risk assessment needs to be done. This should include the consequences of the project failing on service delivery, stakeholder considerations, financial implications, and the wider business and government context. Plans to monitor and manage the risks identified should be developed and updated during the project. [Further information: Risk Management Guideline]. Submission for Funding Approval The Government’s Strategic Management Framework provides a guide to the budgetary process. If project-specific funding is required through the State Budget, a detailed business case will be required. A business case typically includes the context for action, preferred and alternative options, a cost benefit analysis, funding, project resources and timeframe, stakeholder and change management plans, and how the success of the project will be judged and how this will be measured. [Further information: Business Case Guidelines, (Premier’s Circular 00-79). For purchases over $5 million agencies are required to prepare an Industry Impact Statement. [Further Information Economic Development Guidelines] If the estimated cost of the project is in excess of $10 million or the project is assessed as high risk using the Gateway Risk Profile Assessment Tool, a Gateway Business Case Review will need to be completed. Further references: The Independent Commission Against Corruption has published guides to assist NSW Government agencies in understanding and managing probity issues. Particular references are: • Pitfalls or Probity: Tendering and Purchasing Case Studies • Contracting for Services: The Probity Perspective • Direct Negotiations in Procurement and Disposals.


1.5 HEALTH SERVICE PROCUREMENT The procurement of goods and services by Health Services must be through the State Contracts Control Board (SCCB), where the SCCB has arranged a period contract. Where there is no SCCB period contract, purchasing can be undertaken within the delegations established by the Department.

* 1.6 GENERAL PURCHASING LIMITS 1.6.1 Goods and Services/Works up to $3,000 in value inclusive of GST Not in contract goods and services may be obtained to best advantage without quotations subject to the following conditions: (a) Rates being considered reasonable and consistent with normal market rates for items of a like

nature; and

(b) Requirements not being split into components nor succession of orders for the same goods or services for the purpose of enabling the goods/service to be obtained under the $3,000 limit.

1.6.2 Goods and Services/Works over $3,001 and up to $30,000 in value inclusive of GST

Not-in-contract goods and services up to $30,000 in value (inclusive of GST) being obtained by seeking at least one (1) written proposal, subject to the following conditions: (a) Rates being considered reasonable and consistent with normal market rates for items of a like

nature; and (b) Requirements not being split into components nor succession of orders for the same goods or

services for the purpose of enabling the goods/service to be obtained under the $30,000 limit. 1.6.3 Goods and Services/Works over $30,001 and up to $250,000 in value inclusive of GST A minimum of three (3) quotations must be obtained in writing, if they are available. (a) Rates being considered reasonable and consistent with normal market rates for items of a like

nature; and (b) Requirements not being split into components nor succession of orders for the same goods or

services for the purpose of enabling the goods/service to be obtained under the $250,000 limit.

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CHAPTER 1 – PURCHASING PROCEDURES 1.13.1

1.6.4 Goods and Services/Works over $250,001 in value inclusive of GST (including period contracts) Full tendering action required.

Required to submit full details and specifications to the Department of Commerce (NSW Procurement – Contracting Services) for the invitation of tenders. Area health services, Children’s Hospital, Westmead and Ambulance Service of NSW have been granted interim accreditation and may undertake procurement activities up to a value of $100 million without reference to the Department of Commerce. Affiliated health organisations can tender themselves. Total value includes purchase cost and whole of life costs.

1.6.5 PRINTING The delegations for printing have been aligned with the delegations for procuring goods and services. NSW Health has an Agreement with its preferred supplier to provide a print management service. Procurement of printing under this Agreement precludes the need for staff to obtain additional quotations as the service provider will undertake this task on behalf of the Health System. Additional information on the procurement of printing can be found at http://internal.health.nsw.gov.au/ecsd/ssc/purchasing.html and then clicking on the Printing link.

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http://internal.health.nsw.gov.au/ecsd/ssc/purchasing.html


SPECIAL NOTE:

The abovementioned delegations are subject to the following conditions;

a. Monetary figures are inclusive of GST. b. Where Health Services do not have the expertise to implement this Delegation they may refer

the request for purchase to State Procurement for appropriate action. c. Health Services are also to ensure that details of requirements of a repetitive nature are to be

referred to Department of Commerce (State Procurement) so that consideration can be given to the arrangement of a period contract if necessary.

d. Health Services located in rural areas are able to make local purchases of up to $1500 in value, irrespective of whether the items concerned are available in contract, provided that the local purchases are more advantageous.

e. Health Services may wish to impose their own limits, at a lesser value than the Department’s delegation, for internal management purposes.

f. Notwithstanding the above delegation, if Health Services consider the proposed purchasing action to be of such a nature as to warrant consideration of Department of Commerce (State Procurement)/State Contracts Control Board, the matter can be referred for consideration irrespective of monetary value.

g. Rates being considered reasonable and consistent with normal market rates for items of a like nature.

h. Requirements not being split into components or succession of orders. The monetary threshold includes the whole printing process of design, layout, printing, binding etc.

i. Notwithstanding the above delegation, if Departments/Agencies consider the proposed purchasing action to be of such a nature as to warrant consideration of State Procurement/SCCB, the matter can be referred for consideration irrespective of monetary value.

j. Monetary figures are inclusive of GST. 1.1 FLY BUY CARDS (PD2005_260) Public health system employees on occasion are required to procure goods on behalf of the organisation or patients/clients and then recoup the expense from the organisation or patient/client. In such situations employees are not ultimately put to any expense and are not to gain any personal benefit from the transactions. Benefits could include, but are not limited to, gaining points on the employees’ personal “Fly Buy” cards or other credit card loyalty schemes. 1.2 PRIVATE SECTOR PARTICIPATION IN PUBLIC HEALTH SERVICES (91/102) This Section outlines current Departmental policy on the procedure to be followed by all Health Services in dealing with proposals for private sector participation in the provision of health services paid for by the State. These procedures should be applied to all proposals involving privately funded infrastructure (eg hospitals, community health centres, diagnostic services), whether initiated by the private or the public sector. These procedures do not apply to purchasing of goods and services for use by the public sector, or to tendering or contracting for capital works funded by the public sector. The usual arrangements for purchasing, tendering and contracting continue to apply in these cases.

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1.8.1 Government Guidelines Guidelines for Private Sector Participation in Infrastructure Provision were issued in July 1990 by the NSW Department of State Development. The Guidelines have been taken into account in preparing this circular. Copies of the Guidelines are available from the Director, Private Sector Development Branch. The essence of the Guidelines is the calling of Expressions of Interest (EOI), to ensure that all private sector organisations capable of undertaking the project have an opportunity to do so, while maintaining sufficient flexibility to allow a range of creative solutions to be submitted. Before calling expressions of interest for public health infrastructure or services, it is essential that the following analysis has been carried out: • Strategic analysis - to demonstrate where the proposed activity fits within the corporate plan for

the Area and whether the activity is viewed as a core activity or peripheral service. The strategic analysis would review long term site utilisation if a proposal envisages sale or lease of publicly owned land or buildings.

• Commercial/economic evaluation - to identify and evaluate the costs and benefits of alternatives

available for the provision of a service. • Preliminary feasibility analysis - to provide some assurance that the proposal is realistic and

achievable. • Assessment of impact on the public sector - to indicate the financial and non-financial

consequences of implementing the proposal. • Assessment of industrial impact - to indicate possible union/association reactions to

implementing the proposal. If the foregoing analysis indicates that private sector development is feasible and likely to be cost-effective, a brief should be prepared in accordance with the Guidelines for Private Sector Participation in Infrastructure Provision for issue to respondents. The brief must include (inter alia): • criteria for assessment of proposals; • the proposed role (organisational, operations and financial) of the Department/Area/Hospital. The brief to be issued to respondents must be approved by the Director-General and the Minister before calling expressions of interest. For capital works estimated to cost more than $5 million, the approval of the Cabinet Capital Works Committee is also required. Proposals involving the sale, or lease for 3 years or more, of land or buildings must also be referred to the Department’s Asset & Contract Services Branch. The Department’s Human Resources Branch must be involved in discussions on industrial issues prior to submitting a proposal.


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When the EOI brief has been approved, expressions of interest should be invited by public advertisement. 1.8.2 General Principles Relationships with the private sector should incorporate the following principles: • separation of public and private facilities, activities and staffing; • avoidance of joint ventures and creation of public subsidiaries; • establishment of arms-length, formal commercial contracts for all trading relationships; avoidance

of contingent liabilities or indemnities having particular regard to the requirements of Loan Council;

• contracting and other arrangements to be cost-effective, taking account of potential revenue losses

and both capital and recurrent costs. The Department’s Central Administration can assist Areas in each step of the process. The point of contact will usually be the Director, Private Sector Development or, for proposals associated with currently approved works, the Director, Capital Works. These officers can advise on feasibility studies and the approval process, and will be responsible for co-ordinating input from other Branches. 1.9 CO-ORDINATION OF NSW GOVERNMENT TELECOMMUNICATIONS

(Prem. Memo 91-22) DIRECTIVE FOR THE ADMINISTRATION OF NSW GOVERNMENT TELECOMMUNICATIONS ASSETS, FACILITIES AND ANCILLARY MATTERS BY THE COMMERCIAL SERVICES GROUP’S TELECOMMUNICATIONS UNIT The following directives apply to all NSW Government departments, authorities and agencies. 1. The Telecommunications Unit shall have responsibility for the co-ordination of all negotiations with

Telecom/OTC, other licensed carriers, licensed resellers and second carrier proponents regarding lease, sale, commercialisation or options for use of telecommunications assets owned, operated, maintained or otherwise controlled by NSW Government agencies, authorities or departments. Such assets include, but are not restricted to the following:

- optical fibre, co-axial or other cable, microwave and radio systems; - r ights-of-way; - structures, towers, rooftops and ducting; - sites (both permanent and moveable) suitable for pay telephones, radio aerials and other

telecommunications devices; - access to Government retail outlets and other commercial arrangements.

Government agencies, authorities and departments intending to commercialise telecommunications assets should refer all proposals to the Telecommunications Unit.


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2. The provisions of Memorandum 90-66 are confirmed and still applicable to all agencies. These include:

- no Government bodies are to enter into network or service contracts with Telecom or OTC

with terms in excess of one year without approval of the Telecommunications Unit;

- any proposed expenditure above $1 million be referred to the Telecommunications Unit so as to ensure that such investments are consistent with the Government’s network design and future evolution.

3. To ensure that the telecommunications interface of any PABX (in excess of 50 lines) purchased

prior to the establishment of the Government’s private telephone network is consistent with the implementation of the Government’s network, each proposed purchase shall be referred to the Telecommunications Unit for approval.

4. The Telecommunications Unit has responsibility for coordination of the following aspects of

telecommunications within Government:

- liaison with the Commonwealth Department of Transport and Communications regarding radiospectrum licensing and other telecommunications regulatory matters;

- liaison with Austel regarding regulatory matters and technical standards; - liaison with telecommunications standards organisations including Standards Australia.

Government agencies, authorities and departments wishing to make representations, applications and other submissions to the above organisations should pass such submissions through the Telecommunications Unit.

1.10 SUPPLY OF GOODS FROM HOSPITALS TO OTHER ORGANISATIONS Periodically, particular organisations request to purchase goods or services from hospitals. For this reason, it would be preferable for these organisations to make direct use of the facilities of the State Procurement, if it is permitted to do so, rather than deal through a public hospital to gain similar concessions. The State Procurement has advised that the Government has recently decided to grant community oriented and charitable institutions access to the Department’s purchasing facilities, subject to meeting certain conditions. Broadly speaking, these organisations must be registered charitable or community benevolent organisations providing a community aid service related to the aged, disabled, child welfare, education, health or disadvantaged persons or other organisations which from time to time may be included in Government Welfare programs and access is approved by the Minister of Industrial Development and Decentralisation. Such organisations must be non-profit earning and be in receipt of State Government financial assistance, although provision exists for the Minister of Industrial Development and Decentralisation to approve access to organisations which do not meet the full criteria.


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Because of the complexities of Government Accounting and also questions which could arise as to the legal situation of the hospital if it supplies goods obtained under certain privilege to voluntary agencies which may not be entitled to the same privilege, the Department is naturally not anxious to encourage any system of sale or transfer of goods from hospitals. Accordingly, the procedure to be followed in the first instance is to ascertain from the State Procurement and the Minister for Industrial Development and Decentralisation whether the Voluntary Agencies involved are entitled to deal directly with State Procurement. If the Agencies involved are so entitled, then it will not be necessary to approach hospitals for the supply of goods. It is suggested that hospitals should advise these organisations to apply to the State Procurement and the Minister for Industrial Development and Decentralisation seeking access to the Department’s purchasing facilities, outlining the conditions mentioned above, under which access is granted. 1.11 CONTRACT OF SERVICES BY PUBLIC HEALTH ORGANISATIONS CONTRACTS/AGREEMENTS FOR AREA HEALTH SERVICES AND STATUTORY HEALTH CORPORATIONS TO PROVIDE SERVICES Delegation means the approval of an Area Health Service or statutory health corporation entering into contracts or agreements with any person for the provision of any service by the area health service or statutory health corporation to that person. PROCEDURES: Under no circumstances are delegates to approve contracts for the provision of direct care public health services. The Minister for Health’s approval is required for all such contracts. Chief Executives of area health services and statutory health corporations are delegated authority to approve contracts for non-direct care public health services with other organisations for the provision of services from excess capacity of normal operations to a value of $50,000 per annum for any single contract by the area health service or statutory health corporation subject to: • the provision of services is from excess capacity arising from the normal operations of the

organisation; • contingency plans for alternate supply arrangements in case of failure or breakdowns are in place

before entering into any contracts; • combinations of private sector and non public sector health contracts does not exceed 10% of total

capacity; • the organisation is able to provide advice on new/recurrent contracts with non public health

organisations to the Finance and Commercial Service Division at the end of each quarter; • contracts are for three (3) years or less. Longer contracts will need Departmental approval; • all potential contracts over $50,000 per annum are to be submitted to the Department of Health for

approval.


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1.12 LEASING OF EQUIPMENT (PD2005_146) 1.12.1 Background For some time consideration has been given to the need for a leasing facility to be provided for both major and minor equipment. Provided there is a market for secondhand equipment which allows leasing companies to eventually dispose of the leased equipment and thus provide competitive lease rates, a lease arrangement could be beneficial. It could provide: • Access to equipment not affordable on a capital purchase basis. • The opportunity to convert to new technology as it occurs during the term of the lease. The policy advised in this circular has been developed following consultation with and consideration of comments provided by Area Health Services. 1.12.2 Considerations Basic considerations in leasing equipment are: 1. Any arrangement must be an operating lease, not a finance lease. State Government policy does

not condone finance leasing, and finance leases can only be approved on a specific case basis by the Treasurer. (Definitions of a finance lease and an operating lease are attached, as well as criteria for classification.)

All approved lease proposals must contain a certification by the Chief Executive and Director of Finance that the proposal is an operating lease in accordance with Accounting Standard AAS 17.

2. Those involved in considering financing proposals through leasing are to ensure compliance with the provisions of relevant legislation and policy, and that adequate documentation of financing proposals, evaluation of alternatives and decision-making are retained for accountability purposes.

3. The Director of Finance is to certify that on a current and forward years basis funds exist to cover

the lease payments, and is to provide details of the source of these funds and indicate that any impact on the Net Cost of Services result or other financial management requirements of the Health Service can be appropriately managed.

1.12.3 Provision of Lease Facilities: There are various methods of providing the leasing facility, the main ones being: 1. A central lease facility arranged by tender and available either on a structured take up arrangement

or on ad hoc take up.


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2. Supplier financed lease. 3. Third party finance arranged by the supplier. 4. Third party finance arranged by tender for specific project. A central lease facility would be suitable for program purchasing, where it is reasonably certain that a particular number will be required within a particular period. The cost of finance would increase considerably if there is uncertainty as to the type and mix of equipment and the possible take up value. This method needs further examination, but looks suitable mostly for structured statewide procurement. Supplier financed and third party (arranged by supplier) leases are convenient, as they can be arranged in the same tender as the equipment. However, generally the most economic source of funds would run in the order: • Tendered • Third party arranged by supplier • Supplier. The method of procurement, ie quotations, tenders, should be in line with the requirements for procurement at various expenditure levels indicated in the Purchasing and Supply Manual. 1.12.4 Probity Issues: • Basic equity of access to the total process is the main consideration. The major decision is, however,

how to approach the call for tenders and resultant evaluation. • In general, the best results are achieved by tendering the lease facility separate to the equipment

acquisition. This is desirable both for commercial and probity reasons. • A further option is to call tenders for the supply of equipment under a lease option. • This does, of course, restrict tenders somewhat, as suppliers can only tender if they can offer a lease

option, either self funded or third party funded. • At the present time some tenderers are submitting lease options of various types as an alternative

tender to an acquisition option. However, based on value for money it would not be possible for a lease proposition to be assessed superior to a straight out purchase, unless there is a consumables commitment attached which subsidises the lease cost.

• Therefore prior to calling tenders a decision needs to be made as to whether the items are to be

subject to straight out purchase or a lease arrangement, and tenders then called accordingly. • If for any reason the one tender calls for either a purchase or a lease option, tender documentation and

evaluation methodology should clearly indicate the position.


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1.12.5 Approval Levels: 1. Prior to any new lease commitment being entered into which either:

a. Involves a capital equipment cost in excess of $500,000, or b. Involves a payment in any one year in excess of $100,000, a business case must be forwarded

to the Finance Branch of the Department for consideration. Where the equipment being procured has a functional relationship to another Branch of the Department, it should be submitted via that Branch.

For the purposes of these restrictions an acquisition should not be split into its components nor divorced from the overall project to avoid the approval requirements.

2. Where a Health Service wishes to have a delegation in excess of the above levels, application can

be made to the Department seeking increased levels. Such application will be considered on a case by case basis and must demonstrate:

• ability to operate within Net Cost of Services allocations (SP&T and Special Projects

excluded) • ability to operate within the limit of Government Cash Payments • ability to repay any loans to the Department • ability to manage cash at bank.

Applications are to be forwarded to the General Manager, Finance and Commercial Services. 3. It should be noted that Treasury Circular 98/7 requires that all proposals for operating leases with a

contract threshold amount of $1 million or more be submitted to Treasury for assessment, prior to any in-principle decision being made on whether to proceed or any tender document being issued. The threshold relates to the capital equipment cost or the extent of the take up under one facility.

1.12.6 NSW Government IT Master Leasing Facility The Department of Commerce has established an IT Master Leasing & Asset Management Facility for use by NSW Government organisations. All new operating leases that are IT in nature should be funded under the Master Leasing Facility. Any claims for exemption from this requirement must be submitted through the Department to Treasury. Use of the Facility does not absolve an agency from observing all current requirements relating to investment in IT equipment. In particular, it is expected that all agencies follow procedures consistent with the applicable guidelines issued by the Office of Information Technology. Projects being funded through the Facility should, therefore be consistent with agencies’ IT strategic plans and be included in overall capital strategic plans. Agencies should undertake a full evaluation using Treasury’s Financial Appraisal Guidelines prior to deciding to use the Facility. This evaluation should compare the viability of purchasing the asset against the lease option.


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The Facility also contains a sale and leaseback option. Where an agency wishes to sell an asset to a financing provider and then lease back this same asset the following requirements will apply: • Approval to follow this approach must be sought from the Treasury through the Department; • The agency must be able to demonstrate the cost effectiveness of a sale and leaseback by

undertaking a detailed financial analysis; • If the agency wishes to retain the proceeds from the sale it will need to demonstrate that it can fund

future lease payments from within existing forward estimates; • The agency will need to reach agreement with the Treasury on how the proceeds from the sale are

to be utilised. General When calling for tenders other than a basic leasing facility the information requested from suppliers should be sufficient to clearly establish: • The basic cost of the equipment items supplied. • The additional cost due to the leasing arrangement. • The provider of the lease finance (supplier or third party). • The validity of the arrangement as an operating lease. • The cost of any associated consumables. • The cost of, and any requirement to commitment to, maintenance. It should be ensured that contracts arranged do not place an obligation for ongoing commitment past the initial contract period. 1.12.7 Classification of A Lease A lease is a finance lease if it effectively transfers substantially all the risks and benefits incident to ownership. The following chart gives examples of situations in which a lease could normally be classified as a finance lease by a lessee and lessor. The examples do not necessarily reflect all possible situations in which a lease may be classified as a finance lease, nor should a lease necessarily be classified as a finance lease by virtue of the route followed on these charts. The substance of the transaction determines the classification.

No Is the lease non-cancellable?

Yes

Is ownership transferred by the end of lease term? Yes

No

Does the lease contain a bargain purchase option Yes

No

Is the lease term for 75% or more of the useful life of the leased property?

Yes


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No Is the present value of minimum lease payments equal

to or greater than 90% of the fair value of the leased property?

Yes

No

Operating Lease Finance Lease

Leasing (Information Based On Accounting Standard AAS 17) Definitions of Types of Lease: 1. “Finance lease” means a lease which effectively transfers from the lessor to the lessee substantially

all the risks and benefits incident to ownership of the leased property. 2. “Operating lease” means a lease under which the lessor effectively retains substantially all the

risks and benefits incident to ownership of the leased property. 3. “Non-cancellable lease” means a lease which

(i) can be cancelled only with the permission of the lessor or upon the occurrence of some remote contingency; or,

(ii) the lessee, upon cancellation, would be committed to enter into a further lease for the same or

equivalent property with the same lessor or a third party related to the lessor; or, (iii) provides that the lessee, upon cancellation, would incur a penalty of a magnitude that, in

normal circumstances, could be expected to discourage cancellation. 1.12.8 Guidelines for Lease Classification: The following criteria are presented as guidelines to assist in classifying leases. 1. The effective passing, from lessor to lessee, of substantially all of the risks and benefits incident to

ownership could normally be assumed where the following criteria are satisfied:

a. The lease is non cancellable; and,

b. Either of the following tests is met:

(i) the lease term is for 75 per cent or more of the useful life of the lease property; however, if the beginning of the lease term falls within the last 25 per cent of the total useful life of the leased property, including earlier years of use, this criterion would not be appropriate for purposes of classifying the lease; or,


(ii) the present value, at the beginning of the lease term, of the minimum lease payments equals or exceeds 90 per cent of the fair value of the leased property to the lessor at the inception of the lease. (The discount rate to be used in calculating the present value, is the interest rate implicit in the lease.)

1. In order to discount the minimum lease payments to their present value as at the

beginning of the lease term, the lessee will need to know or be able to ascertain the interest rate implicit in the lease. Where the lessee knows the fair value of the leased property at the inception of the lease and is able to make a reasonable estimate of their dual value, the implicit interest rate can be readily computed. However, in certain circumstances the lessee may not know the fair value of the leased property or be able to estimate reasonably the residual value. In these circumstances the lessee will need to estimate the interest rate implicit in the lease.

1.12.9 Standardised Clinical Equipment Evaluation and Indemnity Agreement for Loan and

Trial (of Clinical Equipment) Forms (Information Bulletin 2004/29)

NSW Health Procurement (HP) has developed a set of standard forms for use by Health Services in the evaluation of Clinical Equipment. The forms were developed collaboratively with Health Service Clinical Product Managers and Biomedical Engineers and have been extensively trialled across the state.

Use of the four forms (listed below) will help minimise risks to Health Services in acquiring (loan) clinical equipment for evaluation. Their use in conjunction with the HP’s Clinical Equipment Evaluation Database will also help minimise the incidence of multiple evaluations of the same equipment across Health Services. Health Services are advised in the interest of minimising unnecessary duplication of effort to use the Forms in all clinical equipment evaluation initiatives. Standardised Clinical Equipment Evaluation & Indemnity Agreement Forms: A. Clinical Equipment Presentation & Indemnity Form B. Clinical Equipment Specialist Review Form C. Clinical Equipment Evaluation Results D. Committee Recommendation Forms

The forms are available on the HP’s intranet site.

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1.12.10 Procurement of Photocopier Equipment (PD2006_032) New South Wales Treasury has advised that State Contract 390 allowing operating leases finished on 31 December 2005, and the Imaging Devices contract that replaces it, Imaging Devices Contract 2390, has no provision for leasing. In accordance with Treasury advice, Health Services are not to enter into leases for photocopier equipment, or other equipment covered by the new Imaging Devices Contract 2390, and are to purchase these assets from 1 January 2006. Purchases are to be sourced from savings against the recurrent allocation and are to be reported as RMR > $10,000 unless individual assets are valued in excess of $250,000 in which case contact with your nominated Asset & Contract Services liaison officer will be necessary to establish a specific locally sourced projects for CAPDOHRS reporting requirements. The issue of this policy directive does not affect orders placed with lessors before 1 January 2006 which were subsequently settled after 31 December 2005.

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NSW HEALTH PROCUREMENT

CLINICAL EQUIPMENT GENERIC FORMS

• PART A - CLINICAL EQUIPMENT PRESENTATION & INDEMNITY FORM

For completion by Suppliers

• PART B - CLINICAL EQUIPMENT SPECIALIST REVIEW FORM For completion by Biomedical Engineering / Infection Control / OH&S Specialists

• PART C - CLINICAL EQUIPMENT EVALUATION RESULTS

For Completion by Trial Coordinators

• PART D - COMMITTEE RECOMMENDATIONS FORM For Completion by Clinical Product Procurement Committee

RELEASE 1.1 – 25 May 2004

HP Clinical Equipment Procurement Working Party

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PART A - CLINICAL EQUIPMENT PRESENTATION & INDEMNITY FORM To be completed by Suppliers - [Page 1 of 4]

Note: Referencing suitable code & guidelines is acceptable when answering some parts of this form. Supporting documents

may be attached to answer questions where space provided is insufficient. PRODUCT INFORMATION Description of Equipment [Attach relevant brochures] Description of Clinical Application Brand Name Manufacturer

Model Number

Model Name

EAN/HIBC Compliant Yes No NSW State Contract Yes No

Contract Number Department of Commerce Electro Medical Contract Yes No

Contract Item Number

Describe any re-processing requirements SUPPLIER INFORMATION

Name of Supplier Address

Phone Facsimile E-Mail

Web Address

Representative Phone Mobile

E-Mail REGULATORY COMPLIANCE TGA number

Applicable standards

Details of regulatory conformance [attached certificates]


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PART A - CLINICAL EQUIPMENT PRESENTATION & INDEMNITY FORM To be completed by Suppliers- [Page 2 of 4]

EVALUATION REQUESTED BY

Name

Organisation

Phone Facsimile PRICE INFORMATION Indicative value of equipment $ Discount available Yes No Are other methods for purchasing available, e.g. leasing, cost per test Yes No List accessories available Indicative cost of accessories 1. 1. $ 2. 2. $ 3. 3. $ 4. 4. $ 5. 5. $ Are accessories available from other sources? Yes No Discount available for consumables Yes No List consumables available Indicative cost of consumables 1. 1. $ 2. 2. $ 3. 3. $ 4. 4. $ 5. 5. $ Are dedicated consumables necessary? Yes No Delivery cost if not FIS $ Lead time Days Indicative installation cost $ Installation issues

Method of disposal for: Equipment Packaging Consumables Replaceable components Additional Information supporting environmental friendliness of product


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PART A - CLINICAL EQUIPMENT PRESENTATION & INDEMNITY FORM To be completed by Suppliers- [Page 3 of 4]

OCCUPATIONAL HEALTH & SAFETY INFORMATION

Contain hazardous substances Yes No Manual handling issues Yes No Contain sharps Yes No Contain latex Yes No

Does the device contain or emit radioactivity? Yes No

Provide details if answered Yes to any of the above

GENERAL EVALUATION INFORMATION Reference site(s):

Contact person(s) at reference site:

Equipment Status: New to market Yes No Upgradeable Yes No

Upgrade Supplier’s Policy & Detail(s):

HAZARD ALERTS

Have there been any alert in Australia or international regarding this equipment? Yes No

Action taken to address the alert:

TRAINING AND SUPPORT INFORMATION User training & education available Yes No Cost [if any] $ Description of user training & education Technical support training available Yes No Cost [if any] $ Description of available technical support training

Comprehensive workshop manufacture service manual Yes No Cost [if any] $


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PART A - CLINICAL EQUIPMENT PRESENTATION & INDEMNITY FORM To be completed by Suppliers - [Page 4 of 4]

After sales “user” support available Yes No Cost [if any] $

After sales “technical” support available Yes No

After sales technical support provided by: Supplier Third Party

Identify third party provider

Technical / Maintenance service support agreement available Yes No Description of Technical / Maintenance service support agreement

List accessories supplied Serial number Indicative cost Quantity

1. $ 2. $ 3. $ 4. $ 5. $ 6. $

Supplementary specifications - where the Public Health Organisation provided specifications for

equipment and / or terms for purchase, has these been adhered to and a copy attached? Yes No

Alternative sources of accessories provided Yes No

Proof of acceptance testing per AS3551 provided Yes No

Service manual provided Yes No

Operator’s manual provided Yes No

Occupational Health & Safety declaration provided Yes No

Signed “Indemnity Agreement for Equipment on Loan or Trial” provided Yes No

[Refer to Indemnity Agreement form as provided by the Public Health Organisation] Signed on behalf of the Supplier

Name of Supplier Representative

Signature ______ ______________________________ Date _____/____/____


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PART B - CLINICAL EQUIPMENT SPECIALIST REVIEW FORM To be completed by Biomedical Engineering / Infection Control / OH&S Specialists – [Page 1 of 3]

Reason for Evaluation: Upgrade Substitution Review

Area Tender CAG New to Market

BIOMEDICAL REVIEW

Is the purchase of this equipment in line with the Organisation’s equipment standardisation / harmonisation strategies?

Yes No

Provide details / explanation if you answer “No” to the above

Are accessories necessary? Yes No

Are there alternate sources of accessories? Yes No

Are dedicated consumables necessary? Yes No

Comments on accessories / consumables:

Has evidence been provided to confirm compliance to the following?

Regulatory Compliance Yes No

Quality Certification [ISO 9000]? Yes No

Legible manufacturer / brand name on equipment? Yes No

Date of manufacture stamp on equipment? Yes No

Country of manufacture stamp on equipment? Yes No

Estimated routine maintenance cost $ Per annum

Installation issues:


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BIOMEDICAL REVIEW CONTINUED Acceptance testing as per AS3551 [Refer Part A – Form 4 of 4] Is there an “Acceptance Test” done by supplier? Yes No

o Is the supplier provided “Acceptance Test” acceptable? Yes No o Is the documentation acceptable? Yes No o Is the date of testing acceptable? Yes No

If answered NO to any of the above, Biomedical testing is required.

Has acceptance testing been carried out Yes No Document attached Yes No

Comments & recommendations Maintenance issues e.g. can preventative maintenance be carried out in-house? Special tool(s) required? Known problems or hazards with this equipment Comment on expected clinical effectiveness

DOCUMENTATION EVALUATION REVIEW [Refer Part A – Form 4 of 4]

Availability of service manual Paper CD Internet site

Technical manual Acceptable Not acceptable Full service information Acceptable Not acceptable Description of circuits Acceptable Not acceptable Description of spare parts Acceptable Not acceptable Operators manual Acceptable Not acceptable All necessary clinical information required to evaluate Acceptable Not acceptable

Comments & recommendations Market assessment – should other suppliers be assessed Yes No

Evaluating Officer – Biomedical Engineering

Name Position Signature ___ _________________________________ Date_____/____/____


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INFECTION CONTROL REVIEW

Does the item require disinfections or sterilisation? Yes No Does the equipment meet infection control standards? Yes No Are policies & procedures changes required? Yes No Is the equipment easy to clean? Yes No Are manufacturers instructions for cleaning / sterilisation available? Yes No Are cleaning / sterilising instructions provided appropriate? Yes No

Comments & recommendations

Evaluating Officer – Infection Control

Name Position Signature ______________________________________ Date_____/____/____ OCCUPATIONAL HEALTH & SAFETY REVIEW [Refer Part A – Form 4 of 4]

Contain Hazardous substances Yes No

Manual Handling issues Yes No

Comments & recommendations

Evaluating Officer – Occupational Health & Safety

Name Position Signature ____________________________________ Date _____/____/____


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PART C - CLINICAL EQUIPMENT EVALUATION RESULTS To be completed by “Trial Coordinator” – [Page 1 of 1]

EQUIPMENT USER EVALUATION CHECKLIST

Does the equipment do what it is expected to? Yes No

Are accessories, e.g. connectors easy to use Yes No

Is the equipment easy to use in general? Yes No

Are safety features appropriate? Yes No

Are there any OH&S issues? Yes No

Are there any storage issues? Yes No

Are there any cleaning issues? Yes No

Is operator’s manual provided acceptable? Yes No

Functionality Acceptable Not acceptable

Ease of use Acceptable Not acceptable

Rate [tick] the overall acceptability of the equipment [10 being the best]

1 2 3 4 5 6 7 8 9 10

General comments

Trial Coordinator – Sign- Off

Name Position

Signature________________________________________ Date _____/____/____


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PART D - COMMITTEE RECOMMENDATIONS FORM To be completed by “Clinical Product Procurement Committee” – [Page 1 of 1]

COMMITTEE RECOMMENDATION

Clinical Product Procurement Committee Chairperson

Name Position Signature________________________________________ Date _____/____/____

CHAPTER 1 – PURCHASING PROCEDURES 1.34.1 1.13 CONTRACTORS – CONDITION WHEN ENGAGING When engaging contractors, no matter the value ($), the undermentioned conditions are to be applied: a) Contractors are to be engaged through State Contracts Control Board contracts where the

labour category is covered by those contracts. If SCCB contract, the contract and requisition should specify the contract number, staffing category – this allows verification and agreement on charge rate. In establishing payments to be made regard is to be had to the rates and expertise requirements specified under the contracts and not to the position title or grade within the Department. If not under contract three quotes are required for procurements over $30,000 (including GST).

b) Contractors are not employees of the public health organisation and therefore are not entitled to

the same access to public health organisation facilities and resources. Contractors are not, as a matter of course, to be given access to official resources such as phones, computers (internet access), motor vehicles. Only in circumstances, where it is required as part of the contracted service, is the contractor to be given access to official resources. Under no circumstances are contractors permitted to use official resources for private purposes. If use is approved for official purposes then such usage is to be reviewed to ensure that no inappropriate use occurs;

c) Specifications/arrangements must clearly indicate the infrastructure arrangements viz, state

whether contractors are to be located at the public health organisation and provided with facilities (taking into account the capacity of the public health organization to provide facilities and their costs) or whether the service is to be provided at the contractors premises. This should be checked and be reflected in prices quoted so that all prospective suppliers are treated equally. Arrangements with contractors should specify maximum number of hours to be worked per week, required lunch breaks and if contractors are engaged under quote action then fresh quotes are required after the finite period quoted for has expired;

d) Contractors cannot exercise financial or staff delegations of a position against which they are

held. Financial and staff delegations can only be exercised by officers of the organisation who are appropriately delegated. It is to be noted that under the provisions of the Crown Employees Public Service Conditions of Employment Award a “supervisor” cannot be a contractor/consultant for the purposes of that Award.

e) Contractors, as a matter of course, are not to be allowed to attend external training courses/

conferences for skill development. Only in exceptional circumstances would they attend external training/conferences (e.g the conference provides knowledge about health they could not get elsewhere and is essential for their role). Internal training courses such as Trim are acceptable. Contractors should be selected in the first place that have the previous skills to undertake the role they have been contracted for;

f) Contractors or groups of contractors are not to be placed under the ultimate supervision of

another contractor. Contractor physical access to buildings and grounds is to be limited to those times when they can be supervised;

g) Contractors are not eligible to be paid higher duties allowances. If it is required that additional

services are required a revised contract is to be arranged. If it is not a SCCB contract and the proposed amount of remuneration exceeds $30,000 (including GST) three quotes are required.

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CHAPTER 1 – PURCHASING PROCEDURES 1.34.2 h) Depending on the type of services to be provided consideration should be given to having

contractors sign confidentiality agreements. Branches are responsible for the orientation of contractors and making them aware of the organizations Code of Conduct, security arrangements and other public health organization policies;

i) record check is required to be undertaken on the contractor or the contractor’s employee; j) Branches are to check whether the contractor is a company or sole trader to determine the

public health organisations tax and superannuating responsibility. If they are not then the public health organisation could possibly have to take tax and more importantly have to pay the 9% superannuation liability which could affect quote thresholds as well as possibly make a quote not the lowest once the 9% is added;

k) Contractors, where a contract is over $30,000, are required to sign contracts prior to

commencement of services. A Standard Contract is contained as an appendix to Chapter 3 and can also be found on the DoH Legal branch web site http://internal.health.nsw.gov.au/legal/goods.html. Contracts are also required to be completed where persons are engaged from the State Contracts Control Board personnel contracts for periods in excess of 2 weeks. Where a contractor is liable to have access to sensitive/confidential documents or in formation Branches are to have the contractor sign a “Confidentiality and Privacy Deed”, a copy of which can be found at page 4.70.

1.14 RADIATION ONCOLOGY EQUIPMENT – HEALTH PROGRAM GRANTS

(PD2010_025) PURPOSE The purpose of this policy is to advise Area Health Services of the process for expenditure of Radiation Oncology Health Program Grant funds (including Networking Information System funds) for proposed purchase of eligible radiation oncology equipment, and to provide advice on the information that is to be provided. MANDATORY REQUIREMENTS Area Health Services must seek approval from the NSW Department of Health to expend Health Program Grant (HPG) funds on eligible radiation oncology equipment, including Networking Information System funds. HPG grant payments received from the Australian Government must be:

• Used solely for equipment at the location for which the grant was paid.

• Separately identified within the General Fund and used only for expenditure of a capital nature related directly to the provision of radiation oncology services.

• Used for replacement equipment. Networking Information System (NIS) payments are made by the Australian Government towards the cost of networking the treatment and planning equipment at the Radiation Oncology Treatment Centre (ROTC). NIS funds can be used towards new or replacement items to enable networking of treatment and planning equipment.

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CHAPTER 1 – PURCHASING PROCEDURES 1.34.3 Area Health Services must write to the Director, Statewide Services Development Branch (SSDB) with relevant information about the Radiation Oncology equipment proposed for purchase, including information such as costs, HPG funds balance, and project timeframes. IMPLEMENTATION Area Health Services:

• Will write to Director SSDB, NSW Department of Health to seek permission to expend HPG funds for eligible Radiation Oncology equipment.

• Will provide relevant information to SSDB about the proposed expenditure.

• Must use HPG grant payments received from the Australian Government solely for equipment at the location for which the grant was paid.

• Must separately identify HPG grant payments within the General Fund.

• Must use HPG payments only for expenditure of a capital nature related directly to the provision of radiation oncology services.

• Must use Networking Information Systems payments for purchases to facilitate networking the treatment and planning equipment at ROTCs.

• Must confirm that the proposed purchase, if > $250,000, is on the Area’s Locally Funded Initiatives Program;

• Must confirm that the proposed purchase, if >$10,000 and <$250,000, is on the Area’s Repairs, Maintenance and Renewals Program.

• Must ensure that any proposed capital expenditure is compliant with relevant NSW Treasury requirements, for example, business cases for projects > $1 million.

The Director SSDB:

• Will review requests to expend HPG funds.

• Will arrange appropriate review and/or approval within the NSW Department of Health, noting that any expenditure will need to be managed within the Capital Program limits.

Additional approval requirements may be required for expenditure > $1 million. BACKGROUND About this document Radiation Oncology Health Program Grants (HPG) are funds paid by the Australian Government to approved public and private Radiation Oncology Treatment Centres (ROTC) for major equipment associated with services detailed in the radiation oncology section of the Medicare Benefits Schedule (MBS), Group T2. HPGs operate as a reimbursement scheme, where funding is provided on a ‘per attendance’ basis for services to Medicare-eligible patients (private inpatient and privately-referred non-inpatients).

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CHAPTER 1 – PURCHASING PROCEDURES 1.34.4 Medicare Australia makes HPG payments to approved providers monthly, based on the number of eligible services claimed in the previous month and the HPG rates for each service. The HPG rate is determined by the Australian Government and reviewed annually. The Radiation Oncology HPG is separate from, and complementary to, Medicare benefits. Medicare only reimburses patients for the professional costs of radiation oncology services provided to them. It does not provide funding for the cost of capital equipment. Area Health Services must seek approval from the NSW Department of Health to expend HPG funds. The purpose of this policy is to advise Area Health Services that they must request approval from the NSW Department of Health to expend Radiation Oncology HPG funds for proposed purchase of eligible radiation oncology equipment, and to provide advice on the information that is to be provided to the Department. Area Health Services should note that all expenditure above $10,000 will need to be managed within the NSW Health Capital Program limits. HPG requests above $10,000 will require approval from the Chief Procurement Officer and/or the Chief Financial Officer. HPG funds are to be used as a source of funds towards replacement of HPG eligible equipment. Networking Information System (NIS) funds are to be used towards the cost of networking the treatment and planning equipment at the ROTCs. For the purposes of this policy, NIS funds are part of HPG funds. Key definitions

HPG-eligible equipment

The Australian Government prescribes which types of radiation oncology equipment are eligible. New equipment may be added to the eligibility list from time to time. As at February 2010, the following is the list of radiation oncology equipment that is eligible to receive HPG payments from the Australian Government:

• Linear accelerator – single photon

• Linear accelerator – dual photon

• CT interfacing planning computers and workstations and planning computers for simple calculations and monitor unit checks

• Brachytherapy High Dose Rate (HDR)

• Brachytherapy seeds

• Simulators – conventional with or without CT attachments and CT-SIM (used solely for treatment planning purposes).

HPG funds are to be used as a source of funds towards replacement of HPG eligible equipment.

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NIS payments

NIS payments are made by the Australian Government towards the cost of networking the treatment and planning equipment at the ROTC. They are part of the HPG income received from the Australian Government. The disbursement of NIS funds normally occurs in November and May of each financial year. The proportion of costs payable is calculated by reference to the number of linear accelerators at the ROTC, according to a rate determined by the Australian Government. It is calculated from time to time using a formula outlined in the Legal Instruments. NIS funds can be used towards new or replacement items to enable networking of treatment and planning equipment.

Legal Instrument

The Legal Instrument is the document issued by Australian Government to the Area Health Service, which lists the radiation oncology equipment which is eligible for HPG payments from the Australian Government. It includes equipment numbers, equipment description, accessories/number of workstations, capital balance, end dates for HPG payments, Medicare Schedule items and amount payable, and an explanation for NIS payments. It is revised as required when, for example, HPG eligible equipment changes at the ROTCs, reimbursement rates changes, or Medicare Schedule items change. Procedure for seeking approval to expend HPG funds Procedure for Area Health Service If an Area Health Service wishes to purchase equipment with a total cost >$250,000, the equipment purchase must be included on the Area’s Locally Funded Initiatives Program. Any request for projects to expend HPG funds >$250,000 that are not on the Locally Funded Initiatives Program, will not be approved. Projects that are >$10,000 and <$250,000 must be included in the Area’s Repairs, Maintenance and Renewal allocation. Area Health Services must provide the following information in writing to facilitate the review of the request to expend HPG funds:

• Brief explanation of need for equipment to be replaced;

• Details of equipment including type (linear accelerator etc), brand to be acquired;

• Estimated total cost of equipment (a copy of quote should be provided if available);

• Current level of funds in the HPG account;

• Any commitment proposed for use of funds within the financial year in which the proposed expenditure is to occur;

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CHAPTER 1 – PURCHASING PROCEDURES 1.34.6 • Current average monthly accrual of funds;

• Confirmation that the proposed purchase, if > $250,000, is on the Area’s Locally Funded Initiatives Program;

• Confirmation that the proposed purchase, if >$10,000 and <$250,000, is on the Area’s Repairs, Maintenance and Renewals Program;

• If the replacement is >$1 million, a supporting Business Case must be provided, and additional approvals may then be required; and

• Details for a contact officer who can provide more information, if necessary about the HPG request.

After the equipment has been purchased, the Area Health Service must:

• Provide the equipment’s serial number and the operational date to Statewide Services Development Branch.

Statewide Services Development Branch will provide relevant details to the Australian Government so that Medicare Australia can commence HPG payments at the correct rate and time. Procedure for Statewide Services Development Branch Statewide Services Development Branch will review all applications from Area Health Services to expend HPG funds. The Director Statewide Services Development Branch:

• Will review requests to expend HPG funds; and

• Will arrange appropriate review and/or approval within the NSW Department of Health, noting that any expenditure will need to be managed within the Capital Program limits.

Additional approval requirements may be required for expenditure > $1 million. Procedures after approval has been given Area Health Services must:

• Advise Statewide Services Development Branch of the equipment number of the specific pieces of equipment and date that the equipment commences operation;

• Advise in writing if any aspects of the equipment request/purchase change, for example, if one piece of equipment already approved needs to be amended to another piece of equipment; and

• Comply with NSW Department of Health purchasing and tendering policies when acquiring equipment.

Statewide Services Development Branch must:

• Provide relevant equipment details to the Australian Government so that Medicare Australia can commence HPG payments at the correct rate and time, and so that the Legal Instrument can be amended by the Australian Government, as necessary.

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CHAPTER 1 – PURCHASING PROCEDURES 1.34.7 Procedure for lodgement of annual HPG statement Area Health Services must provide a statement to Statewide Services Development Branch for each financial year, showing HPG opening capital balance, HPG income (for each month), HPG expenditure, and closing balance. HPG expenditure must include amounts for individual pieces of equipment and month in which the expenditure was completed.

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Appendix 1-A

NSW GOVERNMENT CODE OF PRACTICE FOR PROCUREMENT

DETAILS OF SPECIFIC PRACTICE REQUIREMENTS ENVIRONMENTAL MANAGEMENT The Government expects government agencies and all other parties to identify the potential environmental opportunities, risks and impacts of their activities and to adopt measures to: • realise those opportunities, manage those risks, and enhance and protect the environment; • encourage recycling and re-use of materials and minimise waste; and • support effective use of scarce resources - including energy, water and materials. Service providers shall have a demonstrated commitment to, acceptable performance with, and systematic approach to, environmental management. On construction projects, all service providers are required to develop and implement an appropriate site specific environmental management plan. Tenderers and service providers for major contracts are required to have a corporate Environmental Management System accredited by a government agency. The Environmental Management Systems Guidelines of the Capital Project Procurement Manual describe the management practices required of all parties on NSW Government construction projects. OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT AND WORKPLACE INJURY MANAGEMENT Occupational Health and Safety Management The Government attaches a high priority to the continuous improvement of occupational health and safety management and workplace injury management in procurement for all construction and other industry participants. Service providers shall have a demonstrated commitment to, acceptable performance with, and systematic approach to, occupational health and safety management and workplace injury management. The OHS&R Management Systems Guidelines of the Capital Project Procurement Manual describe the management practices required of all parties on NSW Government construction projects. Occupational Health and Safety Compliance Service providers and their employees must comply with their occupational health and safety obligations under the Occupational Health and Safety Act (NSW), the Workplace Injury Management and Workers Compensation Act (NSW) and Regulations, workers compensation insurance premium requirements, relevant OHS industry codes of practice, and safety and dispute settlement procedures in applicable industrial awards and approved agreements.


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Dispute Resolution Where a dispute about occupational health and safety matters cannot be resolved at the workplace, determinations by WorkCover New South Wales inspectors made under the Occupational Health and Safety Act (NSW) and OHS Regulation 2001 must be accepted by all parties. No payment shall be made to employees for time spent engaged in industrial action (as defined in either the Workplace Relations Act (Commonwealth) or the Industrial Relations Act (NSW)), unless payment is authorised or ordered by either the Australian or NSW Industrial Relations Commissions. WORKPLACE PRACTICES Obligations Relating to Employment Principal contractors are accountable for compliance by their service providers with their legal obligations regarding their employees working on construction projects. All service providers, their employees and their unions must also comply with their workplace obligations, including the provisions of all applicable industrial awards and approved agreements. Arrangements or practices designed to avoid workplace obligations under relevant laws, industrial awards and approved agreements are not permitted. Industrial Relations Management The Government is committed to an improved industrial relations planning and management culture and better employee and employer relationships in the construction industry and other industries. Service providers are required to develop and maintain a pro-active and responsible approach to the management of industrial relations at the enterprise level and on projects. The Industrial Relations Management Guidelines of the Capital Project Procurement Manual describe what is required of tenderers, and the management practices to be implemented by service providers on construction projects. Enterprise Agreements Enterprise agreements are important elements in achieving continuous improvement and best practice. Enterprise agreements should ideally: • reflect the needs of the enterprise, including the scope of the enterprise’s operations and projects; • improve remuneration and working conditions, based on quality of work and productivity; and • give effect to measures to increase productivity, which may encompass:

o improved occupational health and safety and workplace injury management o practices; o better training and skill development strategies; and o cooperative, flexible workplace arrangements, relationships and practices.


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Project Agreements Project agreements incorporating site-wide payments, conditions or benefits may be negotiated where the strategy has first been authorised by the relevant agency. Generally, project agreements will only be appropriate for major construction projects as defined by the agency. Typically, major projects will have some or all of the following features: an extended construction period, high cost, several identifiable contract packages within an overall project, and special industrial relations, skill development and occupational health and safety requirements. If a tenderer foreshadows a project agreement and the tenderer is awarded the contract, a business case in support of that strategy must be submitted by the successful tenderer and only proceed if approved by the agency involved. This process should be completed before site works begin. Payments, conditions or benefits in a project agreement must be related to improved productivity measured in time and/or cost saving performance. This performance may be achieved as a reduction of the period of construction or a reduction in the construction cost or both, to the benefit of the agency. The agency here means the government agency responsible for the project, irrespective of whether there is a construction contract between the agency and a service provider. For example, in a privately financed project there may not be a construction contract with the relevant government agency but the agency will still retain the right, in consultation with the relevant service provider under the privately financed project contract, to authorise the negotiation of a project agreement. The integrity of existing individual enterprise agreements shall be maintained with any project agreement. Therefore project agreements should not override the approved enterprise or workplace agreements. While there may be a provision in a relevant enterprise or workplace agreement that enables the signatories to that agreement to include these provisions in a project agreement, there shall be no double payment or allowance of conditions or benefits. The signatories to a project agreement may not use any term in the project agreement as a precedent on any other project or for any other purpose. To take effect, a project agreement must be approved under either the Workplace Relations Act (Commonwealth) or the Industrial Relations Act (NSW). Site Allowances Site allowances shall not be paid unless awarded by an industrial tribunal, after arbitration. Site allowances are awards made by the Industrial Relations Commission under the Industrial Relations Act (NSW) to provide compensation to affected employees engaged at a particular work site, if they encounter conditions that are so far removed from the type of conditions ordinarily experienced on construction sites as to warrant extra compensation. Dispute Resolution Service providers are required to make every effort to resolve grievances or disputes with their employees and applicable unions at the enterprise level, in accordance with legal obligations and the procedures outlined in applicable industrial awards or approved agreements.


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Where resolution is not possible at a particular enterprise level, the graduated steps, involving higher levels of authority, in the dispute settlement procedures contained in applicable industrial awards or approved agreements are to be complied with. This includes referral of the grievance or industrial dispute to the appropriate industrial tribunal for settlement. All parties to a grievance or dispute are required to comply with tribunal decisions, subject to any legal appeal rights. While the dispute resolution procedures are being followed: • no industrial action is to take place; • the conditions prior to the dispute must prevail; and • work is to continue normally. Strike Pay No payment shall be made to employees for time spent engaged in industrial action (as defined in either the Workplace Relations Act (Commonwealth) or the Industrial Relations Act (NSW)), unless payment is authorised or ordered by either the Australian or NSW Industrial Relations Commissions. Membership of Registered Organisations Membership of unions or employer associations is encouraged through proper and lawful means. This precludes victimisation, through any mechanism, for membership or non-membership of organisations. Project Impacts The service provider must advise the client during the progress of the work, at the earliest opportunity, of any industrial relations or occupational health and safety matter which may have an impact on the progress of work, the contract, costs or other related contracts. TRAINING MANAGEMENT Service providers shall comply with the Government’s training management requirements and guidelines. Service providers will be encouraged to pursue and implement training and skill development strategies appropriate to the focus, size and capacity of the individual enterprises and to their contracts. The Training Management Guidelines of the Capital Project Procurement Manual describe the management practices required of all parties on NSW Government construction projects. ABORIGINAL PARTICIPATION Tenderers will be required for selected contracts to indicate measures they intend to implement if awarded the contract, including: • extending employment opportunities to Aboriginal people; • enhancing the business skills of Aboriginal people; and • providing economic benefits to Aboriginal communities which could lead to improved conditions in Aboriginal communities.


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The Aboriginal Participation in Construction Implementation Guidelines of the Capital Project Procurement Manual describe what is required of all parties on NSW Government construction projects. EMPLOYMENT AND OUTWORK OBLIGATIONS FOR TEXTILE, CLOTHING AND FOOTWEAR SUPPLIERS The Government requires suppliers of textile articles, clothing and footwear to: • comply to the extent applicable, with all relevant laws, awards and other industrial instruments in

relation to the employment and management of employees including outworkers; and • take all reasonable steps to ensure that their service providers comply to the extent applicable, with all

relevant laws, awards and other industrial instruments in relation to the employment and management of employees including outworkers.

Tenderers for NSW Government clothing, textile and footwear contracts must submit a statutory declaration to this effect. A tender will not be considered unless such a statutory declaration is lodged with the tender.


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Appendix 1-B STANDARDS OF BEHAVIOUR All parties will behave in accordance with the following standards at all times. Honesty and fairness:

Parties will conduct all procurement and business relationships with honesty and fairness.

Accountability and transparency:

The process for awarding contracts on government projects will be open, clear and defensible.

No conflict of interest: A party with a potential conflict of interest will declare and address that interest as soon as the conflict is known to that party.

Rule of law: Parties shall comply with all legal obligations.

No anti-competitive practices:

Parties shall not engage in practices that are anticompetitive.

No improper advantage: Parties shall not engage in practices that aim to give a party an improper advantage over another.

Intention to proceed: Parties shall not seek or submit tenders without a firm intention and capacity to proceed with a contract.

Co-operation: Parties will maintain business relationships based on open and effective communication, respect and trust, and adopt a non-adversarial approach to dispute resolution.

TABLE OF CONTENTS

CHAPTER 2 - SIMPLE PROCUREMENT

2.1 INTRODUCTION.................................................................................................. 2.1 2.2 COMMON USE PERIOD CONTRACTS ........................................................... 2.2 2.2.1 Rural Purchase Exemption ....................................................................................... 2.3 2.2.2 Government Contracts for Bulk Supply ................................................................... 2.3 2.3 PURCHASES WITHOUT QUOTATIONS......................................................... 2.4 2.4 QUOTATIONS (NOT IN CONTRACT PURCHASES) .................................... 2.4 2.4.1 Obtain approval and Invite Quotations..................................................................... 2.6 2.4.2 Evaluate Responses and Select a Service Provider .................................................. 2.6 2.4.3 Approve the Selection .............................................................................................. 2.7 2.4.4 Monitor Performance ............................................................................................... 2.7 2.4.5 Record Keeping........................................................................................................ 2.7 2.4.6 Other Considerations................................................................................................ 2.8 2.4.7 Variations After Contract Commencement .............................................................. 2.8 2.5 EMERGENCY PURCHASES .............................................................................. 2.8 2.6 ORDER SPLITTING............................................................................................. 2.9 2.7 PRINTING/STATIONERY .................................................................................. 2.9 2.8 MAINTENANCE CONTRACTS ......................................................................... 2.11 2.9 POLICY DIRECTIVE ON THE ACQUISITION OF

CORPORATE APPLICATION SYSTEMS........................................................ 2.11 2.9.1 Summary of GSAS................................................................................................... 2.11 2.9.2 Background of GSAS............................................................................................... 2.11 2.9.3 Policy ........................................................................................................................ 2.12 2.9.4 How to Use GSAS.................................................................................................... 2.12 2.10 STATE GOVERNMENT CONTRACTS EXEMPTIONS................................. 2.13 2.10.1 Exem ption Procedures.............................................................................................. 2.13 2.10.2 Further Considerations ............................................................................................. 2.14 2.10.3 Lodgement of Applications for Exemptions ............................................................ 2.15 2.10.4 Health Quality Reporting System – SCCB Contract Exemptions............................ 2.25 APPENDICES 2-A Contracts Exemption Applications Web-based Forms............................................. 2.16 2-B State Contracts Control Board.................................................................................. 2.20 2-C Evaluation of Clinical Consumables and Equipment ............................................... 2.23

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CHAPTER 2 – SIMPLE PROCUREMENT 2.1 2.1 INTRODUCTION Simple procurement covers the purchase of goods and services that are generally of low risk and where the value for money decision factors are likely to be primarily price and availability. Simple procurement methods described in the document include: 2.2 Buying through Common Use Period Contracts 2.3 Purchase without quotations up to $3,000, or 2.4 Written quotations up to $250,000

For Consultancies which have different $ levels see Consultancy section. Simple procurement occurs everyday through the organisation. While this type of procurement is generally straightforward, problems can arise if the process is mismanaged or key steps are omitted. Procurement considerations like risk analysis and performance management should not be overlooked because of the low value of the purchase. The advice of the Department of Health’s Asset and Contract Services Branch is to be sought in relation to all contracts which fall outside of the purchasing policy. Probity advice is required to be obtained for contracts in excess of $30,000: i) which have not followed standard procurement processes; ii) where there could be potential or perceived conflicts of interest; iii) where there might be subsequent probity issues. The characteristics of simple procurement are typically that: 1. the details of the product or service being procured are known 2. the product is readily available 3. the product has been procured previously 4. there is a competitive market 5. the primary selection criteria are price and availability 6. there are low risks. The process of simple procurement usually consists of the following steps: 1. Define the need and specification 2. Establish potential sources of supply 3. In case of clinical consumables and/or equipment, evaluate the product and register all

evaluation information onto NSW Health Procurement Clinical Consumables Evaluation Database and Equipment Evaluation Database, respectively. This is system is located at http://internal.health.nsw.gov.au/business/hp [Refer to appendix 2-C]

4. Determine the procurement method 5. Obtain the appropriate approval 6. Invite offers/quotations 7. Evaluate responses and select a service provider 8. Obtain approval for the decision 9. Monitor performance of the service provider.

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CHAPTER 2 – SIMPLE PROCUREMENT 2.2 Checklists It is mandatory that the checklists at Appendices 3-G, 3-H, and 3-M (DoH only) are completed, viz:

Appendix 3-G DoH Only Procurements $30,000 to $250,000 Appendix 3-H Health Services Procurements $30,000 to $250,000 Appendix 3-M DoH Only Procurements Contractors under $30,000 2.2 Common use period contracts (State Contracts Control Board – SCCB) A period contract (or a “supply” or “common-use” contract) is a formal arrangement with a supplier to provide on request, equipment, supplies or services at agreed rates and conditions for an agreed period. NSW Government period contracts are arranged so that the purchasing power of many agencies can be combined to obtain the best value from suppliers. IF AVAILABLE UNDER CONTRACTS ARRANGED BY THE STATE CONTRACTS CONTROL BOARD, THEY SHALL BE OBTAINED FROM THOSE SOURCES (NO MATTER THE SOURCE OF FUNDS) UNLESS THERE ARE SPECIFIC REASONS JUSTIFYING OTHERWISE. SUCH REASONS MUST BE SPECIFICALLY APPROVED BY THE DIRECTOR-GENERAL, DEPARTMENT OF HEALTH, FOLLOWING ADVICE FROM NSW HEALTH PROCUREMENT, PRIOR TO THE PURCHASE BEING MADE. See section 2.10 for details on exemption application. AREAS/INDEPENDENT HOSPITALS ARE TO ADVISE THE RESPECTIVE CONTRACT OFFICERS AT THE OFFICE OF GOVERNMENT PROCUREMENT OF THE REASONS FOR DISSATISFACTION WITH CONTRACT ITEMS. PERIOD CONTRACTS ORGANISED BY THE NSW DEPARTMENT OF COMMERCE MAY ALSO BE UTILISED WHEN PURCHASING EQUIPMENT, EG. ELECTROMEDICAL. The State Contracts Control Board (SCCB) has established over 300 centralised purchasing arrangements of this kind. Some of the goods and services available under these arrangements include: • fuel • motor vehicles • air travel • stationery • electrical and hardware components • health consumables • food, and • information technology components and services. These contracts can be accessed by agencies and other approved organisations. Information on these contracts and their use can be obtained from State Procurement, a business unit of the NSW Department of Commerce. The main features of common use period contracts are:

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CHAPTER 2 – SIMPLE PROCUREMENT 2.3

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• service providers have been identified and selected in accordance with the NSW Government Code of Practice for Procurement

• purchases are carried out without the need for agencies to obtain competitive quotes • essential contractual terms and conditions are already established, and • the goods and services are selected in accordance with the NSW Government Procurement Policy

and other relevant government policy obligations. Buying off a common use period contract constitutes ‘in contract’ purchasing. Purchases made where no common use period contract exists are considered ‘not in contract’, and are covered by the competitive quotation process, as required by the General Purchasing Delegation Limits (see Chapter 1, Section 1.6). A contractual arrangement is activated by placing an order specifying the requirement directly with the service provider. Each order placed by an agency or organisation comprises a separate contract, operating under the terms of the specific common use period contract. If a common use period contract lists more than one contracted service provider to supply similar goods or services, the agency should match its needs with the alternatives offered by the different service providers. 2.2.1 Rural Purchase Exemption The State Contracts Control Board has approved of purchases being made locally in country areas (outside Sydney, Newcastle and Wollongong Metropolitan areas) up to a value of $3,000, (viz. contract items do not have to be purchased) subject to the conditions detailed below, where advantages exist over items under contract. This exemption is subject to the requirement that an item may not be “split” into its components nor a succession of orders for quantities of the same item issued for the purposes of avoiding the $3,000 limit or any limitations to delegation of authority. 1. This approval does not apply to contracts arranged specifically for country areas. Officers of the

opinion that any local firm may be in a position to service a local contract should advise the firm to apply to the State Procurement in writing, for inclusion on the mailing list for the appropriate tenders.

2. The officer approving a local purchase is to certify that the local purchase is more advantageous

than contract and to record the reasons, e. g. lower after inclusion of freight, delivery time, warranty and after sales service, etc. This information should be retained for audit purposes.

3. Three (3) quotations are to be obtained where possible. 2.2.2 Negotiation of Government Contracts for Bulk Supply on Behalf of Areas/Independent

Hospitals Where an area/independent hospital or several areas/independent hospitals combined consider that due to quantities or other variations to be ordered, more favourable prices or conditions should be sought from the State Procurement contractor the undermentioned action is to be taken: • Quantities and/or delivery requirements should be sufficiently different to combinations available

under the contract to expect that more favourable rates could be achieved.

CHAPTER 2 – SIMPLE PROCUREMENT 2.4 • The originating group is to provide indicative cost benefits to justify the large volume purchase. • All requests to be directed through NSW Health Procurement to enable co-ordination prior to

forwarding to State Procurement. • Quotations would be sought from the contracted suppliers under tender conditions thus ensuring

confidentiality and probity in the process. • The originating group to be involved in assessment of the response/s received and in the

decision regarding acceptance.

2.3 Purchase without quotations up to $3,000

For very low value purchases (under $3,000 incl GST) goods and services can be purchased without seeking quotations, providing: • the rates are reasonable and consistent with the market rates for items of a similar nature • regular reviews are undertaken to ensure the reasonableness of prices, including the random

invitation of quotations at appropriate time intervals • the required goods or services are not split into components or a succession of orders for the

purpose of enabling orders to be placed without seeking quotations, and • fairness, equity and ethical dealing are assured.

2.4 Quotations (Not in Contract purchases) $3,001 to $250,000

When purchasing items valued between $3,001 and up to $30,000 (incl GST) at least one quote must be sought. For items valued between $30,001 to $250,000 (incl GST) a minimum of three quotes must be sought. Quotations must be received in writing. When requesting quotations the following information should be provided to the service providers: • a description of the goods or services • specifications • the quantity required • the name and telephone number of the officer to whom quotes and enquiries should be directed • delivery lead time, and • delivery point. 1. The officer should also ensure: 2. • all receive the request at or about the same time • all receive the same information • represent a fair selection of available service providers, and • be requested to submit their quotations in writing to a specified location by the due date and

time. Where only one quotation is required viz, up to $30,000 it is to be ensured that: • Rates are considered reasonable and consistent with normal market rates for items of a like

nature; and • Requirements not being split into components nor succession of orders for the same goods or

services for the purpose of enabling the goods/service to be obtained under the $30,000 (3 quote) limit.

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A request for a quotation should also show a request number and the closing date, which must allow a reasonable time for potential service providers to respond. All quotations are to be carried out as hereunder (NSW Government Code of Practice for Procurement July 2004). The officer calling and receiving quotations shall record the following information: • a description of the goods or service for which quotations were invited; • a list of organisations invited to submit quotations; • a list of the organisations submitting quotations and the cost and delivery details of the goods and

services tendered; • in any instance where fewer than three quotations are obtained, the reasons for not inviting more

quotations. All quotes are to be treated confidentially. Prices and conditions quoted are not to be divulged until quotation action has been completed. No person or firm quoting is to be offered any advantages over any other person or firm quoting. (see Clarification of Requirements, next page) A copy of the quote or quote/schedule should be attached to the purchase requisition/payment voucher as support documentation. Quotations may be accepted where necessary for an estimated amount (e.g. repair of an electric motor where the final cost could not be determined until the repair is complete) providing that it is guaranteed that the estimated cost will not be exceeded by more than 30%. Quotations may be accepted on a cost per hour, plus parts, basis when the total final cost cannot be estimated. Details regarding reasons for passing over more financially beneficial quotes are to be retained on file. To ensure competitiveness, officers are to not knowingly invite multiple quotes from companies or branches of the same parent organisation. No quotation is to be entertained when it is received after the time fixed for the receipt except where: i) there exists clear evidence that the quote was posted before that time; or ii) facsimile/e-mail advice was received before that time detailing price and delivery schedules etc.

The evidence or the facsimile/email advice referred to shall be affixed to and retained with the quotation.

In all cases where fewer than three (3) quotes are obtained or emergency provisions are invoked the full reasons and support documentation are to be maintained and held pending audit.


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2.4.1 Obtain approval and invite quotations Obtaining approval When the need and specification have been determined, and the method of procurement selected, seek approval from the appropriate delegate for funding and permission to proceed. Inviting quotations Only procurement actions that can be funded, and have been given a firm intention to proceed, should be taken to the market. The NSW Government Procurement Policy frame-work requires NSW Government agencies to provide equal opportunity to local service providers of goods and services to compete for government business. Clarification of requirements Potential service providers may seek clarification of the specifications or other requirements after requests for quotations are issued. Procurement ethics require that potential service providers are treated equally and fairly. Procurement personnel must ensure that clarifying information is given to all participating service providers to ensure that there can be no claims of unfair advantage. Late quotations A closing time for the submission of quotations is to be set. Procurement officers are reminded of the ethical and probity issues involved in accepting and considering late offers. The consideration of late offers may raise questions about the probity of the evaluation process. Late quotations should not be considered, except where the appropriate delegate is satisfied that the integrity and competitiveness of the process is not compromised. If a late quotation is considered or accepted, the reasons for doing so must be fully documented. 2.4.2 Evaluate responses and select a service provider Evaluation should be conducted by those with relevant skills and knowledge appropriate to the value and importance of the procurement. Any conflict of interest must be declared and resolved. The evaluation should achieve a fair comparison between the responses. The same evaluation method should be applied to each response. Government agencies must ensure the commercial confidentiality of responses is maintained. For higher value procurements, or those with a higher risk factor, an evaluation team may need to be established. The selected quotation must provide the best value for money when evaluated against the assessment criteria. Best value is not necessarily lowest price. It should be a combination of quality, reliability, timeliness, service, whole-of-life costing, and other factors as specified in the requirements.

CHAPTER 2 – SIMPLE PROCUREMENT 2.7 The NSW Government Code of Practice for Procurement July 2004 specifies that ‘bid shopping’ (trading off one service provider’s price against the price of another in an attempt to seek lower prices) be not permitted in government procurement. When the responses have been evaluated and a service provider selected, record the reasons for the recommendation, particularly if the service provider offering the lowest price is not recommended. For smaller, less complex purchases, note the reasons for the selection on the relevant purchasing documents. 2.4.3 Approve the selection An officer with the appropriate delegation should approve the recommendation to accept a quotation. Approving officers must satisfy themselves that the best offer, as measured against the evaluation criteria, is being accepted. When the selection process is completed, promptly advise both successful and unsuccessful respondents of the decision. Upon request, provide feedback to unsuccessful service providers. Limit feedback to the unsuccessful service provider’s response and how it did not meet the requirements. The name of the successful service provider and the price accepted may be provided. In the feedback, comparisons should not be made with the successful service provider’s response. Unless otherwise authorised by the service provider or required by legislation, information on unsuccessful service providers responses must remain confidential.

Premier’s Memorandum 2007-01 Public Disclosure of Information Arising from NSW Government Tenders and Contracts (See Chapter 3, section 3.7.4) provides guidelines on what information relating to the Government’s contractual arrangements with the private sector should, and should not, be made public. 2.4.4 Monitor performance The benefits generated by effective monitoring are significant in terms of encouraging continuous improvement, assisting in the future design of specifications and contracts, and ensuring the terms and spirit of the contract are adhered to, including the commitment to service delivery. After placing orders with the successful service provider, monitor the performance of the service provider against the specifications and requirements stated. Refer to the Department of Commerce Service Provider Performance Management Guideline which details the objectives, application and benefits of service provider performance management. 2.4.5 Record keeping Actions and decisions need to be accounted for and, in particular, good record keeping of decisions is imperative for auditing and accountability purposes. Refer to Premier’s Memorandum PM98-16: Records Management Standards and Practices. Effective and efficient contract management cannot be done properly without accurate and organised records. Contract records are kept so that: • clear public accountability can be demonstrated;

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• regular and accurate reports to management and clients are prepared; and • information is available for the assessment of claims and the resolution of disputes. Comprehensive records should be maintained throughout the purchasing process, e.g checklists, evaluation criteria, weightings, decision-making processes and decisions made. These records should provide sufficient information to enable audit and independent review functions to be carried out. An individual file should be maintained for each procurement where possible. Records could include details of telephone conversations wherein any type of commitment etc. is made. Departure from established procedures for purchasing of services should only be for sound, well-documented reasons. These reasons should be approved at a senior level by those not directly involved in the process. 2.4.6 Other considerations Officers must be aware of both The Australian and New Zealand Government Procurement Agreement and NSW Government Preference Scheme. Full details of an organisation’s responsibilities appear in Chapter 3 Appendix 3-B. 2.4.7 Variations after the contract has commenced Variations to the scope of the work requiring increased payments to the contractor can at times be appropriate as a result of unforeseen circumstances. Particular care is needed to avoid: • variations being used by a successful low bidder to increase the value of the job; • variations being use to get around requirements for competitive bidding, e.g. 3 quotes, tenders; • variations increasing the scope of the contract out of proportion to the original scope. All proposals for variations require very careful consideration, applying the principles of value for money; probity and accountability. Proposals to increase the value of the consultancy by 10 per cent or more demand a particularly thorough review. Apparently “exceptional” cases should be treated very cautiously. Variations to the contract during the progress of the project must be reported without delay and prior approval obtained for any proposed significant changes in work or cost. It is not good practice for approvals for significant changes in work or cost to be given by employees directly involved in the supervision of the contractor. Proposals for such variations are to be considered and determined by an independent senior officer, nominated by the Chief Executive. There can be a number of reasons for variation of the scope of a project after it has commenced, however, the most prevalent reason is a “weak” specification. It is imperative that officers developing specifications either have the necessary experience or obtain expert advice so that comprehensive specifications are developed. 2.5 Emergency Purchases Notwithstanding the provisions of this Manual the Chief Executive or his delegate may, without following the prescribed procedures in this Manual, purchase stores, or provision of services, in any case of extreme emergency to a value sufficient to meet that particular emergency.

CHAPTER 2 – SIMPLE PROCUREMENT 2.9 Nothing in this section authorises the purchase of stores or the provision of services: a) at a price that is not reasonable or proper; or b) in excess of those necessary to meet the immediate needs of any emergency; or c) otherwise than in accordance with the procedures provided for by this Manual in any case

where any approval under this Manual could be obtained in sufficient time to meet the Health Service need.

2.6 Order Splitting Requirements must not be split into components or a succession of orders for the same services for the purpose of enabling the item/service to be obtained under the $250,000 limit for tenders or $30,000 for quotes, or the limits specified for printing. In respect to printing, the monetary threshold includes the whole printing process of design, layout, printing, binding, etc. 2.7 Printing/Stationery Printing The delegations for printing have been aligned with the delegations for procuring goods and services. NSW Health has an Agreement with its preferred supplier to provide a print management service. Procurement of printing under this Agreement precludes the need for staff to obtain additional quotations as the service provider will undertaken this task on behalf of the Health System. Additional information on the procurement of printing can be found at http://internal.health.nsw.gov.au/ecsd/ssc/purchasing.html and then clicking on the Printing link.

* STATE HEALTH FORMS (PD2009_072) PURPOSE This policy and attached procedures define the processes for the creation and management of State Health Record Forms incorporated in Health Care Records. The scope of the policy is to have clinical statewide forms filed in the Health Care Record and the standardisation of the physical Health Care/Medical Record Cover as well as other health record documents such as labels and dividers. This policy includes but is not limited to Inpatient facilities, Community Health Centres and outpatient clinics/areas. MANDATORY REQUIREMENTS Health services are required to use standardised forms developed by the NSW Health State Forms Management Committee. All State Health Record Forms for inclusion (or potential for inclusion) in the Health Care Record must be approved by the NSW Health State Forms Management Committee (SFMC) or Health Service forms for use only within the Health Service must be endorsed by the local forms committee.

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http://internal.health.nsw.gov.au/ecsd/ssc/purchasing.html


* Health Services must establish: • A functional health service Health Records Forms Committee

• Processes to ensure all line managers are accountable for the effective implementation of standard health record forms across the health service, including Directors of Clinical Operations, Clinical Governance and Nursing and Midwifery Services, Health Information Management units and facility based Health Information services.

All NSW Health State Record forms can only be obtained from the State Print and Print Management contracted supplier. IMPLEMENTATION The Health Service Chief Executive is responsible for:

• Establishing a functional health service Health Records Forms Committee, a member of which must act as representative to the NSW Health State Forms Management Committee (SFMC).

• Establishing processes to ensure all line managers are accountable for the effective implementation of standard health record forms across the health service, including Directors of Clinical Operations, Clinical Governance and Nursing and Midwifery Services, Health Information Management units and facility based Health Information services.

The Health Service Records Forms Committee is responsible for:

• Reviewing clinical forms intended for statewide use.

• Approving all clinical forms to be used by its Health Service.

• Ensuring all clinical forms meet the requirements of relevant Australian Standards (e.g. AS2828), NSW Health Policy Directives, a Health Service and State Health Records Forms templates.

• Working with the NSW Health, appointed Print and Print Management Services contracted provider, to facilitate Statewide implementation of the Policy.

To standardise clinical forms across their health service where possible. • To provide a formalised communication network between Health Service forms users,

Executive, the contracted Print Management Services provider and the SFMC.

• To make recommendations for ongoing introduction/amendment/deletion of forms.

• Ensuring that the terms of reference includes a requirement that direct clinical contribution is obtained as required.

The custodians and authors of Health Records Forms (including the NSW Department of Health) are responsible for:

• Ensuring all steps in the health record forms development processes adhere to policy.

• Submitting relevant forms through their health service representative to the SFMC for review and endorsement.

• If NSW Health Policy Directive or Guideline requires a Health Record form to be used or created in order to comply with that policy or guideline the form must be submitted directly to and processed through the NSW Health SFMC and form a part of that Policy Directive or Guideline before it is distributed for implementation.

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CHAPTER 2 – SIMPLE PROCUREMENT 2.10.1 Health Support is responsible for:

• Monitoring and Reporting:

o Supplier (Print and Print Management Services) performance o Quality issues (product, artwork and supply) o Health Service usage and expenditure o Health Records Forms gallery

• Management and support of the SFMC.

• Implementation of a Communication Plan.

• Collaboration with Health Item Master File program.

• Maintenance of the State Health Record Forms and bar-code number allocation register.

• Management of print supplier contract and meeting costs associated with contract, (e.g. destruction of obsolete forms etc).

Persons undertaking the evaluation of forms are responsible for:

• Confirming that the form is compliant with the current Australian Standards on Hospital Medical Records (AS2828).

• Ensuring the form has a consistent format and template.

• Ensuring that the form meets the criteria as per stated throughout the Appendices to this policy.

• There is clear evaluation criteria against which the form is to be evaluated.

• A diverse group is selected to evaluate where applicable and possible and that consultation with any Health Service which is taking part in the evaluation has been consulted with at the highest level.

• Evaluation report is clearly documented and that any changes made to a form are within the boundaries of any policy directive which the form maybe written from.

• That any change which is outside a policy within which the form has been written from is referred back to the content owners for approval.

• That the form is in and remains in State Forms Management Committee State forms template.

1. BACKGROUND 1.1 About this document In line with the strategic reform initiative, NSW Department of Health has instructed Health Support Services to include forms rationalisation and print management across NSW Health. This project will ultimately cover all forms however initially health records rationalisation is being addressed. It is estimated that there are approximately 15,000 commercially printed health record forms being used across NSW Health. There is not a common Statewide process to develop or review health (clinical) record forms. Not all forms comply with current Australian standards (e.g. AS2828). NSW Department of Health develops policies and guidelines with health records forms incorporated for implementation across NSW Health without always making provision for –

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CHAPTER 2 – SIMPLE PROCUREMENT 2.10.2

*

• A co-coordinated implementation plan across all Health Services and agencies

• Compliance with the current Australian Standards (i.e. for paper-based health care records - AS2828)

• Review of the printing and distribution requirements and impact across all Health Services and agencies.

1.2 Key definitions Health Record Form: A record of the provision of care, assessment, diagnosis, management and/or professional advice given to a person. This term is used inter-changeably with clinical form. A Health Record Form is a Clinical form that is endorsed by Health Service Forms Committee for use within the area/service. State Health Record Form is considered to be a:

• Clinical Form that is mandated by NSW Department of Health for statewide usage. See appendix 3 for the Statewide forms templates.

• Clinical Form that Health Services have devised for health service or agency use.

• Clinical Form that has undergone a NSW Health State Forms Management Committee (SFMC) approval process.

Health Care Record: A Health Care Record is a documented account of a patient’s/client’s health evaluation, diagnosis, illness, treatment, care, progress and health outcome that provides a means of communication for all health care personnel during each visit or stay at a health service. It is the primary repository of all information regarding patient/client care. The record is used to care for the patient/client during an episode of care but may also be used for future episodes of care, communication with external health care providers and regulatory bodies, planning, research, education, financial reimbursement, quality improvement and public health. The health care record may also become an important piece of evidence in protecting the legal interests of a patient/client, clinician or Health Service. The health care record may be in hard copy, electronic or other form, and unless otherwise indicated, the provisions of this policy directive apply equally to all health care records regardless of the media in which they are kept. Health Service: a Health Service within the boundaries of the Health Service Act 1997 (which includes Area Health Services/Chief Executive Governed Statutory Health Corporation, Board Governed Statutory Health Corporations, Affiliated Health Organisations - Non Declared, Affiliated Health Organisations - Declared, Public Hospitals) SFMC: NSW Health State Forms Management Committee. Site: Physical facility or service e.g. Hospital, Community Health Centre, Renal Service, Justice Health site. Location: Ward, Oral Health, Clinic, Unit e.g. ICU, ED

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* 1.3 Rationale The introduction of statewide health records forms will assist in:

• Promoting quality processes through

o Consistent business practices when designing and implementing clinical forms across NSW Health.

o Statewide standardised document control for all Health Record Forms included in NSW Health Policies.

• Health Services and agencies transferring to electronic medical records systems.

• Streamlining the implementation of NSW Health Policy and forms at the Health Service and agency level.

• Supporting scanning of health care records, including a standardised bar-coding system and the maintenance of a State Health Record Forms Register.

• Promoting effective and efficient work practice by:

o Decreasing the workload at Health Services and Agencies, who are currently responsible for the implementation of forms incorporated in NSW Health policies and guidelines.

o Standardising information and formatting to assist staff across NSW Health to accurately and consistently collect patient information, regardless of the health care facility or service.

2 NSW Health State Forms Management Committee 2.1 Terms of Reference The Committee has the following Terms of Reference: • Co-ordinate the development of State Health Record Forms and documents.

• Standardise State Health Record Forms and documents and across the whole of NSW Health where possible.

• Ensure compliance with relevant Australian Standards where appropriate.

• Ensure liaison and co-ordination with the Electronic Medical Records Project (eMR) and other related electronic information systems.

• Provide a formalised communication network between form users, NSW Department of Health, Health Support and the contracted Print and Print Management Services Supplier.

• Disseminate forms and related information across NSW Health.

• Approve statewide health record forms and allocate a unique form number.

• Oversee the maintenance of the State Health Record Forms Register.

• Ensure actions and issues are assigned to the appropriate personnel either within Health Support, Health Services/Agencies, NSW Department of Health or the contracted Print and Print Management Services Supplier.

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*

• Regularly review the statewide electronic forms web-site, when developed, for accuracy and initiate remedial action as required.

• Make recommendations for ongoing introduction/amendment/deletion of forms.

• To complement existing Health Service Forms Committees to ensure only endorsed approved (local or state) health record forms are produced for filing in the Health Care Record.

2.2 Governance The Committee will be responsible to the Deputy Director-General, Health System Support. 2.3 Representation NSW Health Services (NSCCAHS/HNEAHS/SESIAHS/SSWAHS/SWAHS/GSAHS/ GWAHS/NCAHS/CHW and Justice Health) Health Support

By Invitation as required

• Standards Australia representative

• NSW Department of Health representative

• eMR Project Team representative

• Ambulance Service NSW representative

• MH-OAT representative

• Print and Print Management Services Contractor representative

• Other persons involved with special projects involving clinical forms and health records 3 Development of Statewide Health Record Forms 3.1 Identification of need for new or revised health record forms Sources for identifying the need for the development or revision of a State Health record form include, but are not limited to:

• State executive sources including legislative requirements, NSW Health Policy Directives, Guidelines, Australian Standards and specific industry requirements, better practice or research evidence

• Service reviews, Incident Information Management System (IIMS), complaints, root cause analysis (RCAs) and peer review

• Internal and External audit reports 3.2 Development Stage Custodians and authors of proposed State Health Record forms are required to:

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*

• Search for an existing or similar form.

• Source relevant documentation where possible and ensure forms comply with Best Practice, both in forms design and clinical practice.

• Ensure compliance with NSW Health policy directives, guidelines and information bulletins.

• Ensure there is endorsement from Health Services and supply confirmation of this in writing to the SFMC.

• Ensure that the form utilises the SFMC Forms Template.

• Contact relevant Health Service Forms Committee to identify which form is to be replaced and provide reasons for replacement

• Through their SFMC representative, send an electronic version of the form and completed application package for approval to the SFMC – see appendix 7 for application checklist

• Consider usage when stock numbers are being established.

• Specify colour, print and other specifications at the time of form submission.

• Comply with relevant Australian Standards (e.g. AS2828)

• Ensure forms are developed in liaison with appropriate clinical representation at both State and Area level.

• Ensure forms meet medico-legal requirements.

• Ensure relevant stakeholders are alerted to form development.

• Ensure training and/or implementation guidelines and materials are developed and distributed to appropriate Area representatives prior to the introduction of the form.

• The AHS is to establish a single line of communication with the SFMC; and the process for submission to the SFMC should confirm the above has been undertaken and the proposal endorsed at an Area Health Service level, prior to submission.

3.3 Considerations The impact of creating new Health Record forms is to be considered. This impact may include:

• Increased staff work load due to staff completing the form and Medical Record/Clinical/Health Information Department filing the form.

• Increased size of medical records, which may impact on storage space and have potential OH&S issues due to the weight

• Costs – for example the colour of form or print, NCR paper, A3 size and booklets. Instructions/protocols/checklists should not, as a general rule, be included on the back of forms. Rather, alternate approaches should be explored to minimize interference with clinical documentation and unnecessary space requirements in the health care record. For example, instructions can be laminated and placed in an obvious area when introducing the form and/or be included in a procedure.

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* Only Health Record forms endorsed by the SFMC (or Health Service Forms endorsed by the local Forms Committee) will be filed in the Health Care Record. If a Health Record form is released for use without an authorized form number and bar-code identifier when one is required, then it will be deemed ineligible to be filed into the Health Care Record. Revised forms, once approved, will be printed for use when the current supply is depleted. If a form is deemed to pose a clinical risk it is to be destroyed at the contracted printers and the artwork removed.

Photocopying of blank State Health Record forms for use and filing in the Health Care Record is not permitted.

3.4 Validation Stage The NSW Health State Forms Management Committee (SFMC) will review the proposed Health Record form based on the following criteria:

• Form must comply with NSW Health State templates and current Health Record Standards (e.g. AS2828).

• A unique form number must be allocated from the State Forms Register.

• A bar code identifier must be allocated based on the determined state form number.

• Working with the NSW Health contracted Print and Print Management supplier, to manage printing of the form using the approved SFMC template.

• Informing author or custodian of approval or non-approval

• Managing the gallery of State Health Record Forms.

• Provide support to authors in design and concepts (e.g. colours of print, paper, scanning requirements).

3.5 Consultation Phase

A consultation phase will occur for a two week period from the time the form is released to the AHS’s or relevant Health Bodies for comments to be received back.

Evaluation Criteria All Health Record Forms will be evaluated on:

• best practice through o Consistent format and standardised template. o Compliance with current Australian Standards on Hospital Medical Records (AS2828)

• provision of supporting policy and guidelines • current clinical policy • clinical work flow • financial resources • implementation requirements and the provision of training materials • decrease in duplication of data items • decrease in space requirements of health records i.e. storage requirements.

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* The evaluation process shall include consultation with the Health Services. 3.6 Transition Period Implementation High usage clinical forms will be identified for standardisation into the NSW Health statewide template. It is expected that this is where the greatest impact should be gained for cost saving and standard work practice. Examples of these forms are; Medical record covers, Progress notes, Fluid Balance charts, etc. Phased Transition The SFMC will determine based on usage and/or clinical criteria the priority for the standardisation of Statewide forms. If more than one form exists then there will need to be consultation with the key stake holders via the members of the SFMC about the design of the most clinically functional and cost effective solution. Once the SFMC has developed a new form the Print Management Services vendor will be advised not to replace current stock of previous old forms. When the stock is low or no longer available the “Flag” on the Print Management Services vendor’s web site will direct users to the NSW Health Statewide standardised form that must be used. The replacement Statewide form must be available on the Print Management Services vendor’s web site before old stock is depleted to ensure continuity of supply. If old stock is still available after 6 months the Print Management Services vendor will identify this issue with the SFMC for a decision to either:

• Contact the owner of the form and advise them of “The option to write off old stock” • Make the stock redundant • Discuss with the relevant Health Service to determine who will bear this cost. The Option to Write Off Old Stock If a Health Service or NSW Department of Health Division needs to write off excess "old" stock (in order to introduce "new" stock rapidly), they must be advised that:

a. The Service Level Agreement Contract allows that the Print Management Services vendor is responsible for the (write off) cost of the first 3 months of stock held,

b. The Health Service would be responsible for the cost of the remaining (unused) "old" stock, and the costs of destruction.

c. Where there is stock held which has not moved in the last 12 months, the Print Management Services contractor would notify the owner of the stock of their intent to write off and destroy (noting the above incurred costs), unless advised otherwise within 2 months time

d. If no response or advice is given after that period, then the stock will be written off and the entire cost of the stock and destruction costs will be invoiced to the initiating source.

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* State Mandated Forms (those included in a NSW Health Policy Directive)

a. If the form is Print on Demand (POD), it can be transitioned to the NSW State Forms Template immediately as there is no stock on hand.

b. If the form is warehoused existing stock will be run out and the form transitioned into the NSW State Forms Template ready to be printed on the next reprint.

c. New forms required by Policy Directives in the process of formulation will follow the requirements of this policy elsewhere described

3.7 Health Record forms that require a trial

The following guidelines are to be followed for introduction of a new State Health Record Forms which are not available in the NSW Health Print and Print Management Contractor’s State Health Record Forms Library:

a. Complete the request and forward it to the Health Service Forms Committee Representative

advising of the need to develop/introduce a State Health Record Form. See Appendix 7 for the Application Checklist.

b. The Health Service or agency Forms Representative is to advise the NSW Health State Forms Management Committee (SFMC) Convenor of the proposed form.

c. The SFMC is to formulate the appropriate Working Party who will be responsible for co-ordinating, providing education and supervising the form trial.

d. The time period required for the trial of a form will be dependent on the usage of form. For forms that have a high usage, a minimum trial period of up to 3 months may be required, whilst forms that have a low usage may require up to a 12 month trial period.

e. During the trial period, stocks of the “old” form (if a revised form) must be withdrawn from circulation, to enable a true and accurate trial of the “new” form to occur.

f. All trial forms to adopt the State Forms Template and to be allocated a ‘Trial State Forms Number category and bar code’.

g. At the end of the trial period, the outcome of the trial must be evaluated to determine whether the new form has been accepted by users (results of a compliance audit). If the trial is unsuccessful the current version should be deleted from the State Health Record Forms website as a State form or re-designed. If a local area wishes to continue using the trial form they must give it a local form number.

h. The final form to be registered with State Forms Number, category and barcode. 3.8 Low Usage Forms Those forms that are identified by the SFMC as extremely low usage can be made available via the relevant website (primarily the NSW Health authorised Print and Print Management suppliers’ website). These forms can be viewed and printed direct from the website. These forms must adhere to this policy including usage of the approved NSW Health clinical forms artwork and must be approved by the NSW Health SFMC. As identified by the SFMC by usage at the present time this is expected to be in the realm of 100 per annum per site.

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CHAPTER 2 – SIMPLE PROCUREMENT 2.10.9 4 REFERENCES 4.1 External Australian Standard AS2828 - Paper Based Health Care Records 4.2 Internal Electronic Information Security Policy (PD2008_052) Medical Records in Hospitals and Community Care Centres (PD2005_004) NSW Health Patient Matters Manual Principals for Creation, Management, Storage and Disposal of Health Care Records (PD2005_127) Privacy Manual - Version 2 (PD2005_593) Medical Records (PD2005_015) 4.3 Glossary SFMC = NSW Health Statewide Forms Management Committee HIMS = Health Information Managers HS = Health Service PD = NSW Health Policy Directive POD = Print On Demand HSS = Health Support MHOAT = Mental Health Outcomes Assessment Tool 4.4 Appendices Appendix 1 - Forms Committee Process and Procedure

a – State Health Care Record Form Process – New Form Process b – State Health Care Record Form Process – Targeted Form standardisation

Appendix 2 - Health Forms Design Appendix 3 - State Forms Templates Appendix 4 - State Health Care Record Cover Artwork Appendix 5 - Terminal Digit Colours for Health Care Record Covers Appendix 6 - Strip Colours and Patterns Appendix 7 - NSW Health State Health Record Form Design Checklist

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http://www.health.nsw.gov.au/policies/pd/2008/PD2008_052.html















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2.8 Maintenance Contracts for Accounting, Office and Testing Machines, Micro-Computers, Photographic, Electronic, Audio Visual and Miscellaneous Equipment

Depending on the type of equipment involved it may be necessary to enter into a maintenance contract to ensure the continued operation of the equipment. Maintenance contracts may be arranged subject to: • there being no existing contract arranged by the State Contracts Control Board covering the

maintenance of the equipment concerned; • expiration of the warranty period; • the maintenance charge not exceeding the purchase cost of new equipment which performs a

similar function or supersedes the existing equipment. • where any increase sought during the currency of the agreement appears excessive, the matter is to

be referred to the Department of Commerce (State Procurement) for investigation; • the maintenance charge not exceeding ten per cent (10%) of either the replacement value of the

equipment or the original purchase price plus subsequent Consumer Price Index increases. In any case the charge shall not exceed those rates being charged for identical components and maintenance services at other installations in Australia;

• at all times it being ensured that the selected firm is the most appropriate and economical source of

supply. 2.9 Policy Directive on the Acquisition of Corporate Application Systems

(Prem. Circ. 99-35) (Government Selected Application Systems: GSAS)

2.9.1 Summary The GSAS program provides a limited choice of ‘best of breed’ software packages for corporate applications. All agencies are required to use GSAS selected packages for applications covered by the program. The overall goal of the program is to reduce the variety of software used in the public sector and gain the advantages that flow from this. Plans for applications in the GSAS program should be established in agencies’ IM&T Strategic Plans. This Circular replaces an earlier one but does not represent an overall change of policy. 2.9.2 Background One of the core strategies in the State’s 1997 Information Management & Technology Blueprint ‘A well-connected future’ was to make the Government a smart acquirer of Information Management & Technologies (IM&T). The GSAS program is one of the vehicles for this. An independent review of the program has confirmed that it is delivering benefits to the government. One or more GSAS products are used in 85% of budget sector agencies and 80% of 169 agencies of all types.


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It is estimated that the savings from the program total about $25 million across government. These savings come from the elimination of the costs of tender processes by agencies, reduced software licence fees and lower maintenance charges from the government’s purchasing power. The following applications are in the GSAS program: • Human Resource & Payroll Management. • Financial Management. • Records Management. • Electronic Mail. • Library Management • Integrated Management (combining HR/Payroll, financial and other enterprise-wide functions) Property Management will be added in 1999, other applications may be added in the future. 2.9.3 Policy All NSW Government ag encies are to o btain th e benefits of th e GSAS pro gram for th e acq uisition of new, re placement, upg raded or e nhanced a pplication so ftware is required a nd th e ap plication is in th e program. The use of GSAS products is mandatory for all agencies except State Owned Corporations who are strongly encouraged to use them. GSAS products are to be used when the GSAS application provides a substantial part of the agency’s functional requirement. If at least 60% of the functional requirement can be satisfied by a GSAS application then an exemption must be sought before acquiring a package that is not a GSAS product. Intentions regarding GSAS applications must be covered in IM&T Strategic Plans. It is recognised that there may be circumstances when an agency needs to adopt or continue using a package for a GSAS application from outside the product range. Before starting such acquisitions an agency required to use GSAS must request an exemption for that application. Such requests must be accompanied by a business case, with life-cycle costs, justifying the non-GSAS acquisition. They must be signed by the Chief Executive. State Owned Corporations are requested to advise their reasons for not using GSAS. Requests and advice are to be submitted to the Office of Information Technology within the Department of Commerce. 2.9.4 How to use GSAS Full details about the program are in IM&T Guidelines published by the Office of Information Technology and available from their web site. The Information Technology Supply of the Department of Commerce is responsible for the day to day operation of the program. Since GSAS products are provided under common use Agreements between the vendors and the State Contracts Control Board, an agency need only select from the limited choice of products and agree an Official Order (Contract).

CHAPTER 2 – SIMPLE PROCUREMENT 2.13 Further Information Enquiries concerning the purchase of packages and concerning exemptions from GSAS or GSAS policy should be directed to:-

The Executive Director Office of Information Technology Department of Commerce Phone (02) 9228 3500 More information at http://www.oict.nsw.gov.au/content/2.2.11.gsas.asp

2.10 Purchasing Under State Government Contracts Exemption Applications (PD2005_093) Policies and procedures applicable to purchasing in the NSW Public Health system are set out in this Manual. A major component of the policy is that where goods and services are available under contracts arranged by the State Contracts Control Board they should be acquired by public health organisations from that source. At times problems may be experienced with products or services, and public health organisations should have protocols in place to remedy the situation. Where it is considered that the only solution is exemption from the use of the contract, a submission may be made to the Department of Health to this effect. Details of the procedures are as follows. 2.10.1 Exemption Procedure

In recent times there has been significant improvement in the way State Contracts are arranged and managed by the State Procurement. This is due to a number of factors including the establishment of NSW Health Procurement and the involvement of clinicians in the process. Clinicians and other health end users now have the opportunity of being involved in the determination of tenders by serving on Contract Advisory Groups. Industry groups such as the Patient Care Technology Group also play an important role in developing specifications, evaluating products offered and determining the most suitable suppliers for contracts. As a result of these measures products on State Contracts are systematically and professionally evaluated making it unnecessary in most instances for hospitals to undertake independent evaluations or to use suppliers who are not on State Contracts. By using non-contract suppliers where State Contracts exist, hospitals would be contravening policy directives contained in the Purchasing & Supply Manual issued by the NSW Health Department (Chapter 1 - Purchasing Procedures). In addition, such action may raise probity issues that contravene the ICAC guidelines on the code of conduct for public officials, particularly if site specific supplier preference is encouraged without compelling reasons.

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The NSW Health Department and NSW Health Procurement recognise that: (a) State Contracts are arranged so as to provide the best value for money on a statewide basis and

in this context Areas are advised that to not purchase from the contracts because better prices or conditions exist locally is not a valid justification for deviation from the contracts; and

(b) There may be rare instances where exemptions are required for reasons attributed to a specific

technical/clinical need, unsuitable conditions of contract, level of performance or as a result of an unresolved dispute.

Details of the procedure leading to the submission of an exemption application are indicated hereunder. Depending upon the complexity of the issue, the time taken for each stage should approximate two weeks. Stage 1 – The first stage of the process involves interaction between the hospital user and the contract supplier. Internal procedures in place in Hospitals and public health organisations in regard to products complaints need to be followed up before further escalation. It is expected that most complaints would be resolved at this stage and would not be escalated to Stage 2. Stage 2 - In instances where a satisfactory outcome has not been achieved in Stage 1, the hospital user should communicate the problem to State Procurement. The issue will be escalated to Stage 3 only if State Procurement is not in a position to resolve it in conjunction with the hospital user and the contract supplier.

Stage 3 - If the hospital user has not had a satisfactory outcome to the problem at Stage 2, a formal application for an exemption from the State Contract should be submitted to NSW Health Procurement (HP) on the prescribed form (appended) found in the HP intranet site. The Council will discuss with those involved and the relevant Contract Management Committee in an attempt to resolve the problem. The issue will be escalated to Stage 4 if the only resolution possible is an exemption from the Contract.

Stage 4 - NSW Health Procurement will endorse the exemption application from the hospital user and forward it to the NSW Health Department. Exemption approval or denial will be conveyed directly to the hospital user by the NSW Health Department under advice to NSW Health Procurement and the State Procurement, through the HQRS. 2.10.2 Further Considerations

Exemptions from the use of specific common period contracts may be granted by the NSW Health Department upon the recommendation of NSW Health Procurement. The duration of the exemption will be indicated at the time that the exemption is approved. It should be noted that: a. Exemptions are granted only on rare occasions; b. In instances where exemptions are granted, the purchasing procedure outlined in the Purchasing

& Supply Manual issued by the NSW Health Department with regard to quotations\tenders should be strictly adhered to; and

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CHAPTER 2 – SIMPLE PROCUREMENT 2.15 c. If an exemption is being sought for reasons such as incompatibility with existing equipment

and/or user protocols, the application from the hospital should be accompanied by costings of the alternate products that are to be used.

2.10.3 Lodgment of Applications for Exemptions Applications for exemptions are to be submitted to the Chief Executive of NSW Health Peak Purchasing Council. To improve efficiency in the exemption process, the paper-based system has been replaced by a secure on-line system, as part of the Health Quality Reporting Systems (HQRS). The online system not only expedites the process, but also makes the information available to all stakeholders in real time, i.e. status of application. Although there is a shift into automation, applicants still need to follow proper delegation and approval procedures. The system has an installed check and balances procedures that will help the user adhere to the exemption guidelines.

Application for exemptions entered onto the HQRS are electronically submitted to Authorised Public Health Organisation approvers. Approvers may approve or reject applications, if approved the application is forwarded to the HP Procurement and Contracts team for processing. See Appendix 2-A for details of the web-based exemption form.

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Appendix 2-A Data Entry form


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Notes and Attachment form

Log form


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Outcome form

Reporter’s Details form


Appendix 2-B STATE CONTRACTS CONTROL BOARD How to find out if an item or service is “on contract” Detailed information on goods and services on contract is available from the NSW Buy website www.nswbuy.com.au or by telephoning NSW Buy on 1800 NSW BUY (679 289). Registered users can also search and browse in contract goods and services on smartbuy® www.smartbuy.nsw.gov.au How to participate in the development of the contracts The development of period contracts is a co-operative undertaking. To ensure that the items in contracts reflect the needs of agencies, the State Contracts Control Board invites representatives of agencies to participate on Contract Management Committees alongside specialists. Members of the committees participate in the development of specifications and the selection of the successful tenderers. Nominees for Health related contracts are called for by NSW Health Procurement. (For further information contact (02) 9887-5490.) Any problems with the contracts should be reported to State Procurement or the Information Technology Service. Placing of Orders All health specific contracts of the SCCB are “free into store” and public health organisations should not be paying freight/cartage or associated costs. Orders for in contract items are to be made directly on the contractor using the appropriate order form. To ensure that the appropriate price and full benefits of the contracts are received, health organisations should identify themselves as a client of the State Contracts Control Board and quote the appropriate contract number wherever possible. When orders are prepared it should be ensured that delivery dates are nominated, consignment details are advised, discount amounts are entered, the quoted or estimated price is shown, whether the price includes FIS, FOB etc. and that Authorising Officers' signatures have been obtained. The following terms are used in regard to deliveries of stores: FOR - free on rail (free delivery to nearest station - station is specified) FOB - free on board (free delivery to nearest port) FIS - free into store PREPAID FREIGHT - the supplier is requested to pay for freight and add the charge to the invoice FREIGHT ON - the supplier is requested to advise the courier or delivery form to charge the receiver Areas should pay particular attention to notifications from State Procurement regarding changes in contractors, so that purchases do not continue to be made from a supplier who is no longer a contractor.

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If State Procurement does not notify areas of amended contracts in time to place orders, orders placed on pre-existing contracts shall be paid at the rate claimed less any discounts applicable under the expired contract. Should the pre-existing contractor refuse supply, areas may purchase stores and services for short term needs to best advantage, until details of the new contract are received. The Director, State Procurement shall, as far as practicable, prior to the date of commencement of any original or new contract, notify the Department concerned of any such contract and of any subsequent variation of the contract. EQUIPMENT AVAILABLE FROM ELECTRO-MEDICAL PERIOD CONTRACTS The following equipment is available on Period Contracts. Please contact the Electro-Medical Unit (02) 9372 8148 for the latest information on Period Contracts, prices and conditions of contract should you become serious in purchasing equipment. Alternatively you can approach the supplier for period contract pricing and equipment information and place an order direct on the supplier by quoting the period contract no.


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Appendix 2-C EVALUATION OF CLINICAL CONSUMABLES & EQUIPMENT

Prior to a Public Health Organisation accepting the use of clinical consumables or clinical equipment, as proposed by prospective Suppliers or as requested by any Public Health Organisation staff, a rigorous product presentation and evaluation process is to be completed. To assist Public Health Organisation in the process, NSW Health Procurement developed the Clinical Consumables Evaluation Database and the Clinical Equipment Evaluation Database. These systems enable Public Health Organisations to: 1. Initiate the evaluation tracking and reporting process by registering a proposed evaluation onto

the abovementioned databases. It is essential that a pre-agreement with a Supplier is established prior to the registration of an evaluation.

2. Enable a Supplier to submit product presentation information required prior to the

commencement of the agreed evaluation. This is done through a dedicated HP Website called the Supplier Product Presentation Web Form for Suppliers. The Web Form replaces the Product Presentation hard copy forms given to Suppliers to complete.

3. Enable product presentation data as submitted by the Suppliers per point 2 to automatically

populated appropriate sections of the database. This triggers an email to the initiator of the process enabling the evaluation to commence.

4. Enable appropriate expertise such as Infection Control, OH&S, Biomedical Engineering &

Clinical Product Management to collaboratively work together and assist in the evaluation of a product.

5. Enable Public Health Organisations – Product Evaluation Committees ensure that all

requirements relating to the selection of Clinical Consumables and/or Clinical Equipment are taken into consideration in product selection.

6. Access product evaluation information from other Public Health Organisations. This

information may be utilised as reference to support any further evaluation or as the basis for further discussion with local users.

HP SYSTEMS & DATABASE CONDITIONS OF USE

The use of all HP Systems and databases are subject to specific conditions of use. “Authorised

Public Health Organisation Users” agree to abide by the following conditions: 1. Database evaluations registered onto the system are entered as a form of “Health Service

records keeping” and “information sharing”. 2. Health Services viewing other Health Services evaluations do so as a guide/reference only and

is not to be used as the sole reason to award or not award a contractor/supplier. 3. Health Services acknowledge that item evaluation criteria used by other Health Services might

not be consistent with their own evaluation criteria. This in effect supports conditions as stipulated in point 2.

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CHAPTER 2 – SIMPLE PROCUREMENT 2.24 4. Prospective tenderers/suppliers of clinical consumables/clinical equipment for evaluations are

to be advised by the Health Service that evaluation details are to be entered onto the statewide system, that is accessible by all Health Services subject to conditions as stipulated in point 2.

USER ACCREDITATION - HP SYSTEMS & DATABASES

The HP requires all Public Health Organisation authorised users of the following HP systems to

complete an accreditation training as provided by the HP. This ensures that prior to the allocation of user ID’s and passwords, all users are aware of their duties and responsibilities when entering and submitting reports, and when accessing and analysing information entered by other Public Health Organisations. The training sessions also equip each user with the necessary skills that will assist them in obtaining maximum benefit from the use of each system. • Clinical Consumables Evaluation Database • Clinical Equipment Evaluation Database • Health Quality Reporting System • Tenders & Contracts Database • Electronic Tendering System • TenderMax – Tender Preparation Evaluation System • BBS for surplus consumables & Equipment

All of the above systems are located at http://internal.health.nsw.gov.au/business/hp Specificity of Information Supplementary to point 3 – Certified users should acknowledge that events or activities that led to the report being entered on onto the above system, might be directly relevant to specific Health Service environments or to the specific use of the product. These factors may or may not be consistent in other sites. This in effect supports conditions as stipulated in point 2. Confidentiality Information entered onto the above database is confidential and specific for internal NSW Health use only. Users are to ensure that they take reasonable care when forwarding extracted information to other Health Service staff, i.e. ensure the recipients are aware of the conditions stipulated on this document.

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HEALTH QUALITY REPORTING SYSTEM – SCCB CONTRACT EXEMPTIONS – VENDOR PERFORMANCE & RISK MANAGEMENT (IB2007_039) This Information Bulletin is to be read in conjunction with the Purchasing and Supply Manual’s: • Chapter 2 - Simple Procurement, specifically Section 2.10 - State Government Contract

Exemptions; and • Chapter 7 - Receipt, Custody and Delivery of Stores, specifically Section 7.21 – Reporting.

This Information Bulletin applies to all clinicians and biomedical engineers of all public health organisations, except the Department of Health. Full compliance is required. What is the Health Quality Reporting System (HQRS)? The Health Quality Reporting System (HQRS) is a secure statewide system that enables reporting of quality issues for clinical goods, equipment or services purchased by Health Services. The HQRS was established to: • identify, document and alert all Health Services of clinical product quality issues and risks for

immediate management; • ensure that there is a consolidated quality reporting system to allow the performance of vendors

to be effectively managed; • provide the basis for managing the granting of exemptions from the requirement to use State

Contracts. The HQRS is accessible through the gateway to Health Procurement Systems at http://internal.health.nsw.gov.au/business/hp/. What HQRS is not While HQRS have some similarities with another quality reporting system – the Incident Information Management System (IIMS), they are not integrated. The IIMS was established to identify, track and manage clinical, workforce and corporate incidents across the public health system, while HQRS has a focus on issues surrounding the quality and appropriateness of the performance of goods and equipment. On some occasions it may be necessary to complete both IIMS and HQRS reports. How is HQRS useful? The HQRS is an essential tool for vendor performance management and SCCB contract exemptions. A. Vendor Management Information reported in the HQRS is shared amongst authorised users across the NSW Health system to raise awareness of performance issues that have arisen. It also serves as a mechanism to escalate product performance issues to ensure risks are adequately managed: 1. Supplier – as the first escalation level, to resolve contract and product issues directly by Area

Health Service officers. 2. Office of NSW Procurement, Department of Commerce – for escalated issues resolution of

SCCB contract items after attempts to satisfactorily address the matter with the supplier.

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3. Health Procurement (HealthSupport) – for escalation of unresolved issues after 1 & 2 above. 4. Therapeutic Goods Administration (TGA) – the TGA is not part of the escalation process.

Issues forwarded to the TGA are those determined as in contravention of the Therapeutic Goods Act 1989.

Product issues and incidents reported on the HQRS receive immediate attention by the suppliers due to its statewide transparency. Advice on issues resolution is accessible to all health system users in real time. B. SCCB Contract Exemption Exemptions are granted only in rare and exceptional circumstances. Detailed procedures in Chapter 2, section 2.10 of the Purchasing and Supply Manual must be followed. For SCCB contract exemptions, a similar escalation process is followed:

1. Supplier – first stage of product issue resolution. 2. Office of NSW Procurement, Department of Commerce – second stage of product complaints

resolution if it is not satisfactorily addressed between the Area Health Service user and supplier. 3. HQRS – third stage of resolution through a formal lodgement of application for exemption from

the SCCB contract. HQRS contains the prescribed electronic form that allows the information to be accessed and actioned by Health Procurement. After consideration of the exemption request by Health Procurement and/or NSW Department of Health, the outcome is entered back into the HQRS for immediate access by all system users, and will be a permanent record for audit purposes.

Tracking of SCCB contract exemptions allows each Area Health Service user to understand the unique circumstances taken into account when granting exemptions. This information can be used in making informed decisions when a similar problem occurs. For strategic management, historical information on SCCB contract exemptions is used by Health Procurement and NSW Department of Health to manage contracts and the renewal process. Management of the HQRS Health Procurement manages the system, training and certification of users and allocation of access codes. They also manage flow of information to the appropriate agencies and their response times through entries monitoring. The Procurement and Contract Services Unit of NSW Department of Health monitors compliance to the policy set out in the Purchasing and Supply Manual. Access to HQRS Access to HQRS is restricted to authorised users only who are members of the Clinical Product Manager’s Group, or the Clinical Equipment Procurement Network. Authorised users understand the duty of care to be exercised when adding information to the system or using information from the system. Non-members of the authorised groups are encouraged to have their contribution of promptly reporting incidents and issues by contacting the relevant authorised user in their area. Lists are attached in Appendices A & B. New members who have not yet been given access and training must contact Health Procurement’s Steve Woodall on 02 8644 2018 or Email: [email protected]

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APPENDIX A - CLINICAL PRODUCT MANAGERS’ GROUP Alexander, Trish Clinical Product Advisor Hunter New England AHS T: 02 6767 8074 A: PO Box 9783, Tamworth NEMSC 2348 E: [email protected]

Murray, Bernadine (Deputy Chairperson) Area Product Manager Northern Sydney & Central Coast AHS T: 02 4320 2147 / M: 0417 031249 A: PO Box 361, Gosford 2250 E: [email protected]

Birrell, Merrilyne Infection Control Greater Western AHS T: 08 8080 1370 E: [email protected]

O’Hara, Cathy Area Supply Services Sydney West AHS T: 02 9845-7560 A: PO Box 533, Wentworthville 2145 E: [email protected]

Cane, Denise Clinical Product Manager Sydney West AHS T: 02 9845 7543 A: PO Box 533, Wentworthville 2145 E: [email protected]

Patrick, Clive Clinical Resource Manager Sydney South West AHS T: 02 9828 6356 E: [email protected]

Deeley, Mark Medical Equipment Manager Ambulance Service of NSW T: 02 9320 7620 / M: 0421 029 429 E: [email protected]

Rutledge, Faye Clinical Product Manager Greater Southern AHS T: 02 6933 8031 E: [email protected]

Grey, Cathy Senior Nurse Manager South Eastern Sydney & Illawarra AHS T: 02 9540-7731 / M: 0404 024359 A: Locked Bag No 10, Taren Point Delivery Centre, Caringbah E: [email protected]

Scahill, Stan

Dept. of Biomedical Engineering, Liverpool Hospital-SSWAHS CEPN Representative T: 02 9828 6490 E: [email protected]

Hardy, Leonie Clinical Product Nurse Sydney West AHS T: 02 9845 7438 A: PO Box 533, Wentworthville 2145 E: [email protected]

Shepherd, Lyn (Chairperson) Products Manager Hunter New England AHS T: 02 4941 4506 E: [email protected]

Hopwood, Janelle A/Clinical Products Manager Greater Southern AHS T: 02 6933 8036 A: PO Box 8546 Kooringal NSW 2650 E: [email protected]

Skaines, Marcia Area Clinical Product Manager North Coast Area Health Service T: 02 66 255 703 / M: 0413 018 528 E: [email protected]

Lees, Chris Project Officer - Clinical Services Ambulance Service NSW T: 9320 7877 / M: 0422 003 366 E: [email protected]

Sullivan, Margaret Area Clinical Product Manager Sydney South West AHS T: 02 9757 8005 / M: 0407 661528 A: PO Box 7060, Wetherill Park 2164 E: [email protected]

Leonard, Alan Senior Nurse Manager South Eastern Sydney & Illawarra AHS T: 02 4285 2583 / M: 0407 725008 A: Fernhill Place, 469 – 471 Prince’s Highway, Fairy Meadow 2519 E: [email protected]

Taylor, Anne Infection Control Consultant Greater Western AHS T: 02 6885 8787 E: [email protected]

Mackaway, Leica Area Clinical Product & Procurement Manager Sydney West AHS T: 02 4734 2034 A: PO Box 63, Penrith 2751 E: [email protected]

Winters, Stephen Clinical Products Coordinator Children’s Hospital Westmead T: 02 9845 3640 A: PO Box 4001, Westmead 2145 E: [email protected]

McKinlay – Hogan, Helen Clinical Products Manager South Eastern Sydney & Illawarra AHS T: 02 9540 7990 E: [email protected]

Bulaon, Valentino Data & Catalogue Manager, Health Procurement Health Support T: 02 8664 2051 E: [email protected]

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APPENDIX B - CLINICAL EQUIPMENT PROCUREMENT NETWORK

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Allen, Mal Manager Bio-Medical Greater Southern AHS T: 02 4827 3220 E: [email protected]

Meshram, Latish Senior Project Officer - Clinical Asset & Contract Services Branch, NSW Health Department T: 02 9391 9215 E: [email protected]

Deeley, Mark Medical Equipment Manager Ambulance Service of NSW T: 02 9320 7620 / M: 0421 029 429 E: [email protected]

Morrison, Bruce Director of Biomedical Engineering Hunter New England AHS T: 02 4921 3150 / M: 0418 476 385 E: [email protected]

Devasagayam, Jonathan Director of Biomedical Engineering South Eastern Sydney & Illawarra AHS T: 02 9350 3382 E: [email protected]

O'Meley, Patrick Area Director, Biomedical Engineering SSWAHS T: 02 9515 8089 E: [email protected]

Jones, Linda Procurement Officer Sydney South West AHS T: 02 9515 4819 E: [email protected]

Pavan, Camillo (Deputy Chairperson) Senior Biomedical Engineer South Eastern Sydney & Illawarra AHS T: 02 9382 2783 E: [email protected]

Lobsey, Ray Manager - Dubbo Biomedical Engineering Greater Western Area Health Service Ph: 02 68858773 / 02 68857919 (for teleconference calls) E: [email protected]

Scahill, Stan (Chairperson) Dept. of Biomedical Engineering, Liverpool Hosp. Sydney South West AHS T: 02 9828 6490 E: [email protected]

McCauley, James Head of Biomedical Engineering Children’s Hospital Westmead T: 02 9845 2586 E: [email protected]

Sullivan, Margaret Clinical Product Manager – Sydney South West AHS CPMG Representative T: 02 9757 8005 E: [email protected]

McKinnon, Darren Biomedical Engineer Children’s Hospital Westmead (Alternate) T: 02 9845 2595 E: [email protected]

Walton, Craig Consultant, Biomedical Engineering Northern Sydney & Central Coast AHS T: 02 9926 8958 E: [email protected]

McLennan, Michael Title North Coast AHS T: 02 6656 7579 E: [email protected]

Bulaon, Valentino Data & Catalogue Manager, Health Procurement Health Support T: 02 8664 2051 E: [email protected]

TABLE OF CONTENTS

CHAPTER 3 - COMPLEX PROCUREMENT (TENDERING)

3.1 INTRODUCTION AND PROJECT MANAGEMENT...................................... 3.1 3.1.1 Gateway Reviews and Business Cases..................................................................... 3.1 3.1.2 Procurement Management Control........................................................................... 3.2 3.1.3 Checklists ................................................................................................................. 3.3 3.1.4 Probity ...................................................................................................................... 3 .3 3.2 PROCUREMENT STRATEGY ........................................................................... 3.3 3.2.1 Product Evaluation ................................................................................................... 3.3 3.2.2 Tender Method ......................................................................................................... 3.4 3.2.3 Expression of Interest & Selective Tendering.......................................................... 3.4 3.2.4 Types of Expressions of Interest .............................................................................. 3.5 3.2.5 Tender Networking................................................................................................... 3.6 3.2.6 Procurement Plan and Evaluation Criteria ............................................................... 3.7 3.2.7 Contract Periods ....................................................................................................... 3.8 3.2.8 Procurem ent Plan Approval ..................................................................................... 3.8 3.3 DOCUMENTATION ............................................................................................. 3.9 3.3.1 Request for (RFT) Documents ................................................................................. 3.9 3.3.2 Sections of the Standard RFT................................................................................... 3.10 3.3.3 Preparation of RFT using “Preparation/Evaluation Software”................................. 3.12 3.3.4 Tender Evaluation Plan – Preparation...................................................................... 3.12 3.3.5 Selecti on Criteria...................................................................................................... 3.13 3.3.6 Review of RFT ......................................................................................................... 3.13 3.4 ADVERTISING TENDERS.................................................................................. 3.14 3.4.1 Advertisement .......................................................................................................... 3.14 3.4.2 Tender Invitation ...................................................................................................... 3.15 3.4.3 Tender Briefings & Clarification.............................................................................. 3.16 3.4.4 Electronic Tendering ................................................................................................ 3.16 3.4.5 Electronic Tendering – Security............................................................................... 3.17 3.4.6 Electronic Tendering – System Outage.................................................................... 3.17 3.4.7 Recording of RFT Recipients................................................................................... 3.18 3.4.8 Amendments to RFT Documents ............................................................................. 3.18 3.4.9 Meetings with Tenderers .......................................................................................... 3.18 3.5 RECEIVING AND OPENING OF TENDERS ................................................... 3.19 3.5.1 Electronic Tendering (E-Tendering) – Lodgement & Receipt ................................. 3.19 3.5.2 Receipt of Tender ..................................................................................................... 3.20 3.5.3 Tender Box............................................................................................................... 3.20 3.5.4 Tender Opening & the Tender Opening Committee ................................................ 3.20 3.5.5 Late Tenders ............................................................................................................. 3.22 3.5.6 Alteration to Tender Submission After Receipt ....................................................... 3.22 3.5.7 Clarification of Tenderer’s Information ................................................................... 3.22

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3.6 TENDER EVALUATION ..................................................................................... 3.23 3.6.1 Evaluation Procedures.............................................................................................. 3.23 3.6.2 Negotiations ............................................................................................................. 3.25 3.6.3 Alternative Tenders .................................................................................................. 3.25 3.6.4 Review Process......................................................................................................... 3.26 3.6.5 Evaluation Report & Recommendations .................................................................. 3.26 3.7 AWARDING THE CONTRACT.......................................................................... 3.27 3.7.1 Approval ................................................................................................................... 3.27 3.7.2 Letter of Acceptance ................................................................................................ 3.28 3.7.3 Advice to Unsuccessful Tenderers ........................................................................... 3.28 3.7.4 Public Disclosure of Information Arising from NSW Health Tenders .................... 3.29 3.8 CONTRACT MANAGEMENT............................................................................ 3.32.6 3.8.1 Contract Manager ..................................................................................................... 3.32.6 3.8.2 Ensuring Accountability and Record Keeping ......................................................... 3.33 3.8.3 Central Tender & Contract Database ....................................................................... 3.33 3.8.4 Resolving Issues ....................................................................................................... 3.34 3.8.5 Service Provider Performance.................................................................................. 3.34 3.8.6 Operation .................................................................................................................. 3.3 5 3.8.7 Variation after the Contract has Commenced .......................................................... 3.36 3.8.8 National Product Catalogue...................................................................................... 3.36 APPENDICES: 3-A Gateway Review Process............................................................................................. 3.37 3-B Purchasing Policies...................................................................................................... 3.41 3-C Better Practice Guidelines for Including Health and Safety in the Engagement Management and Evaluation of Contractors in Health Services ............ 3.49 3-D Contract Documentation Checklist.............................................................................. 3.62 3-E Permit to Work Procedures.......................................................................................... 3.63 3-F Piggy Back Provisions................................................................................................. 3.65 3-G Checklist 3 for Procurement $30,000 to $250,000 DoH ............................................. 3.66 3-H Checklist 4 for Procurement $30,000 to $250,000 Health Services ............................ 3.68 3-I Checklist 5 for Procurement $250,000 to $10M DoH................................................. 3.70 3-J Checklist 6 for Procurement $250,000 to $10M Health Services ............................... 3.72 3-K Checklist 7 for Procurement Over $10M DoH............................................................ 3.74 3-L Checklist 8 for Procurement Over $10M Health Services .......................................... 3.76 3-M Checklist 9 for Procurement Under $30,000 DoH ...................................................... 3.78 3-N Contract DoH up to $200,000...................................................................................... 3.79 3-O Procurem ent Notification Form................................................................................... 3.93

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.1 3.1 INTRODUCTION AND PROCUREMENT MANAGEMENT

“Complex procurement” refers to procurement of goods and services where the item being purchased is not available from contracts arranged by the State Contracts Control Board is over $250,000 in total value (including period contracts). The total value, including GST, applies to total value of the contract over the full contract term, the purchase cost including whole of life costs. In this instance, the tendering process is to be undertaken. Incorporated in this section are the procedures to be followed when purchasing goods and services/works that falls under the category “complex procurement”.

See Consultancy Section for different $ levels from when tenders required. Further Considerations: All officers are to be aware of the provisions of Chapter 1 “INTRODUCTION” prior to procuring items or services as “NOT-IN-CONTRACT”. The NSW Government Procurement Policy – issued by the New South Wales Treasury July 2004 is to be adhered to with special note being made of the “Standards of Behaviour” at Appendix 1-B of Chapter 1 that all parties are required to follow. It is to be noted that the “Preference” element of the Policy applies to all purchases, not just tenders. The NSW Government Preference Scheme is detailed in Appendix 3-B. A large proportion of public health organisations have adopted electronic tendering through the utilisation of a web-based central gateway for the electronic exchange of tender documents [Tender advertising and receipt of responses]. The use of tender preparation & evaluation software has also commenced in some public health organisations to fully automate the process. Where possible, information that covers these new elements of tendering has been added to this chapter. 3.1.1 Gateway Reviews and Business Cases Specific additional requirements exist in respect to: • Projects where the capital value exceeds $500,000 (assets such as equipment, building

equipment, software programs etc) and for initiatives submitted to the Department or Treasury for approval and/or funding. In these situations it is required that a “business case” be completed. Business Case Guidelines, which provide a “how to” resource to develop a business case can be found at http://www.premiers.nsw.gov.au

• High risk procurements or all other procurements valued at $10 million ($5 million ICT) or

more will require a Gateway Review that is an independent assessment applied at key decision points in the procurement process. A review at the Business Case Gate must be carried out on all high risk projects and projects over $10 million. Appendix 3-A provides an overview of the process.

• A risk profile assessment is to be used for all procurements over $1 million and for those

procurements that due to their nature could be considered a possible “high risk” to determine whether they are a “high risk” wherein the Gateway Review Process is required. If a procurement is considered “low” or “medium” risk either an independent in-house or independent internal/external review is required. Those procurements categorised as “high risk” require an external independent review. The Risk Profile Assessment tool is to be used to determine levels of risk and this can be located at http://www.smarterbuying.nsw.gov.au/gateway/

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.2 3.1.2 Procurement Management Control Strategic Procurement and Business Development (SP&BD)’ Procurement Advisory Service (SP&BD) Unit is accountable in providing procurement and probity advice to help control the risks of major procurement across the NSW Health System. To enforce monitoring, an early notification of intended procurement is necessary. The Procurement Notification Form in Appendix 3-O must be filled out and submitted to Procurement Advisory Service (SP&BD) once a plan to tender over $250,000 is approved. To provide a procurement and advisory control over major procurements across the NSW Health system. Additional requirements are specified hereunder: Projects Over $10 million are to be managed by Strategic Procurement and Business Development (SP&BD) • Public health organisations, Ambulance Service and Department of Health are required to advise the

Strategic Procurement and Business Development (SP&BD) of the Department of the proposed procurement of any goods and services, including consultants.

• SP&BD will be the procurement sponsor and chair the Project Steering Committee. • Client CE’s and advisers will be represented on the Steering Committee. • Project will be handed over to the client on completion. Who will undertake procurement processes such as specification development, tendering etc is to be determined by the Steering Committee. Projects $1 million and under $10 million • Client CE is project sponsor and chairs Steering Committee; • SP&BD is to be represented on the Steering Committee; • SP&BD is accountable for procurement and probity advice (including selection and monitoring of such

providers); • SP&BD facilitates reviews and approvals required at specified milestones/gates; • Client is accountable and required to certify that all requirements and advice have been complied with at

specified “Gates” in the procurement process. The client is responsible for undertaking all procurement processes such as specification development, tendering etc. except where the Department determines otherwise. Procurements over $250,000 and under $1 million • Public health organisations and the Ambulance Service are to provide advice to the Strategic

Procurement and Business Development (SP&BD) Branch prior to any procurement over $250,000 and under $1 million where tendering is required.

• The Branches of the Department of Health are required to advise SP&BD prior to any procurement over

$150,000 where tendering is required. SP&BD will provide procurement and probity advice.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.3 3.1.3 Checklists It is mandatory that the Checklists as listed hereunder are completed for all NOT IN CONTRACT procurements. Procurement Checklists available include: For NSW Department of Health For Health Services Checklist 1 for Procurement of Consultants Appendix 5A

Checklist 2 for Procurement of Consultants Appendix 5B

Checklist 3 for Procurement $30,000 - $250,000 Appendix 3-G

Checklist 4 for Procurement $30,000 - $250,000 Appendix 3-H

Checklist 5 for Procurement $250,000 - $10M Appendix 3-I

Checklist 6 for Procurement $250,000 - $10M Appendix 3-J

Checklist 7 for Procurement over $10M Appendix 3-K

Checklist 8 for Procurement over $10M Appendix 3-L

Checklist 9 Engaging Contractor under $30,000 Appendix 3-M

3.1.4 Probity The advice of the Department of Health’s Strategic Procurement and Business Development (SP&BD) Branch is to be sought in relation to all contracts which fall outside of the purchasing policy. Probity advice is required to be obtained for contracts in excess of $30,000: i) which have not followed standard procurement processes; ii) where there could be potential or perceived conflicts of interest; iii) where there might be subsequent probity issues. Considering probity risks within overall project management is important to ensure that government projects are managed with transparency, fairness and in the public interest. Reference should be made to the November 2005 ICAC document “Probity and Probity Advising: Guidelines for Managing Public Sector Projects”. This publication was created to assist public sector organisations to understand, recognise and remedy probity risks for the better management of significant projects and managing relationships with contractors and external providers. Reference should also be made to Premier’s Memorandum 98-12 covering the use of probity auditors by Government agencies. 3.2 PROCUREMENT STRATEGY 3.2.1 Product Evaluation In most cases of clinical procurement, Area authorised officers who are either Clinical Product Managers or Biomedical Engineers evaluate the product (consumable or equipment). Well-defined stages are followed and evaluation results are centrally stored in the Clinical Consumables Evaluation Database or the Clinical Equipment Evaluation Database. Both databases are managed by NSW Health Procurement and can be accessed through the HP Gateway http://internal.health.nsw.gov.au/business/hp

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.4

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3.2.2 Tender Method It is important, when choosing the procurement method, that the way you choose to buy is fair, encourages competition and satisfies government procurement requirements and your agency’s procedures and delegations. Depending on the nature of the project, you may wish to have a single or multi-staged process. Tender methods may include: • Open tenders - Request for tenders (RFT) and anyone may submit a tender. • Selective tenders - Is the process of inviting tenders from pre-qualified prospective tenderers

without advertising, in most cases this will follow the calling of Invitation for Expressions or Interest [EOI].

• Pre-registered tenders - After an earlier EOI or request for proposal (RFP), a limited number of suppliers are invited to submit a tender

• Invited tenders - Generally used in emergency situations or for specialist goods and services where there are a limited number of suppliers known to exist.

• Direct negotiations - No tender is issued and a supplier is approached directly. When deciding which method consider the value, complexity and timing of the project and the extent to which an innovative approach is required. You should also take into consideration the impact the method will have on both you and potential suppliers in issuing, responding to and evaluating the process. The most common method used for goods and services contracts is an open tender process. If you are uncertain about what the organisation needs or what is available, an EOI or RFP might be a good option. As a rule, try to avoid direct negotiation, as it removes competition and makes value for money more difficult to demonstrate. [Refer to ICAC’s publication Direct Negotiations in Procurement and Disposals] Whichever method you choose document the reasons why. 3.2.3 Expressions of Interest & Selective Tendering Definitions Expression of Interest (EOI) – is the process of inviting prospective tenderers to forward their intention and capability to provide goods/services as described in general terms by the public health organisation with the intention to possibly call for costed tenders or quotations at a later date through the release of a more detailed specification. Selective tenders - A limited number of pre-qualified suppliers are invited to submit a tender. Procedures The officer with the appropriate financial delegation is to approve the invitation of EOI’s and the selective tender process. Valid reasons must exist and the delegated officer is to record the reasons for only inviting selective tenders. A minimum of three (3) selective tenders is to be invited, if all 3 they are available. Expressions of Interest may be called:


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• Where the requirements of the request can be met by various means and it is not possible to be sufficiently specific in relation to the information/documentation requested from potential contractors so as to facilitate final evaluation and decision; or

• For the purpose of establishing the available expertise in the market place and forming a panel of acceptable contractors for selective quotation or tender action in relation to future tasks requiring that expertise.

• Where there is liable to be a large number of firms likely to be interested or there is little reliable information about capable firms in the market, EOI’s are culled against selection criteria then detailed specifications are issued to short listed firms.

The advertisement and documentation must clearly indicate the action that could or will follow the Expression of Interest; otherwise subsequent selective quotation/tendering action may be precluded. Other than the advertising component all other tendering procedures as contained in this manual are to be complied with when undertaking selective tendering. When inviting expressions of interest or undertaking selective tenders tendering procedures as contained in this section are to be followed, eg. Tender box, tender opening, assessment etc. 3.2.4 Types of “Expressions of Interest” a) Inviting applications for pre-registration for contracts for a specific category or work

Lists of pre-qualified firms are an appropriate option when engaging contractors or consultants frequently for tasks within a specific field.

An open invitation is issued for prospective tenderers to express interest in bidding for particular categories of work such as architecture, constructions, environmental assessments, information technology or any definable activity. Firms, which best satisfy the published criteria are registered as pre-qualified firms.

The number of firms given pre-qualification status should be relevant to the amount of work available from the public health organisation. There is little point pre-qualifying many firms if only a few jobs will occur each year. To avoid that situation, the published criteria for pre-qualification should be sufficiently demanding or refined to limit the number of qualifying firms to those who best meet the needs of the organisation.

Invitations to tender for specific contracts are issued to all or some of the firms. Where invitations are restricted to a limited number of registered firms, the method of choosing firms to be issued with invitations should aim to provide all comparable firms with broadly similar opportunities to bid over a period of time.

The list of pre-qualified firms is maintained by periodic advertisement at least every three (3) years, by periodic review, by review for non-performing or non-responding firms and by being kept open for new registrants and previously rejected applicants. Also, there should be an express and ongoing obligation on registrants to continue to comply with the relevant criteria and to advise of any changes, which might affect their registration.

b) Inviting expressions of interest or pre-registration for a specific contract, followed by invitations

to short-listed firms


This method involves the issuing of an open invitation for prospective bidders to express interest in bidding for a particular contract. The respondents are then culled against selection criteria stated in the invitation. The short-listed respondents are then issued with a detailed specification and contractual information and invited to bid for the contract. Only persons and firms who applied for pre-registration or who submitted an expression of interest are considered.

This option is particularly suitable when: (a) a wide range of firms is likely to be interested and/or there is little reliable information about capable firms in the market, (b) the value of the work and/or the level of complexity is relatively high, and (c) the task to be performed is unusual for the organisation.

c) Inviting preliminary proposals or expressions of interest which contain proposals, followed by

invitations to short-listed firms

Some invitations to industry seek preliminary proposals and ideas, which are used as a basis for short-listing firms, along with other criteria such as expertise and experience.

In such cases the confidentiality of responses and the intellectual property of firms must be respected. This is particularly relevant where there may be a temptation to use an innovative idea of a firm in a specification for issue to other firms. It is desirable to declare any such intent so that the owner of the intellectual property rights can elect to grant a license to use the rights and to negotiate an appropriate fee and/or restrict the form of license. Legal advice should be sought before pursuing that option.

Requests for proposals are often called invitations for expressions of interest. It is preferable for the organisation to title processes in terms which literally reflect the intention of the organisation. Hence, if proposals are being sought, it is best for that to be reflected in the title. However, the titles used are less important than clear statements of intentions.

3.2.5 Tender Networking

Tender networking is the coordination of contracts between public health organisations to reduce duplication of effort, increase purchasing power and promote rationalization of products and suppliers. The main objective is to establish a “single tender specifications” for goods/services with the aim of maximizing opportunities. [The tender should only be for goods/services not covered under contracts organised via the State Contract Control Board by the Department of Commerce. To assist public health organisations, NSW Health Procurement created a document called “Tender Networking Guidelines” that is accessible via http://internal.health.nsw.gov.au/business/hp The guideline which support the “Smarter Buying for Government” policy and NSW Health policy on tender networking. Public health organisations should consider the co-ordination of contracts between several organisations. It is to be noted that tender networking may be established through the “Quadrangle” initiatives. Overall, this coordination will eliminate duplication of efforts and maximise the sharing of expertise in writing complex specifications. Further Considerations a) Approval - Approval/endorsement should be sought from each public health organisation

delegated authority [e.g. CE or Board of Directors] prior to initializing networking tenders with other public health organisations.

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b) Expression of Interest - Expression of interest to network any contract with other public health

organisation should be arranged via the public health organisation respective representative on the HP Tenders and Contracts Networking Group [TCNG].

c) Networking Partnership - Once expressions of interest are received, it is recommended that a

meeting with prospective networking partners be organised by the initiating public health organisation. A working party is then organised from the partnership through recruitment of member-representatives from each public health organisation. These representatives should have relevant expertise appropriate to the tender. The working party then establishes the “terms of reference” and strategies for the networking.

d) Cooperative Management - The tender networking party once established is to agree on the co-

operative management of the tender. This includes but is not limited to the following:

• Tender Specifications • Respective roles and Responsibilities • Cost sharing • Maintenance of Confidentiality • Probity and Ethics Considerations • Time Frames • Supplier Forum/Site Visits • Advertising • Documentation and Printing • Tender Fee and Other Relevant Tender Charges • Method of Tender Lodgement • Tender Opening Arrangement • Guidelines for Evaluation • Analysis and Methodology • Problem Resolution Mechanisms • Approval Arrangements for each public health organisation [NB. Each public health

organisation is each own legal entity] • Method of Awarding • Ongoing Contract Management and Administration • Contract Implementation Procedures

For more information on tender networking please obtain a copy of the “Tender Networking

Guidelines” available by contacting NSW Health Procurement or via the HP Website on the DoH Intranet on http://internal.health.nsw.gov.au/business/hp 3.2.6 Procurement Plan and Evaluation Criteria A procurement plan is a comprehensive document that outlines the stages of the project and how it will be managed. This should build upon any business case that has already been developed. When preparing tenders, public health organisations will need to address the evaluation criteria, which is the basis for evaluating tenders. The evaluation criteria, and possibly their key weightings, are to be finalised before tenders are called, and described in the tender documents. Collectively, evaluation criteria represent how value for money will be assessed and are likely to include technical merit, whole-of-life costs, foreseeable variations such as exchange rates/price increases, the tenderer’s experience, capacity, past performance and skill, and mandatory requirements such as licences, and compliance with Government and/or agency policy. Refer to NSW Government Code of Practice for Procurement.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.8 3.2.7 Contract Periods Tenders shall not be invited to cover a total potential period in excess of three (3) years without the express approval of the Director General or CE (or delegates) of the organisation, whose approval may be given in any particular case or class of cases. This clause does not cover extension of existing contracts. Contracts with a length of five years or more require Ministerial approval. Further Considerations Approval to Proceed with Tender - approving authority for tenders/quotations shall be the officer acting under delegation to incur expenditure [refer to more information in section 3.2.8]. It is important that officers concerned with approving recommendations have not been involved in the evaluation process. Terms of Tender Acceptance - The approving officer is not bound to accept any tender and may invite fresh tenders. The approving authority or officer so delegated may accept such tender as, in its opinion, is most advantageous to the health organisation, although the tender may not be the lowest received, but if a tender other than the lowest is accepted the reasons therefore shall be recorded. Departure from established procedures for purchasing of services should only be for sound, well-documented reasons. These reasons should be approved at a senior level by those not directly involved in the process. Some instances where fresh tenders may be considered appropriate are: • When no suitable tender has been received; • When no suitable tender has been received on time; • When delays in reaching a recommendation extended beyond the price validity period stated by

tenderer/s; • Inappropriate procedures or actions have occurred during the tender processes. Tenderers are to be advised, where appropriate, on the circumstances for recalling tenders. The fact that the tender of a preferred supplier or a tender offering a preferred item is received late is not generally an acceptable reason for inviting fresh tenders. 3.2.8 Procurement Plan Approval Approval should be sought for the Procurement Plan prior to proceeding. This will include confirming the availability of resources for managing the procurement process and the sufficiency of funding to complete the project. The public health organisation is to include in its Delegations Manual to whom the authority is vested to approve Procurement Plans and the incurring of the expenditure. Further consideration Under the Gateway Review Process a Procurement Strategy Review can be undertaken at the completion of this stage to confirm that the optimum procurement strategy is selected to deliver the project within its budget and time constraints. The review can also assess whether the project is ready to proceed to the tender stage.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.9 3.3 DOCUMENTATION Request for tender documentation should be complete so as to clearly reflect the procurement strategy. The Agency should also have regard to the costs of tender preparation and the estimated benefit of the tender method chosen. Tender documents considerations: • must provide details of the tender requirements, including methods of lodgement and format

preferences; • must provide specification of the goods or services required, that provide equal opportunity for

all potential tenderers to offer goods or services that satisfy the organisation’s needs; • must designate any supporting information required from tenderers; • must nominate a person for the provision of additional information and post tender feedback; • must identify the selection criteria on which the assessment of the tenders will be based; • must clearly define the contractual obligations of the parties; • must draw attention to any special conditions or obligations under the contract which depart

from the organisation’s normal practice; and • should provide positive encouragement to tenderers by allowing them the option, in addition to

submitting a conforming tender, to show how an alternative might offer better value for money. If, because of the nature of the specification, the preparation of tender documents involves a significant cost, the organisation should consider imposing a reasonable fee to help defray such cost and limit distribution to bona fide tenderers. The fee may be refundable to actual tenderers. A maximum fee of $200 plus GST is suggested, as deposits in excess of this figure may dissuade a competitive tenderer submitting an offer. If eTendering is available and used no fee is to apply. 3.3.1 Request For Tender (RFT) documents The RFT outlines the tender and contract objectives and requirements, with details of the roles and responsibilities of all parties. It needs to be a logical, clear and precise document and include all necessary information for the tenderer to understand the proposed tender process and contract and how the evaluation panel will select the tenderer offering best value for money. It is NSW Health policy for public health organisations to use standard tender documentation adapted to meet local requirements. To assist in the above directive, NSW Health Procurement (HP) established “generic documents” and “guidelines” for use by NSW public health organisations as follows:

• A Practical Guide to Tendering • Tender Networking Guidelines • Request for Tender – Goods • Request for Tender Services/Works (Minor) (under $250,000) • Request for Tender Services/Works (Major) (over $250,000) Copies of all of the above documents may be obtained by contacting HP or via the HP Website on the DoH Intranet site at http://internal.health.nsw.gov.au/business/hp

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.10 3.3.2 Sections of the Standard RFT: a) Section A - General Conditions of Tender – this section of the RFT explains the rules

governing the content and submission of tenders, the conduct of the tender process and the application of any relevant Government policies to the process.

b) Section B - General Conditions of Contract – this section of the RFT contains the clauses

that govern the agreement that is in place when a tenderer is awarded a contract. c) Section C - Special Conditions – this section of the RFT contains additional clauses that

govern the tender and the contract that is awarded to the winning tenderer. This section is in place to accommodate special requirements and exceptions that are covered or not covered by the General Conditions of Tender and the General Conditions of Contract sections.

d) Section D - Specifications of the requirements – this section of the RFT provides a detailed

description of the requirements of the goods/services/works as described in the tender document.

Preliminary considerations prior to drafting specifications:

The HP Tenders & Contracts Database was developed not only as a mandatory registry for public health organisation as a storage system for tenders & contracts documents. Prior to the writing of specifications, it is recommended that a database search be conducted to determine if specifications to be created already exist. This will save time and effort and eliminate the need to start from the beginning.

It is also recommended that a general email be sent to [email protected] to alert HP-TCNG members of the intention to write the specification, this is another way of checking if the specifications already exist in other sites.

The HP also maintains a database of other states tender advertisements and may assist in determining if specifications were already created by other states including New Zealand.

If the specification exists, the public health organisation [under NSW Health] is obliged to share the information with other public health organisation. Access to other states document may be requested via the HC contact in that state. Further Considerations

d.1) Specifications may be:

Functional - outlines the proposed function of the product (focus on what is to be achieved rather than how it is to be done.)

Performance - details the required performance characteristics including performance criteria.

Technical - details the physical description of the item required. This includes plans, designs and technical drawings.

Whichever you choose, there should be a clear description of the nature of the goods and services sought, and the outcomes expected by you (as the client). When preparing specifications, include enough information to allow tenderers to assess whether they have the capability and capacity to satisfy the requirements.

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Specifications need to be prepared in such a way as to encourage and promote competition, and not be limited to commercial or brand-specific attributes. Never include terms or words in the specification that identifies or is directly linked to a specific brand or supplier identity, use generic descriptors at all times.

d.2) In addition, when preparing specifications:

• Make the distinction between specified requirements that are mandatory and those that are desirable;

• Be cautious when seeking advice from the private sector in the framing of specification requirements. Avoid bias by making sure private sector consultation and input is balanced against later interests of a potential tenderer;

• Include other requirements such as warranty, maintenance, delivery or packaging, performance standards and performance measures;

• Use recognised industry terms and standards, include life cycle costs; and • State whether the requirement has to comply with a particular Australian Standard or

other standard/legislation. d.3) Specifications Prepared by Consultants - Consultants engaged by the organisation, especially in

construction projects are to be instructed that specifications should be drafted in such a way so as to provide for maximum use of goods manufactured in Australia or otherwise to promote local employment.

d.4) The following persons are not to be involved in the preparation of specifications:

• Employee of a supplier or prospective supplier; • Person who has vested interest in a supplier or prospective supplier; • Person who is not independent of a supplier or prospective supplier.

Industrial Supplies Office - The NSW Industry Capability Network exists to give free advice on the availability and efficiency of NSW and Australian suppliers and contractors. The office can be contacted at Suite 3, Century Plaza, 80 Berry Street, North Sydney, 2060. Telephone (02) 9025 3150 Email: [email protected]

e) Section E - Company Details and Tender Responses - this section of the RFT is a response

section that is intended for tenderers to complete and submit their company information as stipulated in the tender. The section includes forms and schedules which tenderers complete to provide the information required to suit the evaluation criteria, including products and prices.

This enables a prospective contractor to respond to the RFT.

The organisation is to ensure that the following sections of the “Response to RFT” are appropriately completed:

• Tenderer’s Details • Settlement Discounts • Price Basis • Compliance/Acceptance of RFT Conditions Checklist.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.12 Further Considerations • Acceptance of Alternative Tenders - The RFT should clearly state whether alternative tenders

will be considered and the basis upon which they are to be submitted and considered. • Requirements for meeting objectives on local and regional enterprises – refer to the Economic

Development Guidelines • If performance bonds and unconditional undertakings are part of the tender, agencies are to

refer to the following documents - Eligible Financial Institutions – Issue of Performance Bonds and Unconditional Undertakings Obtained for Government Contracts or Private Financed Projects (TC 08-01);

• Premier’s Memorandum 2003-05: Government Waste Reduction and Purchasing Policy; • Premier’s Memorandum M2008-28: Government Energy Management Policy; • Interpreter Budget Requirements in Contracting Out Services and Funding Services Delivered

by Non-government Organisations, Government Trading Enterprises And State Owned Corporations, Premier’s Memorandum 98–22; and

• NSW Government Code of Practice for Procurement. 3.3.3 Preparation of RFT using Preparation/Evaluation Software To further assist in the use of the standardised RFT, the HP endorsed the use of a tender preparation/evaluation software called TenderMax™. It is acknowledged by the HP that the use of this software reduces tender preparation, evaluation time and subsequently reduces demand on the Public Health Organisation resources. Some key features are as follows: • Better and objective design • Imbedded auto scoring • Comprehensive Reporting • Audit Trails • Overall Probity • Portability In light of the above, the use of Tender Preparation/Evaluation Software should therefore be considered subject to local requirements. The HP oversees the implementation of the above-mentioned software including education of users and should therefore be contacted for this purpose. Further consideration: In the TenderMax™ format the essential components of the RFT have been re-distributed to enable responders to provide more objective responses as well as supporting documents that can be evaluated by the experts in the field. 3.3.4 Tender Evaluation Plan – Preparation The evaluation plan sets the rules on how tenders will be evaluated, the role, composition and functions of the evaluation team, and the governance of the evaluation process. While the level of detail will reflect the nature of the project, the plan should include information such as the evaluation objective, process timeframes, the evaluation criteria with weightings, information to be used to evaluate tenders, any procedures for clarifying or checking information with tenderers, the process for decision making, an outline of the evaluation report and recommendation to be written, and information about awarding the contract and notifying tenderers.

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Refer in this regard to the NSW Government Code of Practice for Procurement and Premier’s Memorandum PM98-12 regarding the use of probity auditors. Further Considerations • The evaluation plan should be prepared as early as possible, but at the latest before tenders close. • Appropriate approval should be obtained for the evaluation plan 3.3.5 Selection Criteria Selection criteria should contain the critical factors on which assessment of the tenders will be based to ensure the goods or services offered meet the specified requirements and achieve best value for money (see Standard Tender Document specifically the specification section for more info). Selection criteria must be clearly identifiable to tenderers in the tender document. Ideally, the weightings of the selection criteria should be determined prior to the issue of the tenders or at the latest before the close of tenders. Generally the weighting of the selection criteria shall not be disclosed to tenderers. In addition to prices tendered, evaluation criteria shall contain the critical factors to be used in the evaluation of tenders. These factors may include, but are not limited to: • whole-of-life costs, including costs of disposal; • innovation offered; • delivery times offered; • quality offered; • previous performance of tenderer; • experience of tenderer and personnel proposed; • capability of tenderer, including technical, management, human resource, organisational and

financial capability and capacity; • tenderer’s occupational health and safety management practices and performance; • tenderer’s workplace and industrial relations management practices and performance; • tenderer’s environmental management practices and performance; • tenderer’s community relations practices and performance; • valued adding components such as economic, social and environmental development initiatives, if

appropriate and relevant to the procurement; and • conformity of tender with requirements. The evaluation criteria should be consistent with the proposed contract requirements and aim to identify the tenderer offering the best value for money. 3.3.6 Review of the RFT Seeking unnecessary information can add to the cost to service providers preparing and submitting tenders. Prior to the release of the RFT, it should be independently reviewed to: • Check for content, clarity and consistency; and • Confirm it only requests the information necessary to evaluate the tenders against the evaluation

criteria.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.14 Once the RFT has been reviewed and settled, confirm the availability of funds to proceed with procurement action and obtain formal agency approval to release the RFT. 3.4 ADVERTISING TENDERS 3.4.1 Advertisement Tenders shall be invited at such times and in such a manner as to ensure the greatest possible competition amongst tenderers. Where tenders are called by public advertisement public and health organisations should provide equal opportunity to all tenderers qualified to respond. All tenderers are expected to respond with integrity to all requirement of the invitation to tender. Any advertisement should be designed and placed so as to attract the attention of bidders in the relevant industry and/or location. A good advertisement is a key part of the procurement or disposal strategy and should include as a minimum: • focuses most attention on the organisation’s need (scope and requirement of tender); • states clearly the place, date, time and how for lodgement of bids; • states how to obtain detailed documentation and details of contact person; and • is consistent in size and in placement with the value, importance and nature of the contract. • price of purchasing tender document, if applicable and payment details • prominent notification of the need for compliance with the “NSW Government Code of Practice

for Procurement” or any other applicable Code. (Already in banner of Sydney Morning Health Monday.)

Where a tender is being invited to replace an existing contract sufficient lead-time for the tender process should be allowed for formalisation of the contract prior to the cessation of the existing contract. To comply with this Section the following steps should be taken: a) Utilise the “Electronic Tendering System” (eTenders) made available by NSW Health

Procurement (HP) accessible via the HP website http://internal.health.nsw.gov.au/business/hp The eTenders system provides the template for the electronic advertising of tenders.

Further Considerations • Even with eTenders hard copy ads should continue. Organisations are to advertise in the

metropolitan press, and/or the local press, as appropriate. • All advertisements relating to Expressions of Interest and Requests for Tender in the

Metropolitan area must be placed in the NSW Government composite advertisement, appearing in the Sydney Morning Herald Tenders Section on Mondays. Separate display advertisements are not accepted by the GAA.

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• Each advertisement shall only display the essential information relating to the Tender: • Tender title and description; • Tender number or reference; • phone enquiry number or fax number; and • relevant tender website address. Please ensure that potential tenderers are able to access full

details of each tender opportunity online. • This approach ensures Tender information is consistent across government, reduces advertising

costs and conforms to the NSW Premier’s Department regulations. • Advertisements may be placed in the classifieds section only of local, rural or specialist

publications as appropriate. Only information essential to the tender is to appear in all advertisements.

• Any requests for advertising outside of these guidelines must be approved by the GAA. In such

cases a detail letter addressed to the General Manager of the GAA, explaining the justification for the variation to the GAA Guidelines and signed by the relevant delegated authority should accompany the request for advertisement placement.

• Enquiries regarding tender advertising should be directed to the GAA by phone, on (02) 9372 7402

or by fax to (02) 9372 7422. (PD2005_267) ([email protected]) • See PD2005_633 for NSW Health Advertising Policy. b) To facilitate receipt of tenders, tender documents can be posted to companies known to be potential

suppliers. c) All advertisements must display the following paragraphs: “It is the NSW Government’s objective

to ensure that Australian Industry is given every opportunity to win Government contracts”. N.B this already appears in the banner of the Sydney Morning Herald on Mondays.

3.4.2 Tender Invitation The tender period needs to be sufficient to encourage service providers to submit a tender and for the tender to be a competitive response. When setting the timeframe consider the value, complexity or strategic nature of the tender. As a guide, a common period is four weeks, with two weeks considered the minimum. Invitations should allow sufficient time for bidders to fully develop bids, make site visits etc. The organisation should ensure the nominated locations, sites or samples are available for inspection by tenderers. The problems caused as a result of unduly short tender periods include weak competition, poorly prepared tender documentation and inadequate understanding of contract requirements, the impacts of which may not be manifested until after the contract commences. When in doubt it is reasonable to ask several firms the period they would require to prepare a bid for the type of business on offer. Extensions of the closing time are to be avoided and may only be granted on the authority of an authorised officer with reasons for such extension being fully documented and retained on file. If an extension beyond 24 hours is granted all known prospective tenderers must be advised and the extension advertised where the period of the extension allows sufficient time for the placement of an advertisement.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.16 No tender documents are to be issued after the stipulated closing time. 3.4.3 Tender Briefings and Clarification A briefing for potential tenderers can be held to provide them with an overview of the tender documents and what is being sought. The briefing also provides an opportunity for tenderers to clarify issues before the tender closes. If it is compulsory for tenderers to attend a briefing session, this should be clearly referred to in the invitation to tender and stated as a condition of tender. Where tenderers seek clarification of the tender specifications, requirements or other matters, this process should be managed in such a way as to not give one tenderer an unfair advantage over others. This can be achieved by providing any clarifying information to all tenderers. No person or firm quoting/tendering is to be offered any advantage over any other person or firm quoting/tendering- this includes any form of information. Further consideration

When utilising tender preparation/evaluation software for the release of an RFT, the HP as consistent with the implementation of the software called TenderMax recommend and provide support to the establishment of supplier briefing sessions prior to the release of tenders. This is to provide the opportunity for prospective tenderers to understand the requirements/format and how tender responses may be lodged. 3.4.4 Electronic Tendering The NSW Government Electronic Procurement Implementation Strategy (Premier’s Memo 2001-16) has established goals and targets for moving government procurement online, and is encouraging industry to adopt corresponding electronic procurement practices. Key features of the strategy include: • An electronic tendering system and single NSW Government entry point which enables

tenderers to electronically access tender documents and information and lodge tenders (see tenders.nsw.gov.au);

• Technology for the sharing and management of project information online (see asset.gov.com.au);

• Agencies reviewing and re-engineering their procurement processes and instruments; and • Performance monitoring and reporting.

To support public heath organisations in the use of electronic tendering system, the HP progressed the establishment of NSW Health Tenders Web Page consistent with the “tenders.nsw template”. The health tenders public site is located at http://tenders.nsw.gov.au/health, whilst the admin site where public health organisations access the system to manage their tenders is located at http://tenders.nsw.gov.au/health/shared/admin/index.cfm To ensure consistency and probity, the electronic process mirrors the traditional paper based system. By converting these manual/paper-based model to an electronic process, significant savings and efficiencies are realised.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.17 3.4.5 Electronic Tendering – Security The handling of tenders demands high standards of confidentiality and probity. This dictates that users are expected to implement business practices that promote strict security to tenders when using the eTendering system. In particular, the system should never be left unattended even for short periods. Although the eTendering system is set to automatically log-out a user after a period of inactivity [30 minutes], it is essential that the user log off the eTendering system at anytime their attention is required elsewhere. Passwords should never be revealed or written and stored where other people can view or access. Passwords should always be changed on a regular basis. 3.4.6 Electronic Tendering - System Outage Tenders are by standard, open for a minimum of two (2) weeks, it is the responsibility of the tenderers to allow themself ample time to lodge a response. As tender responses vary in size (content-wise), transmission speed also vary from 1 minute to 320 minutes or more, therefore, submission should NOT be initiated fifteen (15) minutes before the closing time. This rule will eliminate the possibility of tenderers using the “ran out of time” excuse for failing to submit a response the proper way within the minimum two-week period. However, an emergency situation may still occur. In this instance, an emergency situation can be classified into two scenarios: a) ETendering system emergency

Where time allocated by the Tenderer to initiate lodgement of a response is reasonable but an outage occurred which will last till closing time.

System outage affects the lodgement of tender responses. Specific actions ensuring strict

adherence to the eTendering standard procedures will eliminate confusion and misunderstanding. Parties involved, i.e., Department of Commerce, HP, public health organisations and the prospective tenderers, are expected to abide by the following set of actions to overcome difficulties during system outage.

The Department of Commerce shall provide advance notice to all users of anticipated system

interruption and expected return of service by forwarding an email to HP. HP shall in turn advice public health organisations of the system interruption.

If a list of prospective tenderers is available, the public health organisation shall endeavour to communicate the outage to prospective tenderers within possible means. If the outage is only of short duration and still leaves ample time for submission, tenderers are expected to wait until return of service.

b) Tenderer’s emergency

Where despite the tenderer’s knowledge of the response lodgement requirement, the transmission was still initiated late and was interrupted by system failure. Where a re-try will past the closing time.

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The tenderer is expected to immediately contact the public health organisation’s contact person for the tender before the closing time and convey the difficulty encountered. The public health organisation’s Authorised Officer is to assess the situation and/or discuss the matter with relevant Health Service personnel and acknowledge with the tenderer whether submission is to be accepted or not. [This may be subject to local Health Service policy] An option the Authorised Officer may take is to inform the tenderer that:

An email response may be allowed subject to an accompanying letter with a strong and valid

justification of the lateness of the tender response and failure to transmit is submitted. Acceptance of such tender response is subject to the merit of the justification.

Accepted submissions must be approved-stamped by the Area Contracts Registrar and witnessed by the public health organisation’s Authorised Officer. 3.4.7 Recording of RFT Recipients The names and addresses of persons/firms who have been provided with the tender documents should be recorded to enable contact if changes occur to the conditions or specification. 3.4.8 Amendments to RFT documents Where it becomes necessary to amend tender documents the amendments must be advised as an addendum to all tenderers in sufficient time for all tenderers to properly and fully consider the addendum before tenders close. Each addendum should state clearly that it is meant to be incorporated in the tender documents. Tenderers should be required to confirm its receipt in writing, and should confirm in their tenders that allowance has been made for each addendum. Consideration may need to be given to extending the tender period when an addendum is issued. If the tender period is extended all known tenderers are to be advised of the new closing time and date. In respect of eTendering an electronic alert is processed alerting registered respondents. 3.4.9 Meetings with Tenderers During the tender period there may be a need to meet with the tenderers. The organisation should nominate a contact person with knowledge of the requirements of the tender to respond to all enquiries from tenderers. All such enquiries should be recorded, noting time and date of receipt, and the issue raised and any response provided. Any information given to a particular tenderer, which clarifies any aspect of the tender, must also be communicated promptly, in writing, to all other tenderers. This will not apply in relation to confidential or intellectual property information provided by tenderers. Where an enquiry reveals a significant error, including ambiguities or discrepancies, the information provided should be conveyed in writing to all tenderers. Where the tender documents require a pre-tender briefing, such a conference with tenderers should be minuted and the minutes should be forwarded to all tenderers, and become part of the tender documents.


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When tenderer meetings are held all tenderers must be invited and the meetings should refer exclusively to the tender documents and must not be in conflict with or add to the tender documents. Such meetings are to be minuted and such minutes are to be forwarded to all tenderers and incorporated in the tender documents. The only exception to the above policy is where clarification is required which could be classified as commercial in confidence and discussion is only held with one tenderer. In such circumstances all tenderers should be offered the same opportunity and it is advisable to include such provisions in the tender documents. 3.5 RECEIVING AND OPENING OF TENDERS The invitation and receipt of tenders should be conducted using ethical behaviour and with probity. The process is to be transparent, with fair competition that achieves and identifies the best value for money for Government and clients. The NSW Government Code of Practice for Procurement encourages the highest ethical standard in tendering practice by all participants. Refer also to publications of the Independent Commission Against Corruption for further information on probity in Government procurement. The procedures for the receipt, opening and registration of tenders must safeguard the security and confidentiality of the tenders. Be mindful of probity issues associated with late tenders and the subsequent risk to the integrity of the evaluation process. Late tenders should not be considered, except where the client is satisfied that the integrity and competitiveness of the tendering process has not been compromised. See Late Tenders – section 3.5.5. 3.5.1 Electronic Tendering [E-Tendering] – Lodgement and Receipt All procedures that govern the tender opening and the tender opening committee as specified hereunder apply also to E-Tendering. a) The E-Tendering System must comply with the relevant organisation system Condition of Access.

In particular all system users must have a unique user ID and must not share passwords with others. b) Care should be taken to ensure that E-Tendering system functions are appropriately segregated. For

example, the agency administrator (User Management Function) should not be responsible for other functions within the system. Staff creating RFT’s and Addenda should not be responsible for publishing those documents on the web site. Where functions are unable to be segregated due to resourcing constraints, compensatory manual controls will need to be devised.

c) Local internal auditors should also be consulted regarding any internal control issues. d) When downloading information on to disc, it should be burned to CD/DVD so that information

cannot be altered. CD’s/DVD’s should be dated and initialled by the Tender Opening Committee and attached to the Tender schedule.

e) Computers do not have to be locked away in a room by themselves, however controls are to be in

place so that only authorized users can access the eTendering system to upload initial documents, insert addenda and download tender information.

f) Tender identification codes are to be securely locked away and only be accessible to the authorized

tender officer.


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If a Tenderer submits a tender both in hard copy and by e-Tender the e-Tender document is to be either burned to CD/DVD or downloaded to hard copy and married to the hard copy tender document. If a Tenderer submits hard copy information and also then the same information is submitted electronically by the tender closing date, the information submitted electronically is to be the document accepted as the valid tender (a Tenderer might submit a hard copy tender, then decide to amend the information submitted and e-Tender the amended information).

g) Contingency procedures are to be in place to cover technology failure. These procedures are to

ensure all electronic tenders are handled on a consistent basis where problems with the technology are encountered.

h) RFT’s available on the “E-Tendering System” requires Tenderers to pre-register onto the system

prior to viewing and downloading of RFT documents. This process ensures that Tenderer’s contact details, specifically the Tenderer’s email address, are recorded. Upon lodgement and receipt of an electronic tender response, a system generated email is forwarded to the Tenderer as an acknowledgment of receipt of RFT response.

3.5.2 Receipt of Tender Probity is vital in all stages of the tendering process, including the receipt and processing of tenders. Arrangements must be made to safeguard the security and confidentiality of all tenders. 3.5.3 Tender Box Each organisation is to maintain one tender box only which shall be maintained and secured with two different locks. The keys to the locks will be held by separate senior officers to ensure that no single officer can open the tender box. Duplicate keys should be treated in a similar manner. The box should be prominently located in a public area and should be capable of accommodating plans, drawings etc. which may accompany tenders. If tender documentation is too large to fit in the tender box the “tender contact officer”, or other officer designated as being in charge of tender box, is to be contacted so that the documents can be securely locked away. Confidentiality of the tendered information is to be ensured in any alternate storage of tendered information. E-Tendering Consideration - the system provides the function that requires 2 witnesses and the Contracts Officer to login their separate secure passwords before the electronic tender box can be opened. 3.5.4 Tender Opening & the Tender Opening Committee There shall be a Tender Opening Committee, the majority of members of which should be independent of the assessment process. The Tender Opening Committee shall consist of not less than three (3) officers. If a Committee of three (3) officers cannot exercise the functions of the Committee adequately, additional officers may be co-opted with the approval of the officer who authorised the calling of the tender.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.21 It is not intended that the same Committee need necessarily consider each separate tender opening. Committees may be called together on an ad hoc basis. The Officer who authorised the calling of the tender shall in respect of each Tender Opening Committee, nominate a member of that Committee (including any co-opted member) to act as the senior member of that Committee. The tender box shall be opened in the presence of a Tender Opening Committee as soon as practicable after the time fixed for the closing of the tenders. At a minimum upon removal of each tender from the tender box the following action shall be taken: • Tenders numbered in order of opening • Initialled on each page containing monetary references by not less than two members of the

Opening Committee and the Convenor (HAC). N.B. The organisation may elect to number and initial each page

The particulars of each tender received and opened shall be entered on a schedule and shall include: • the names of the tenderers; • the names of those who submit “no tender” and • the pricing particulars of each tender. All members of the Tender Opening Committee shall sign the schedule. Should a tender be accidentally opened, the tender should be endorsed to that effect by the officers present, date stamped, resealed and placed in the tender box. It is desirable that each tender is examined to ensure that: • it has been correctly completed and signed; • prices and other essential details have been included; • items not tendered for have been acknowledged; • there are no obvious irregularities. Bids and other responses received should be recorded and handled so as to preserve their confidentiality. Confidential information from bidders must not be given to competitors or otherwise disclosed, subject to release of information about the winning bid at the completion of the selection process. E-Tendering Consideration – the eTendering system includes data encryption that is executed using encryption software. This occurs automatically when tender responses are received and requires no further action by the user. Tender responses are received in an “encrypted” format to ensure that only recognisable and pre-registered electronic keys are able to “decrypt” these encrypted responses.

Prior to tender opening and “decryption”, HP as per the request of the public health organisation, enters names of each member of the Tender Opening Committee onto the system. Each tender opening committee member is assigned a unique user ID and password and is required to individually enter their details during tender opening. They must be present during the entire tender opening process including the “burning of tender responses to CD/DVD process”. At this stage, it is required that the screen displaying all the names of the Tender Opening Committee is printed on paper for each member of the Tender Opening Committee to sign and acknowledge that they were present during the Tender Opening and decryption process. This signed document (Opening Agenda) is to be kept as part of the official record relating to the RFT.

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3.5.5 Late Tenders The responsibility rests with the bidders to submit bids on time. The dangers inherent in accepting late bids include: • the possibility that the late bidder has obtained information about the other bids after the closing

time; • the possibility that other bidders will be concerned that a late bidder has obtained an unfair

advantage; • the possibility that a pattern of late bidding will develop. A tender or written quotation received after the time advertised or fixed for its receipt shall not be considered unless: • there exists clear evidence that the tender was posted before that time; or • facsimile advice was received before that time detailing price and delivery schedules. In normal

circumstances facsimiles are not acceptable unless approved by the Tender Contact Officer. • the late tender was the only tender received and it conforms to specifications. • the organisation accepting the tender is satisfied that the integrity and competitiveness of the

tendering process has not been compromised. The tests of integrity and competitiveness might include these questions:

o Was the late tender received prior to the completion of the tender opening and recording

process? o Was it clear that the cause of the lateness was beyond the tenderer’s control? o Is the late tender significantly different that no information from other tenderers could have

assisted in framing the late tender? o Is a late tender the only conforming tender received?

In respect to the first 2 points any such evidence or advice shall be attached to and retained with the tender. Organisation staff, if accepting facsimile tenders, should be aware of probity issues, e.g. confidentiality of prices. When a late tender is received, the time and date of receipt shall be noted in the document and endorsed by the recipient. The tenders and schedule are then to be forwarded to the committee or officer delegated to review tenders. E-Tendering Consideration - Late tenders cannot be received electronically as the electronic tender box automatically closes at the specified closing date and time. 3.5.6 Alteration to Tender Submission After Receipt Tenderers should not be permitted to alter or amend the original of any tender or annexure thereto after receipt in the organisation. Any such alteration or amendment must be by means of an explanatory letter. Except as provided in these procedures officers must not deface or make notations on tenders. 3.5.7 Clarification of Tender’s Information (See also clause 3.6.2 on “negotiations”)


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In circumstances where a statement or information provided in a tender submission is open to interpretation or is not understood, clarification of the statement or information should be obtained from the tenderer. The clarification request must be framed in a manner that does not result in the tenderer gaining advantage over other tenderers (eg revising or expanding the offer). Any discussion or contact with tenderers during the tender evaluation period must be done with due regard to probity, in particular: • No information on the evaluation process must be divulged to any tenderer. • The status (preferred, under consideration or rejected) of any tender must not be advised or implied to any

tenderer. • Interaction with tenderers should be in writing. In circumstances where an issue is discussed verbally with

the tenderer, the discussion must be documented, dated and signed and maintained with the tenderer’s submission. The tenderer must confirm their verbal advice in writing (signed and dated) prior to the completion of the evaluation process.

3.6 TENDER EVALUATION Selection criteria should have been advised to bidders during the invitation process. The same criteria must be applied during the assessment of bids. If criteria have not been developed they must now be determined prior to the assessment, to ensure an objective and rational basis for the assessment. It is not always necessary to conduct a detailed analysis of all bids. An initial cull of bids clearly out of contention is in order so long as the cull is based on the pre-determined criteria. It is critical that tender evaluation and reviews are carried out thoroughly, so that the organisation that called tenders is satisfied that the best value is obtained from the tenderer finally awarded the contract. Time and effort spent during the tender evaluation and review period can be saved many times over during the execution of the contract. All tender information must remain confidential between the tenderer and the persons within the organisation-calling tenders who have a direct involvement with the particular tenders. If a person evaluating or reviewing tenders becomes aware that there is a potential conflict of interest in that person’s involvement in the tender review process, that person must declare their interest. The continuing role of that person in the tender evaluation and review is to be determined by an independent senior person to ensure that probity is maintained. Such conflict of interest and actions taken must be documented to ensure transparency of the process. Where tenders have been invited from particular contractors, through the Selective or Pre-qualified Tender processes, tenders must be examined to ensure that tenders being considered are from the contractors who have been invited. Evaluation may be carried out by a committee or by a competent officer officially delegated. When necessary, expert advice from outside the organisation may be called for. 3.6.1 Evaluation Procedures Clear tender evaluation procedures must be established prior to the close of tenders. Tender evaluation criteria are used to help identify the best value for money tender and are linked to the information required from the tenderers in the tender documents.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.24 The evaluation is to involve a fair comparison of tenders, using the same evaluation method and criteria for each tender. The process is to be conducted by personnel with sufficient skills and knowledge in matters appropriate to the nature, value and importance of the procurement. Any conflict of interest with evaluators must be declared and resolved. For complex procurement with a high value, or high risk, an evaluation team must be established. Team members will contribute a mix of skills to the evaluation process, appropriate to the various aspects of the tender being evaluated. Refer to Premiers Memorandum 98-12 concerning the use of probity auditors by Government agencies. See section 3.1.4 “Probity”. When evaluating tenders from other Government agencies, evaluating officers should refer to Treasury’s Policy Statement on the Application of Competitive Neutrality (Treasury Policy Paper TPP02-1 refers). Any tender that does not comply with the tender requirements may be passed over. When a tender is passed over or rejected, or a non-conforming tender is recommended, the reasons must be clearly documented by the evaluators. Further Considerations Agencies must ensure the confidentiality of tenders is maintained. Except where the nature of the goods/services/works to be acquired call for a different approach, tenders should be evaluated in terms of their technical, price and commercial suitability. Price/cost comparisons should be on the basis of whole of life cycle cost including cost of disposal where applicable. Technical • Technical/clinical evaluation entails a detailed comparison of tenders against the specification

with those tenders having significant departures from the specification being eliminated (non-conforming tenders).

• The ability of tenderers to meet the technical requirements of the specification may need to be evaluated.

• It may be necessary to contact tenderers to clarify certain technical aspects of their tender. Such contact should be made with discretion by a senior officer and should be for clarification only, not amendment.

• If circumstances make it desirable to accept a tender that is not entirely in accordance with the specification all tenderers must be given an opportunity of meeting the variation.

• Where applicable, the availability of spare parts and service facilities should be checked. Price • Price comparisons are to be made on a net basis, i.e. base price less trade-in and/or settlement

discount if feasible plus any applicable surcharges and exclusive of GST. • Preference in favour of New South Wales country and/or Australian manufactured items is to be

applied on the scale laid down in the Government Purchasing Policy, contained in this section. (Appendix 3-B and 3-B1 re Australia-United States Free Trade Agreement.)

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Commercial - Factors to be considered under this heading are: • Tenderers’ delivery terms, i.e. whether FIS, or other. • Tenderers’ price variation conditions. Do they differ from those set out in the tender documents

and, if so, are they acceptable? • Tenderers’ financial status and ability to meet delivery requirements. • If installation is involved, whether arrangements for payment are clearly understood. • Whether tenderers are seeking to impose unacceptable conditions in any other respect. 3.6.2 Negotiations Organisations and tenderers should give careful consideration to their role and conduct in negotiations to ensure their behaviour reflects the ethical principles. In any tender related negotiations or evaluations, the organisation must deal fairly with all tenderers in a manner, which reflects the “Standards of Behaviour “ as listed at Appendix 1-B of chapter 1. Organisation must not in any way use negotiation (including post tender negotiation) as an opportunity to trade off different tenderer’s prices against others in an attempt to seek lower prices. This practice is known as “bid shopping”, and is unacceptable. If after a competitive tendering process none of the tenders are acceptable or conforming, negotiations may be conducted with the tenderer, which is the closest to conforming to the tender requirements and provides best value for money. The aim is to achieve a conforming tender. The decision to proceed with negotiated tenders should be when conformity to requirement is considered achievable and must be approved by the organisation’s Chief Executive, or appropriate delegate. Organisations must first exhaust negotiations with the tenderer that is the closest to conforming, before negotiating with subsequent tenderers, unless time constraints dictate to the contrary. There are instances when the organisation may negotiate with the preferred tenderer to mutually improve outcomes. The negotiation process should be open and accountable. Tender documents must state clearly the conditions that apply to the evaluation of conforming tenders and any negotiations with tenderers. The purpose of the negotiations must be established and made clear to all participants prior to the commencement of negotiations. Written records of all negotiations, including documentation covering who does what, when and why, must be maintained by the organisation. Tender negotiations must not involve trading-off one tenderer’s price against other tenderers’ prices. This practice, referred to as ‘bid-shopping’, is prohibited under the NSW Government Code of Practice for Procurement. 3.6.3 Alternative Tenders Tenderers are encouraged to tender in accordance with the tender requirements. Tenderers may submit alternative offers/tenders, which may be considered but must meet the objective and intent of the tender requirements. A separate response should be submitted for each alternative offered. The organisation reserves the right to reject any alternative Tender.


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3.6.4 Tender Evaluation Process Tender Evaluation may be carried out by a committee or by a competent officer officially delegated. The review aims to provide the organisation’s decision makers with confidence that the process used to select the proposed service provider is robust. The Tender Evaluation committee or delegated senior officer is to: a) e ndorse the recommendation; b) indicate that the appropriate authority to incur expenditure approval has been obtained; and c) forward to the approving officer or alternatively specify reasons for not supporting the

recommendation and return to the evaluating officer etc. In deciding whether to support or reject the recommendation the following factors should be considered: a) Tendering procedure correctly carried out, e.g. tender opening, tender boxes, schedules etc. b) The evaluation done by the appropriate technical people and is the evaluation methodology valid in

respect to the stated reasons for rejection or selection of a tenderer. c) Preference applied in conformity with Government policy. d) Tender to specification, viz, the evaluation process been performed correctly. e) Do your terms and conditions apply or has the tenderer imposed his own and do you know whose

prevail? f) If the tenderer’s terms and conditions prevail are you prepared to accept them? g) Is the price clearly understood? If imported is there a foreign currency component and if so at what

rate of exchange? Is there a settlement discount and is it clear? Is the price firm or subject to rise and fall and if so, on what formulae?

h) Is the point of delivery as required or acceptable? i) Is the recommendation before you in writing and does it make sense? j) If lower price tenders are not recommended are the reasons sound for passing them over? k) Does any member of the Tender Review process have a conflict of interest arising from the matter

before them? l) Have all elements of the NSW Government Purchasing Policy where appropriate been complied

with? m) Has the appropriate authority to incur expenditure been obtained? 3.6.5 Evaluation Report and Recommendation Following completion of the tender evaluation process and selection of a preferred tenderer, the tender evaluation team or delegated officer is to prepare an evaluation and recommendation report recording the reasons for the evaluation team’s recommendation and submits it to the organisation’s delegated authority for approval to accept the recommended tender. The report should be a complete account of the evaluation and must be able to stand up to independent scrutiny. The recommendation is to be signed-off by each member of the Tender Evaluation Committee in writing and should contain all relevant information so that it is fully understandable without reference to the actual tenders.


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A preamble should refer to such matters as the need for the item being acquired, a brief description of the item, the source of any approvals to acquire and/or proceed to tender, the date tenders closed, the number of tenders received and whether any were received after closing time. The body of the recommendation will indicate whether the lowest tender is acceptable or whether lower priced tenders are not being recommended. If the latter is the case, tenders being passed over will be dealt with in ascending price order with full reasons, supported by reference to the relevant specification clause, being given. This process is repeated until the recommended tender is reached. It is important that the reasons for not recommending lower tenders are set down in detail; unsupported general statements such as “not to specification” and “insufficient information provided” are not acceptable. Health organisations should exhaust negotiations with the tenderer that submitted that most acceptable tender before negotiating with the next most acceptable tenderer, unless time constraints or the closeness of the tenders dictate otherwise. If the recommended tender varies from the specification in any significant respect this fact must be noted in the recommendation together with appropriate comment. If there is any unresolved conflict between the terms and conditions set out in the tender documents and those sought by the recommended tenderer, details are to be included in the recommendation with appropriate comment. The committee or officer making the recommendation is to indicate that: • the item is still required; • even if delivery is protracted that the item will still be required when received; and • funds are still available. There is a tendency for the final cost to exceed the Budget estimate. If two or more acceptable tenders are equal in all respects preference is to be given to the current contractor if renewing period contracts, or the previous supplier. When this situation does not apply the matter is to be referred to the approving authority for determination by ballot. 3.7 APPROVING/AWARDING THE CONTRACT 3.7.1 Approval The officer or committee with the appropriate delegation approves the evaluation and recommendation report to accept the successful tender(s). Approving officers must be satisfied that the best offer, as measured against the evaluation criteria, is being accepted. Approving officers must have delegated authority to incur expenditure up to the limit of the tender to be approved. Health organisations may choose not to accept tenders from or award contracts to tenderers who: • have breached the Code and are subject to an applicable sanction; • are bankrupt; • are subject to a winding up order; • have had an administrator appointed or; • are corporate entities with persons involved directly or indirectly in the management of the entity

who are disqualified under corporations law.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.28 When the selection is completed agencies advise the successful tenderer with formal notification of acceptance of its tender or award of contract. Unsuccessful tenderers are to be advised as soon as possible after contract award of the decision. Upon request, a debriefing should be given to unsuccessful tenderers. The unsuccessful tender would be discussed in terms of how well it met the tender requirements and evaluation criteria. Direct comparisons should not be made with the successful tender response. The NSW Government requirements for Public Disclosure of Information Arising from NSW Government Tenders & Contracts (Premier’s Memorandum 2007-01). See 3.7.4 for provisions. Unless otherwise authorised by the tenderer or required by legislation, information included in unsuccessful tenders is to be treated as commercial-in-confidence 3.7.2 Letter of Acceptance The acceptance of a tender and therefore the notification of award of a contract is conveyed by a Letter of Acceptance. The Letter of Acceptance must clearly define the contract, including identification of any post tender correspondence, which is to form part of the contract. As a number of important contractual matters rely on the Date of Acceptance of the Tender, it is important that the Letter of Acceptance be properly addressed and communicated to the Contractor. There is no requirement to formally execute a contract unless there is a specific requirement in the contract to do so. In such cases the precise terms of the contract in relation to a Formal Instrument of Agreement need to be upheld. Where there is no such requirement the contract is legally binding without such formal execution. Contracts are to be executed by those officers with the delegated authority to do so. In respect to the Department of Health such officers are specified on page 8.12 of the Combined Delegations Manual.

It is Department of Health policy for Central Administration that as tenders are normally over $250,000 formal contracts are to be executed for every tender. See Appendix 3-N. Public health organisations and the Ambulance Service are required to execute an appropriate formal contract for all procurements over $250,000. 3.7.3 Advice to Unsuccessful Tenderers Unsuccessful tenderers should be advised promptly of the organisation’s decision after approval procedures have been completed. After acceptance of the contract by the winning bidder, if requested a debriefing should be given to unsuccessful tenderers. • Organisations should offer feedback to encourage better bids the next time. Openness to

tenderers can benefit the organisation whereas restrictions on feedback can frustrate future improvements in bidding.

• The feedback should be limited to the facts of the unsuccessful bid. Any comparisons should

be made against the selection criteria rather than with the successful bidder. Explicit advice about future bids should be avoided.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.29 • The timing of the release of “feedback” information needs to be managed to avoid premature

disclosure which might impact on finalisation of the contract with the winning bidder. However, unsuccessful tenderers should be advised as quickly as possible.

* 3.7.4 Public Disclosure of Information Arising from NSW Health Tenders & Contracts Under

NSW FOI Act 1989 (PD2009_047) Premiers Memorandum M2007-01 Public Disclosure of Information Arising from NSW Government Tenders and Contracts introduced revised guidelines regarding new contract disclosure obligations pursuant to section 15A of the Freedom of Information Act 1989 (NSW) (the FOI Act). The purpose of the revised guidelines is to: • set out the requirements for disclosing tender information; • describe the new contract disclosure obligations in section 15A of the FOI Act; and • outline how requests for contract information, over and above that which is required to be

disclosed under section 15A of the FOI Act, should be dealt with by agencies. The Premier’s Memorandum is available at http://www.dpc.nsw.gov.au/publications/memos_and_circulars/ministerial_memoranda/2007/M2007-01 In order for the NSW Health System to meet its legal obligations under the FOI Act it is important that officers contracting with the private sector are aware of and comply with the disclosure requirements. Section 9 of the attached contract disclosure procedures relate directly to the provisions of section15A of the FOI Act. These schedules of disclosure clearly define what information is to be disclosed and what is classified as commercial-in-confidence and must not be disclosed. This policy applies to all staff of all public health organisations, the Department of Health and the Administrative Units of the Health Administration Corporation (including Health System Support, the Institute of Medical Education and Training, Health Infrastructure and the Ambulance Service of NSW). The Chief Executive Officers of public health organisations, Administrative Units of the Health Administration Corporation and Directors of Department of Health Branches are responsible for ensuring that the requirements of this policy together with the attached contract disclosure procedures are communicated to and followed by staff involved with procurement, tender and contract processing, members of tender opening and evaluation committees and the senior staff overseeing these processes. Detailed information about the disclosure requirements is provided in the attached contract disclosure procedures and they must be read in conjunction with this policy. Section 4 of contract disclosure procedures gives examples of various types of contracts and agreements that NSW Health may enter into that will require disclosure. Sections 7 and 8 of contract disclosure procedures provides assistance in defining the class of a contract and broadly describe the information that is to be disclosed, the timeframe(s) for disclosure and the officer(s) responsible for ensuring that appropriate disclosure occurs. Section 10 of contract disclosure procedures explains how information is to be disclosed. A proforma form to assist with disclosure is located at http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/templates.htm

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http://www.dpc.nsw.gov.au/publications/memos_and_circulars/ministerial_memoranda/2007/M2007-01

http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/templates.htm


* Purpose These procedures are to clarify the requirements and responsibilities for disclosure of information arising from NSW Government tenders and contracts. Applicability These procedures apply to all staff of all NSW public health organisations, the Department of Health and Administrative Units of the Health Administration Corporation (including Health System Support, Institute of Medical Education and Training, Health Infrastructure and the Ambulance Service of NSW). Chief Executives of public health organisations, Administrative Units of the Health Administration Corporation and Directors of Department of Health Branches are responsible for ensuring the requirements of the policy and these procedures are communicated to and followed by staff involved with procurement, tender and contract processing, members of tender opening and evaluation committees and the senior staff overseeing these processes. Introduction Premiers Memorandum M2007-01 Public Disclosure of Information Arising from NSW Government Tenders and Contracts introduced revised guidelines regarding new contract disclosure obligations pursuant to section 15A of the Freedom of Information Act 1989 (NSW) (the FOI Act). The purpose of the revised guidelines is to: • set out the requirements for disclosing tender information; • describe the new contract disclosure obligations in section 15A of the FOI Act; and • outline how requests for contract information, over and above that which is required to be

disclosed under section 15A of the FOI Act, should be dealt with by agencies. The Premier’s Memorandum is available at http://www.dpc.nsw.gov.au/publications/memos_and_circulars/ministerial_memoranda/2007/M2007-01 In order for the NSW Health System to meet its legal obligations under the FOI Act it is important that officers contracting with the private sector are aware of and comply with the disclosure requirements. What contracts are to be disclosed? All government contracts with the private sector with a value of $150,000 or more are to have certain information disclosed. The method of tendering or negotiation is irrelevant. Note 1: Even though the General Purchasing Delegation in relation to public tendering has been increased to $250,000 and procurement activities between $150,000 and $250,000 do not have to go to public tender the information covered by the FOI Act must still be disclosed where the value of the procurement is over $150,000. Note 2: Contracts awarded to suppliers for State Contracts Control Board Whole-of-Government or Health panels are not disclosed upon award of contract as these contracts are standing offer arrangements and do not relate to a discrete procurement activity. Disclosure pursuant to the FOI Act is to occur when an individual order in excess of $150,000 is placed with a supplier.

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http://www.dpc.nsw.gov.au/publications/memos_and_circulars/ministerial_memoranda/2007/M2007-01


* Note 3: A Preferred Supplier Agreement that may be entered into by an Area Health Service or other entity under a standing offer panel contract is defined as a contract and disclosure of information must be made in accordance with the FOI Act. The projected expenditure over the life of the Agreement is to be used in determining the contract value. Note 4: A formal Pricing Agreement where there is a commitment on the part of the supplier to maintain a particular price whilst expenditure remains above a specific benchmark and there is sign-off by both parties is defined as a contract for the purposes of disclosure. It is to be treated in the same manner as a Preferred Supplier Agreement. However, a firm price quotation where a supplier commits to hold a price for a period of time but there is no guarantee or commitment to volumes or value of purchases by the Health system does not require disclosure pursuant to the FOI Act unless an individual order in excess of $150,000 is placed. What is a government contract? All government contracts with the private sector with a value of $150,000 or more are to have certain information disclosed. In the context of the NSW Health System operationally a government contract is generally understood as: (a) A contract between NSW Health (including Area Health Services and other Health related

entities) and a private sector entity under which NSW Health (including Area Health Services and other Health related entities) or the private sector entity agrees: (i) to undertake a specific project (such as a construction, infrastructure or property

development project), or (ii) to provide specific goods or services (such as information technology services), or (iii) to transfer real property to the other party of the contract,

(b) A lease of real property where the parties to the lease are NSW Health and a private sector entity, but does not include a contract of employment.

Are any contracts exempt? Individual employment contracts (but not labour hire contracts with employment agencies), Visiting Medical Officer contracts and contracts not with the private sector (such as those with another government agency, Area Health Services or internal business unit). What information is to be disclosed? The information to be disclosed is dependent on the class of the contract. A flowchart is attached to assist in determining the class of the contract that has been entered into and thus the information that is to be disclosed. Contract information disclosure requirements The FOI Act requires the routine disclosure of contract information as follows: Tenders For all public calls for tender, expressions of interest or other such public calls which may result in a contract with the private sector:

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* What information? As a minimum: • a concise description of the proposed works, goods or services that are the subject of the tender

call; • the date responses to the tender call close and where responses are lodged; and • location of the tender call documents. (This information is generally contained in the tender advertisement) When? Disclosure at the time tender calls are advertised. Who? The officer undertaking the procurement or managing the procurement process. The onus is on this person to provide all necessary information to an officer who has access to publish information on the e-tenders website. What? The names and addresses of all entities who submit responses. When? Within seven (7) days of the date tender calls closed. Who? The Chair of the Tender Opening Committee. For a multi-stage tender process: What information? The names and addresses of the shortlisted entities, except where such disclosure is likely to compromise the competitiveness of the subsequent tender process. When? Within seven (7) days of these entities being advised of their short listing. Who? The officer undertaking the procurement or managing the procurement process. The onus is on this person to provide all necessary information regarding the shortlisted suppliers to an officer who has access to publish information on the e-tenders website. Contracts Class 1 contracts are: All contracts with an estimated value $150,000 or above. What? The information set out in schedule 1 (see section 9 below). When? Within 60 days after the contract becomes effective.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.32.1

* Who? The officer undertaking the procurement or managing the procurement process. The onus is on this person to provide all necessary information regarding the successful supplier to an officer who has access to publish information on the e-tenders website. Class 2 contracts are: Class 1 contracts (i.e. contracts with an estimated value $150,000 or above) which also: • result from a direct negotiation where there has not been a tender process; or • have been the subject of a tender process and where the final contract terms and

conditions are substantially negotiated with the successful tenderer (this includes alliance type contracts); or

• involve operation or maintenance obligations for ten (10) years or longer; or • involve a privately financed project as defined by relevant Treasury guidelines; or • involve a transfer of land or other asset to a party in exchange for the transfer of land or

other asset to an agency. What? The information set out in schedules 1 and 2 (see section 9 below). When? Within 60 days after the contract becomes effective. Who? The officer undertaking the procurement or managing the procurement process. The onus is on this person to provide all necessary information regarding the successful supplier to an officer who has access to publish information on the e-tenders website. Class 3 contracts are: Class 2 contracts where the estimated value of the contract is $5 million or more. What? The information set out in schedules 1 and 2 (see section 9 below) and publication of the complete contract, less confidential information. Note: If the class 3 contract is not published in its entirety or some items of the contract are not disclosed for reasons of confidentiality, NSW Health should disclose: • the reasons for not publishing the contract or provisions; • a statement as to whether the contract or provisions will be published and, if so, when;

and • where some but not all of the provisions of the contract have been disclosed, a general

description of the types of provisions that have not been published. When? Within 60 days after the contract becomes effective. Who? The officer undertaking the procurement or managing the procurement process. The onus is on this person to provide all necessary information regarding the successful supplier to an officer who has access to publish information on the e-tenders website.

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* SCHEDULES OF DISCLOSURE FOR CONTRACTS SCHEDULE 1 (Section 15A(2) FOI Act) The schedule 1 information required to be disclosed is as follows: (a) The name and business address of the contractor; (b) Particulars of any related body corporate (within the meaning of the Corporations Act

2001 (Commonwealth)) in respect of the contractor, or any other private sector entity in which the contractor has an interest, that will be involved in carrying out any of the contractor's obligations under the contract or will receive a benefit under the contract;

(c) The date on which the contract became effective and the duration of the contract; (d) Particulars of the project to be undertaken, the goods or services to be provided or the

real property to be leased or transferred under the contract; (e) The estimated amount payable to the contractor under the contract; (f) A description of any provisions under which the amount payable to the contractor may

be varied; (g) A description of any provisions with respect to the renegotiation of the contract; (h) In the case of a contract arising from a tendering process, the method of tendering and a

summary of the criteria against which the various tenders were assessed; and (i) A description of any provisions under which it is agreed that the contractor is to receive

payment for providing operational or maintenance services. SCHEDULE 2 (section 15A(3) FOI Act) The schedule 2 information required to be disclosed is as follows: (a) Particulars of future transfers of significant assets to the State at zero, or nominal, cost

to the State, including the date of their proposed transfer; (b) Particulars of future transfers of significant assets to the contractor, including the date

of their proposed transfer; (c) The results of any cost-benefit analysis of the contract conducted by the agency; (d) The components and quantum of the public sector comparator if used; (e) Where relevant, a summary of information used in the contractor's full base case

financial model (for example, the pricing formula for tolls or usage charges); (f) Where relevant, particulars of how risk, during the construction and operational phases

of a contract to undertake a specific project (such as construction, infrastructure or property development), is to be apportioned between the parties, quantified (where practicable) in net present-value terms and specifying the major assumptions involved;

(g) Particulars as to any significant guarantees or undertakings between the parties, including any guarantees or undertakings with respect to loan agreements entered into or proposed to be entered into; and

(h) Particulars of any other key elements of the contract.

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* SCHEDULE 3 (definition of 'commercial-in confidence' provisions in section 15A(14), FOI Act) Commercial-in-confidence information which is not to be disclosed is as follows: • The contractor's financing arrangements; • The contractor's cost structure or profit margins; • The contractor's full base case financial model; • Any intellectual property in which the contractor has an interest; or • Any matter whose disclosure would place the contractor at a substantial commercial

disadvantage in relation to other contractors or potential contractors, whether at present or in the future.

How is information disclosed? All tender and contract information required to be disclosed is to be posted on the government tenders website https://tenders.nsw.gov.au (or such other internet website authorised by the Premier for the purposes of the FOI Act). The Contract Award Details form found at http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/templates.htm is to be completed and forwarded to Procurement Advisory Service, Strategic Procurement for NSW Department of Health contracts and for Area Health Services contracts to the Area Tenders and Contracts Managers who have authorised access to the NSW Health e-tender website. If this level of access is not available in the Area Health Services Health Support Services will be able to publish information on the Area’s behalf. This form should also be used for quotation processes with a value between $150,000 and $250,000. Who is responsible for disclosure of information? Tenders The officer undertaking the procurement or managing the procurement process e.g. project or contract manager is responsible for providing the tender information. The Chair of the Tender Opening Committee is responsible for ensuring the list of respondents is published. Where both electronic and hardcopy submissions have been received care must be taken to ensure that all the respondents are disclosed. Contract Information The officer undertaking the procurement or managing the procurement process e.g. project or contract manager, has the primary responsibility for disclosure. This person will normally be the Chair of an Evaluation Committee who is making a recommendation on the successful supplier to management. Senior staff approving evaluation committee reports, submissions or similar documents that will lead to a contract requiring disclosure or executing such contracts should reinforce the requirement for disclosure and follow-up to ensure it this has occurred. In most cases it will be necessary to provide all required information to another officer who has access to publish information on the e-tenders website.

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http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/templates.htm


* When required, the NSW Department of Commerce will undertake disclosure for any tender processes they manage or contracts they enter into and Health Support Services will be responsible for disclosing their tendering and contracting processes. How long does the information disclosed have to remain on the website? Tender information remains posted until the tender process has been concluded and either a contract has been awarded or a decision is taken not to award a contract. Contract information remains posted for at least thirty (30) days or until all work under the contract has been completed or goods are supplied, whichever is the greater. Further information Additional information, advice or assistance can be obtained from the Procurement Advisory Service, [email protected] or telephone (02) 9391 9215.

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mailto:[email protected]

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.32.6 3.8 CONTRACT MANAGEMENT 3.8.1 Contract Manager The public health organisation’s contract manager should be appropriately experienced and skilled, and should understand the overall scope and nature of the contract, its primary objectives, and the risks involved. Appropriate contract management systems and procedures should be established commensurate with the size, risk and complexity of the contract. The contract manager must have the necessary authority to administer contractual matters. Effective contract management will ensure the parties meet their contractual obligations and the contract provides value for money. As soon as possible after the award of a contract, the contract manager should convene a contract review meeting with the successful tenderer (now called the supplier), public health organisation representatives and other stakeholders as appropriate. At this meeting, discuss all aspects relating to the performance of the contract to ensure all parties have a common and clear understanding of their responsibilities and obligations. This meeting is important to establish a good working relationship with the supplier, particularly if the contract is to last a few years and to identify any misunderstandings early. Hold contract review meetings during the contract at intervals appropriate to the nature of the contract, and the contracting parties. Particular care is to be applied to ensure that any sub-contracting is done in accordance with the contract and within the scope of the contract.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.33 Contract payments should be made strictly in accordance with the terms of the contract. Be aware of the client’s obligations under Treasury Circular TC01-12: Annual Reports Legislation - Reporting on Payment of Accounts (Does not apply to public health organisations). Under the Gateway Review Process a Pre-commissioning Review can held after a deliverable has been produced but prior to its use by the public health organisations. It would take place after all testing has been completed but prior to rollout of the solution, with the purpose of assessing the state of readiness to commission the project and to implement the change management required. 3.8.2 Ensuring Accountability and Record Keeping Actions and decisions need to be accounted for and, in particular, good record keeping of decisions is imperative for auditing and accountability purposes. Refer to Premier’s Memorandum PM98-16: Records Management Standards and Practices. Effective and efficient contract management cannot be done properly without accurate and organised records. Contract records are kept so that: • clear public accountability can be demonstrated; • regular and accurate reports to management and clients are prepared; and • information is available for the assessment of claims and the resolution of disputes. Comprehensive records should be maintained throughout the purchasing process, eg checklists, evaluation criteria, weightings, decision-making processes and decisions made. These records should provide sufficient information to enable audit and independent review functions to be carried out. An individual file should be maintained for each procurement where possible. Records could include details of telephone conversations wherein any type of commitment etc. is made. Departure from established procedures for purchasing of services should only be for sound, well-documented reasons. These reasons should be approved at a senior level by those not directly involved in the process. 3.8.3 Central Tender and Contracts Database The Central Contracts & Tenders Database is a mandatory system for all public health organisations to utilise. The system provides a standardised registry for tenders released/advertised and for contracts established/formalised. It also enables the public health organisation’s to efficiently record, maintain/update, monitor/evaluate information regarding “in-house” tenders and contracts; and instantaneously obtain other public health organisation information on tenders and contracts with the view of coordinating efforts and/or elimination of duplication; e.g. expiry dates of contacts, synchronisation of start date.

Access to the database is via the HP Website on the DoH Intranet http://internal.health.nsw.gov.au. User access and copies of user guides may be organised by contacting HP.

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CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.34 3.8.4 Resolving issues Any misunderstandings or disagreements should be resolved as quickly as possible. Good contract management and regular clear communication between the parties should solve problems as they arise throughout the term of the contract and minimise the prospect of disputes. For less routine and potentially serious problems the contract should specify a mechanism for resolving issues. It is government policy that, wherever appropriate, alternative dispute resolution techniques are used rather than litigation. 3.8.5 Service Provider Performance The performance of the service provider should be monitored, evaluated and measured against the contract requirements. To help manage the performance of service providers Government agencies should acquire, maintain and exchange appropriate information about the performance of service providers on contract. The Service Provider Performance Management Guideline details the objectives, application and benefits of supplier performance management and exchanging information with other agencies. The benefits of effective performance management for service providers and agencies are significant in terms of obtaining better outcomes, rewarding superior performance, encouraging continuous improvement, assisting in the future design of contracts, and ensuring the terms and spirit of the contract are adhered to, including the commitment to better service delivery. It is advisable for the organisation to have a system for reporting on the performance of its contractors. Formal reports should be prepared: • Evaluating the contracted work outcomes including from the aspect of quality and integrity, • Whenever performance becomes unsatisfactory; • At termination of the Contract; • At regular intervals during the Contract. These reports are designed to assist in: • The assessment of the technical, management and financial capabilities of Contractors; • The assessment of open tenders. Reports should contain information on the following three areas: • Contract details as known at the Date of Acceptance of Tender. These details will not change

during the duration of the contract. • Details of variations in cost and extensions of time. • An assessment on various measures of performance namely: time management, standard of

work, quality assurance, management and quality of site personnel, coordination of subcontractors, consultants and suppliers, contract administration and OHS&R.

Documentary evidence to back up reports must be located on the file with copies attached to the Report or references to minute numbers on a file. Care should be taken not to destroy the file and evidence whilst it is still relevant to a performance report.

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In the case of unsatisfactory performance by a Contractor, immediate action should be taken to address and resolve the problem with the Contractor. This action should be taken at one level removed from the day-to-day management of the contract. If it is proposed to report adversely on a Contractor’s performance, then the Contractor must be given a chance to respond to any criticism of the Contractor’s performance. Access to reports should be limited to those persons or organisations that have a direct need for the information on a particular contract or Contractor. The public health organisation is to ensure that it fulfils all its obligations to the other party or parties. Payments should be timely. Competent staff should be assigned to the role of administering the contract. All staff that has a role in ensuring the success of the contract should be made aware of their responsibilities. 3.8.6 Operation The operation phase covers the use and in some cases maintenance of the good and or service procured. During this phase, monitoring commensurate with the value of the purchase, should be undertaken to ensure the outcomes required for the procurement are met. In cases where service contracts are used, ongoing monitoring of the service provided will need to be undertaken. Operating costs must be controlled, risks managed and flexibility enhanced through maintenance planning. To do so successfully, the public health organisation needs to pursue initiatives that: • Enhance the link between service outcomes delivered to the community and the maintenance of the

assets involved in the delivery; • Establish clear links between maintenance objectives and asset performance; • Resolve uncertainty regarding the disposal of assets; and • Gain the commitment of operational maintenance managers and staff to Maintenance Planning. The Asset Information Guideline and Asset Maintenance Strategic Planning Guideline included within the Total Asset Management Manual offer guidance in maintenance planning. The benefits to public health organisations and Government are: • Assets perform at optimum levels, reducing service disruptions and losses due to asset failure; • Risks to the public health organisation can be identified and ameliorated; • The costs of asset maintenance can be quantified and budgeted with confidence; • The performance of the asset can be reviewed to suit service delivery needs; • The maintenance plan provides a foundation for continuous process improvement; • The plan provides a feedback to improve future application of the maintenance process; and • Reduced environmental impact by controlling resource usage. The public health organisation’s practices in operating its assets should also be consistent with: • Premier’s Memorandum 2003-05: Government Waste Reduction and Purchasing Policy; and • Premier’s Memorandum 98-35: Government Energy Management Policy.

CHAPTER 3 – COMPLEX PROCUREMENT (TENDERING) 3.36 3.8.7 Variations after the contract has commenced Variations to the scope of the work requiring increased payments to the contractor can at times be appropriate as a result of unforeseen circumstances. Particular care is needed to avoid: • variations being used by a successful low bidder to increase the value of the job; • variations being use to get around requirements for competitive bidding, e.g. 3 quotes, tenders; • variations increasing the scope of the contract out of proportion to the original scope. All proposals for variations require very careful consideration, applying the principles of value for money; probity and accountability. Proposals to increase the value of the consultancy by 10 per cent or more demand a particularly thorough review. Apparently “exceptional” cases should be treated very cautiously. Variations to the contract during the progress of the project must be reported without delay and prior approval obtained for any proposed significant changes in work or cost. It is not good practice for approvals for significant changes in work or cost to be given by employees directly involved in the supervision of the contractor. Proposals for such variations are to be considered and determined by an independent senior officer, nominated by the Chief Executive. There can be a number of reasons for variation of the scope of a project after it has commenced, however, the most prevalent reason is a “weak” specification. It is imperative that officers developing specifications either have the necessary experience or obtain expert advice so that comprehensive specifications are developed.

3.8.8 National Product Catalogue Tenders for medical surgical devices/consumables include clauses that promote the use of the National Product Catalogue (NPC). The NPC, as part of a national supply chain initiative, is recognised by all States & Territories as a common approach regarding the source and structure of product and pricing data. In consideration of the extensive process for submitting product data onto the NPC, it is recommended that tenderers who are not familiar with this project be encouraged to immediately seek information (initially by visiting http://www.gs1au.org/services/gs1net). As the submission of product data onto the NPC is mandatory for successful tenderers, immediate understanding of the national project may expedite the data load process.

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Appendix 3-A

GATEWAY REVIEW PROCESS PURPOSE The purpose of the Gateway Review process is to independently assess whether an appropriate level of discipline is applied across the procurement cycle. The process addresses the lack of initial preparation evident in managing major asset procurements which in turn leads to significant time and budget overruns. GATEWAY REVIEW OUTLINE • The Gateway Review consists of a series of structured Reviews that examine procurements at six

key decision points (or gates) in the procurement cycle. These gates are Strategic, Business Case, Procurement Strategy, Tender Review, Pre Commissioning and Post Implementation.

• Initially there is a review of the risk of the procurement. The Risk Profile Assessment is used to

determine risk rating and thereby the level of independence required of Reviewers. • Three categories of risk have been identified (high, medium and low). Typically:

o High-risk procurements will be reviewed by a small team of Reviewers independent of the procurement and the proponent organisation.

o Medium risk procurements will be reviewed by a small team of Reviewers independent of the procurement and at least one person independent of the proponent organisation.

o Low risk procurements will be reviewed by a small team of Reviewers independent of the procurement, but may be from within the proponent organisation.

o The Project Sponsor initiates a Review, receives the findings and determines what action, if any is required to address the recommendations. The Project Sponsor is the senior manager responsible for the procurement, with the authority to make decisions affecting its progress.

• Reviewers are generally senior government employees selected for their relevant expertise in the

particular stage of procurement being reviewed. From time to time expertise may be sourced from outside the government sector where appropriate.

• The Review process is facilitated by the Department of Commerce. Facilitation includes providing

training and support to Reviewers, the Project Sponsor, the Project Team and other stakeholders. It also includes assistance with documentation of the Review report and Review logistics.

• Reviews are held over one to two days following a half-day planning session undertaken a week

prior to the Review. The Review runs as a series of interviews with key stakeholders including Project Team members, technical consultants, planners, senior managers and client representatives.

• At each Review the project is assessed against seven Key Success Factors - affordability, service

delivery, governance, sustainability, risk management, stakeholder management and change management. The underlying rationale for the Business Case is revisited at each gate.


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• All information tabled in the Review is confidential with documentation provided by the Project Team on behalf of the Project Sponsor. It is not intended that documentation be produced especially for the Review. Nor is it expected that Reviewers read in detail all documentation associated with the project. Rather, Reviewers will need to read sufficiently to gain an overview, with enough detail to make an informed judgment.

• The Review report is produced in draft form on the day of the Review and the final report is

provided to the Project Sponsor for appropriate action. Action will range from fine-tuning project details to a decision to take a major change in direction.

BENEFITS The potential benefits include: • More accurate project scoping and estimates • Reduced time and cost overruns • Improved alignment of service delivery with available funds • Improved procurement discipline • Better risk management • Reinforcing agency responsibility and accountability for decisions GATEWAY RISK PROFILE ASSESSMENT TOOL The Gateway Review Process is applied based on an assessment of a procurement’s potential risk profile. This assessment goes beyond simple financial thresholds to consider issues such as: • impact the procurement will have on the agency’s service delivery • level of integration the project requires with other initiatives • amount of experience an agency has with similar procurements • level of expertise available in the marketplace • degree of innovation involved in the procurement solution • complexity of the procurement method Gateway can then be targeted at complex and risky procurements that would benefit from increased scrutiny. An online tool has been developed to assist agencies to complete the assessment quickly and easily. The tool calculates an indicative risk score based on the options selected. APPLICATION • The process applies to all procurement, including built infrastructure, information and

communications technology (ICT), services and capital equipment. • Reviews will be mandatory at the Business Case Gate for all high risk procurements and other

procurements valued at $10 million or more ($5 million for ICT). • Agencies are encouraged to apply the other five Gateway Reviews to their procurements. The

decision to complete one of these gates should be based on the risk profile of the procurement and the Project Sponsor’s understanding of how the procurement is progressing. For these gates it is recommended that agencies have:


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o a small team of people independent of the project and proponent organisation review high risk projects;

o a small team of people independent of the project and a least one person independent of the proponent organisation review medium risk projects;

o agencies review their processes to ensure they are aligned with Gateway for low risk procurements.

• Business Case Gateway Reviews will be linked to the Budget process by agencies submitting a

copy of their review to Treasury with any bid for capital funding. THE RULES Treasury will support the process by: • Making suitable officers available as Gateway Reviewers. • Funding the Department of Commerce in its facilitation, system development and maintenance role. Agencies will: • Undertake the Risk Profile Assessment for all procurements over $1M and include them with their

routine submissions to Treasury as required. • Ensure appropriate Project Sponsors are appointed. • Undertake Business Case Reviews as a minimum, on all high risk procurements and other

procurements valued at $10 million or over ($5 million for ICT). • Take responsibility for Review findings. • Make suitable officers available as Gateway Reviewers. • Link Gateway Reviews at the Business Case stage with the budget process as required. Department of Commerce will: • Maintain, develop and promulgate information about the Gateway Review Process. • Maintain the database of Reviewers for the mandatory Business Case Review. • Manage Reviewer training and support agencies in Reviewer selection. • Facilitate Reviews. • Refine the Review methodology to account for lessons learned. COVERAGE The mandatory Business Case Review: • Applies on a whole-of-government basis to all government departments, statutory authorities, trusts

and other government entities. • Does not apply to State Owned Corporations subject to the State Owned Corporations Act. IMPLEMENTATION • The Gateway Review process commences 1 July 2004.


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THE SIX GATES The six gates in the procurement process are indicated below.


Appendix 3-B

PURCHASING POLICIES 1. New South Wales Government Purchasing Policies 2. NSW Government Preference Scheme 2.1 Preference – Australian and New Zealand Content 2.2 Government Procurement Agreement 2.3 Country Industries Preference Scheme (CIPS) 2.4 Post Tender Negotiations 2.5 M inisterial Discretion 3. Country Industries Scheme Information To Applicants 4. Country Industries Preference Scheme application For Registration

Treasury Circular TC07/18 Procurement Economic Development Guidelines Amendment to the Price Preference Schemes states the Procurement Price Preference Schemes, comprising the Australia New Zealand Price Preference Margin and the Country Industries Preference Scheme, will cease to apply to large enterprises (as defined by the Australian Bureau of Statistics*) effective 1 January 2008. This is consistent with NSW obligations under the Australia United States Free Trade Agreement.

*The Australian Bureau of Statistics categorises a large business enterprise as a business employing 200 or more people.

TC07/18 is available from the NSW Treasury website: http://www.treasury.nsw.gov.au/nswtcir

NEW SOUTH WALES GOVERNMENT PURCHASING POLICIES The general intention of the NSW Government purchasing policy is to promote employment and industry development in Australia and New Zealand. The Government gives direct effect to this policy by ensuring that Australian and New Zealand suppliers receive preference in Government contracts. The organisation is to ensure that: • the above policy is adopted. As a consequence all government departments and declared authorities have been directed to: • adopt this policy in all their purchases; • ensure that agents, consultants and others acting on their behalf adhere to the same policy; • ensure that specifications and other tender documents are drafted in such a way as to favour locally

sourced goods and services; • selection of a Contractor is based on consideration of all competitive proposals in accordance with the

request for tender and specifications and one of the key aspects of this selection process should be the conformity to NSW Government purchasing policy in relation to preference for Australian and New Zealand goods and services.

The organisation should be aware that: • Any Australian or New Zealand supplier feel that they have been excluded from tendering or recognize

in any way by contract terms or specifications in this tender/quotation have to right to write in confidence to the Chief Executive Office of Economic Development Premier’s Department.

• For tenders exceeding $100,000 the “responsible” Minister: • Can authorise post tender negotiations; and/or • Exercise Ministerial discretion; in favour of an Australian tender where the Minister believes

circumstances would warrant such intervention.

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NSW GOVERNMENT PREFERENCE SCHEME (See Appendix 3-B1 for details concerning the Australia-United States Free Trade Agreement)

Preference – Australian and New Zealand Content The NSW Government Procurement Policy mandates departments and declared authorities to apply a price preference to goods (and related services) of Australian and New Zealand origin. The scheme requires that a 20% price preference margin be applied to the imported content of all tenders where local manufactured content is claimed by any tenderer. The 20% margin is added to the tendered prices of goods (and related services) with a declared imported content prior to a comparison of prices as part of the tender evaluation process. For example:

Tendered price: $l0.00 Imported content: 80% Preference margin: 20% x 80% x $l0.00 = $l.60 Price used for evaluation: $l0.00 + $1.60 = $11.60

No preference margin is applied when assessing tenders for the provision of services alone (ie. Unrelated to goods). It is a condition of tendering that tenderers are required to provide details of the imported (non Australian & New Zealand content in their tenders and to make available records (as necessary and when required) to substantiate imported/local content claims. Tenderers should also include detailed statements from their sub contractors on the imported content of the goods and related services they are offering. The imported content of goods and related services is: • the estimated duty paid value, inclusive of the value of any services, eg. overseas freight and

insurance, consultancy or engineering effort, or any charges of overseas origin, together with customs clearing charges.

Related services include architectural deign, design engineering, project design, project management and related consultancy/professional services provided in conjunction with the supply of goods or construction activities. Suppliers should note that New Zealand content is regarded as local content and should not be included as imported content for the purposes of this scheme. However, goods not manufactured in New Zealand (imported) and offered in a tender are not considered New Zealand goods. Goods partly manufactured in New Zealand can claim local content based on the value of local manufacture. Country Industries Preference Scheme (CIPS) NSW country manufacturers may be eligible for an additional preference of 2.5% or 5%, depending on location in NSW, under the Country Industries Preference Scheme (CIPS) when: • the supplier is a registered country manufacturer; • the supplier quotes their registration number and the applicable preference margin in their

tender;

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• the goods being sought are those for which the supplier/country manufacturer is registered; and • the supplier is tendering as the prime contractor. The ClPS preference is added to the tendered prices of all other tenders after the application of the 20% preference margin against overseas content, as follows: • If a metropolitan New South Wales or overseas manufacturer (except New Zealand) is the

preferred tenderer after the application of the Australian and New Zealand preference, and offers/tenders have also been received from:

an approved New South Wales country manufacturer located outside the County of Cumberland, the cities of Newcastle, Wollongong, Penrith and Liverpool, the Council of Camden and the councils and cities listed below under (ii) and/or

an approved New South Wales country manufacturer located in the Councils of Port Stephens, Wyong, Wollondilly and Wingecarribee, the cities of Gosford Lake Macquarie, Maitland, Cessnock and Blue Mountains, and the councils of Shellharbour and Kiama

a further New South Wales country preference surcharge shall be applied. In this case a preference of 5% is added in favour of (i) above and 2.5% in favour of (ii) above, over all other New South Wales and overseas manufactured goods.

• If an interstate or New Zealand supplier is the preferred tenderer after the application of Australian

and New Zealand preference, no New South Wales country industries preference will be applied. To claim preference under ClPS, NSW country manufacturers must be registered with the Department of State and Regional Development. Information and forms are at Attachment A. Post Tender Negotiations The preference scheme takes cognisance of the fact that Government tendering procedures may, in some cases, result in contracts being let by fine margins to overseas companies, over Australian companies. The scheme therefore, makes provision for Australian companies to obtain the contract and thereby increase employment of Australian workers. If, where tenders in excess of $100,000 are received, and after application of the preference loadings, an Australian tender is still not the lowest, but is within 20% of the lowest tender (before application of preference), the Minister responsible for the tendering agency may determine that negotiations be entered into with one or more of the Australian tenderers, with a view to an Australian tenderer being given the opportunity to reduce the tendered price.


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Ministerial Discretion The preference scheme also recognises that the fundamental principle guiding government procurement is to achieve best value for money when spending public funds. Factors such as technical performance, delivery, maintenance, interchangeability, and the NSW Governments wider economic development and social objectives detailed in the NSW Government Procurement Policy will each have a significance in the evaluation process alongside the price aspect. With this in view, an element of Ministerial discretion is built into the scheme to enable the Minister responsible for the tendering agency to make the final decision, where significant purchases are involved. In respect of all contracts having a value of $l00,000 or greater where, after the application of the above schemes, an Australian manufacturer is being passed over, the Minister responsible for the tendering agency is to be advised. Ministerial discretion may then be exercised in favour of the Australian tender, if the Minister believes the circumstances so warrant. Further Information For further information about the preference scheme contact:

Regional Development Division State & Regional Development Level 44 Grosvenor Place 225 George St SYDNEY NSW 2000 Phone: (02) 9338 67l7 Facsimile: (02) 9338 6726


COUNTRY INDUSTRIES SCHEME

INFORMATION TO APPLICANTS The COUNTRY INDUSTRIES PREFERENCE SCHEME was introduced by the NEW SOUTH WALES GOVERNMENT in 1970 as a means of providing a further measure of assistance to the state’s country manufacturing industries. The Scheme is intended primarily to benefit manufacturers located outside the metropolitan areas of the State which, in comparison with their city-based competitors, suffer definable economic disadvantages which can be directly attributed to their country location. Of necessity, therefore, the application for preference must be subject to various qualifications and limitations and these are set out hereunder as a guide to those companies seeking to participate in the Scheme: 1. The preference applies on the following basis to approved manufacturing industries located

outside the county of Cumberland, the Cities of Newcastle, Wollongong, Penrith and Liverpool and the Council of Camden:

2. In the Cities of Maitland, Greater Cessnock, Blue Mountains, Lake Macquarie, Gosford and

Shellharbour, and the councils of Kiama, Port Stephens, Wyong, Wollondilly, Wingecarribee and that part of the Council of Hawkesbury which was previously part of the Shire of Colo.

Maximum preference of 2.5%

3. Elsewhere in NEW SOUTH WALES.

Maximum preference of 5% 4. The preference applies only to the cost incurred in the manufacture of goods at the country

factory and does not extend to any costs associated with installation, assembly and/or erection on site.

5. Preference eligibility will be granted only for such a range of specific goods as the applicant

manufacturer can demonstrate are WHOLLY or SUBSTANTIALLY manufactured at the country establishment.

6. Preference eligibility will be granted only to such country manufacturers as can demonstrate

that in comparison with their city-based competitors, they suffer a definable economic disadvantage which is directly attributed to the country location.

7. The preference will be applied to purchase. Effected by all New South Wales Government

agencies (ie, government departments statutory authorities and other entities). 8. The preference will be applied as a variable margin of up to a maximum of 5% (2.5% in respect

of the areas specified in l (a) above) in favour of an eligible country manufacturer over metropolitan – based manufacturers only after determination of the basic order of tendering in accordance with the practice usually followed by the particular department or authority concerned where applicable. The preference to approved country manufacturers applies in addition to the general preference accorded to Australian and New Zealand manufacturers competing with overseas manufacturers.

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9. The preference will be applied only in instances where an eligible country manufacturer:

i. is offering goods of the specific nature in respect of which eligibility has been granted;

ii. specifically draws attention to his eligibility in his tender and is able to quote his formal PREFERENCE REGISTRATION NUMBER;

iii. is tendering in the capacity of a prime contractor for the supply of the goods in question;

iv. submits a tender in competition with a NSW city manufacturer who would normally win the

contract;

v. offers goods which are considered by the purchasing department or authority to be of a satisfactory quality and specification.

PROCEDURE FOR REGISTRATION Country manufacturers seeking to participate in the Scheme are required to complete in full (attaching a separate sheet where space is insufficient) the attached APPLICATION FOR REGISTRATION form and return to:

FINANCIAL ASSISTANCE OFFICER COUNTRY INDUSTRIES PREFERENCE SCHEME DEPARTMENT OF STATE & REGIONAL DEVELOPMENT PO BOX N818 GROSVENOR PLACE SYDNEY NSW l220

Country manufacturers eligible for registration will be given PREFERENCE REGISTRATION NUMBERS which must be specifically quoted in any tender submitted to the Government Authority in respect of which the application of preference is sought.


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COUNTRY INDUSTRIES PREFERENCE SCHEME

APPLICATION FOR REGISTRATION 1. Name and business address of country manufacturing enterprise:

Name _________________________________________________________

Address _________________________________________________________

_______________________________________Postcode_________ 2. Address of country establishment where products –in respect of which preference is sought are

manufactured Address _ ________________________________________________________

__________________________________________Postcode________

City/Council ___ ____________________________________

Phone No. __________________ Fax No. ____________________

3. Date of commencement of manufacturing activities at the country establishment. 4. Location of any other manufacturing establishments operated by enterprise: 5. If your enterprise is a holding company, a subsidiary or an associate of another company, state the

company concerned, the location of its manufacturing establishments and the address of its head office.

6. List products manufactured at the country establishment in respect of which preference is sought: 7. State the approximate value added (ie labour/overheads) at the country establishment by your

enterprise in the manufacture of its products.

% Ex-factory price (excl profit) 100

LESS cost of materials/components parts _______

Approximate value added in terms of labour & overheads _______


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8. List sources of major raw materials and/or component parts brought into the country establishment by your enterprise for the manufacture of the products in respect of which preference is sought.

Raw Material/Component Source ( ie local, Ex subsidiary,

metropolitan, associate or another interstate, overseas establishment of enterprise

9. Briefly list the factors which you consider place your enterprise at an economic disadvantage

compared to metropolitan competitors and which can be claimed to be directly attributable to a location in a country area:

10. Has your enterprise previously tendered successfully for the supply of goods to a NSW

Government department or authority?

YES/NO If YES details should be furnished.

STATUTORY DECLARATION I, ....................................................................the........................................................................

Name Title/Designation of ................................................................................................................................................

(Enterprise) do hereby solemnly declare and affirm that the answers to the questions and statements made in this application are true and correct in every particular and that the products in respect of which preference is sought are manufactured at the country establishment and would in respect of any Government contract awarded, be supplied from that establishment.

................................................................ S ignature of Declarant.

Taken & declared at................................in the State of New South Wales this ........................ ...............................day of.............................one thousand nine hundred and ..........................

Before me: ...................................................J.P


Appendix 3-B1

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Appendix 3-C BETTER PRACTICE GUIDELINES FOR INCLUDING HEALTH AND SAFETY IN THE ENGAGEMENT, MANAGEMENT AND EVALUATION OF CONTRACTORS IN HEALTH SERVICES (PD2005_227) This circular applies to public health organisations as defined under section 7 of the Health Services Act 1997 (including Area Health Services, Corrections Health Service, and the Children’s Hospital at Westmead), the Department of Health, and the Ambulance Service of New South Wales. The Guidelines outline the NSW Health policy for including health and safety principles in procedures for engaging, managing and evaluating contractors in Health Services. They aim to assist Health Services recognise the risk of injury or occupational illness to contractors, employees, visitors and others in the workplace that may arise from the presence of contractors on the premises. The document incorporates an OH&S risk management approach to contractor management, and provides a framework for local procedures in compliance with current OH&S legislation. Health Services are to develop and implement OH&S procedures for contractor management within their Health Service based on the Guidelines and local needs. Inquiries in relation to this circular should be directed to Health Service Risk Managers. Only Risk Managers should contact the Department. OCCUPATION HEALTH & SAFETY Who is a contractor? A contractor is an individual, organisation or legal entity engaged under a contract for services to perform any work, provide any service, or supply any goods at an agreed price or rate. For the purposes of this document, examples of the work or services undertaken by contractors may include cleaning, all types of repair and maintenance, medical (eg agency nurses, Visiting Medical Officers), consulting and construction. Contractors are not employees. There are certain features, which distinguish the two types of worker under the law. An employee performs work under the control of another person (the employer) in exchange for payment. The relationship is that of a contract of service. This relationship is contrasted with a contractor relationship, which is usually referred to as a contract for services. In this case the employer hires a contractor for a service but may not have control over who performs the work, over their work conditions (such as hours, breaks, etc.) or, in many cases, over the manner in which the work is performed. Some additional features that may indicate a worker is a contractor include the following: 1. The worker carries his/her own tools or equipment 2. The worker is free during the engagement to perform similar work for others, 3. The nature of the worker’s involvement carries a risk of financial loss or opportunity to make a

profit from the work, and 4. The worker charges for his/her services by supplying an invoice (rather than receiving wages) and

is generally responsible for the payment of tax.


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In cases of staff hired through employment agencies, an essential element is the contract of engagement. Usually no contract exists between the host company and the worker. The worker may work for several host companies over a period of time and may have a relationship with several employment agencies. The management of Health Services is responsible for determining whether an individual would be considered a contractor or an employee, and applying relevant policies and legislation accordingly. In this document, the word “contractor” refers to the principal contractor, their employees, their sub-contractors, and the sub-contractors’ employees. Who has the responsibility for OH&S issues? Some employers erroneously believe that they can delegate their OH&S responsibilities by engaging contractors to undertake hazardous work that would otherwise be done by employees. Many employers also believe that where they do not have direct control over the manner in which the work is performed or the service is supplied (particularly where trades persons or other professionals are involved), they also delegate their OH&S responsibilities. However, given the employer’s need to show due diligence, health facilities cannot point to contractors as having sole responsibility for health and safety. NSW OH&S legislation imposes simultaneous obligations on a variety of persons and entities who have control over a workplace. These obligations cannot be delegated. Recent court decisions in NSW have demonstrated that employers who retain contractors remain liable for ensuring that the contractors’ employees (and sub-contractors) are not exposed to risks to their health and safety while at the employer’s workplace. In turn, contractors as employers themselves, have a responsibility to ensure the health, safety and welfare of their own employees. Key legislation The Occupational Health and Safety Act 2000 and the Occupational Health and Safety Regulation 2001 are based on the concept of duty of care relating to the health, safety and welfare of persons at work, including contractors. Part 2, Division 1 of the Act sets out the duties of employers, self-employed persons, controllers of work premises, designers, manufacturers and suppliers relating to health, safety and welfare at work. In particular: 1. Section 8(1) requires the employer to ensure the health, safety and welfare at work of their

employees; 2. Section 8(2) requires the employer to ensure that other persons are not exposed to risks to their

health or safety arising from the employer’s undertaking while they are at the employer’s place of work; and

3. Section 10 provides that persons having control of premises used by people as a place of work must ensure that the premises are safe and without risks to health.


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All duty holders must take all practicable steps within their control to secure the safety of any contractor engaged to carry out work, and of the premises, plant or substances used. The Act also includes a requirement for employers to consult employees on any risk assessments, decisions, and new or altered procedures relating to their health and safety at work (Part 2, Division 2). The legislation includes a requirement for ongoing risk management (Chapter 2 of the Regulation). All employers (and other parties) must ensure that all risks to health and safety at a place of work are identified, assessed and eliminated or controlled. Such risk management forms the basis of contractor management. The legislation requires the notification of accidents, death and certain other occurrences to WorkCover (section 86 and 87 of the Act and Part 12.1. of the Regulation). Such other occurrences include an injury that will prevent the person from attending the person’s usual place of work for a continuous period of at least seven days. Incident Report Forms are available from WorkCover NSW. The contract should clearly state who would be responsible for notifying WorkCover NSW under section 86 of the Act. Legislative liability Occupational Health and Safety legislation applies to all places of work in NSW and an employer who has not taken adequate steps to eliminate or reduce risks can be penalised for not complying with the legislation even if no injury has occurred. The maximum fine for corporations for a breach of sections 8, 9, 10, or 11 of the Occupational Health and Safety Act 2000 is currently $550,000 (first offence) and $825,000 (subsequent offences). Directors and managers of corporations, as the employer’s representatives in the workplace, may face a penalty of up to $55,000 (first offence), or $82,500 or imprisonment for two years or both (subsequent offences). For the purposes of the Occupational Health and Safety Act, Health Services are corporations. Glossary A number of terms will be in regular use in these guidelines and are defined here for convenience of reference: 1. Contract – an agreement between two or more parties. 2. Contractor pre-qualification – a systematic procedure for screening the health and safety

practices and culture of organisations or individuals that supply plant and equipment, human resources, or services. In this way, a pool of preferred contractors can be established.

3. Due diligence – the use of all reasonable foresight and care in the planning and conduct of activities to protect the health, safety and welfare of everybody in the workplace.

4. Hazardous Work – any work that has the potential to harm the health and safety of a person. 5. Health Service – for the purposes of this document, “health service” refers individually to the

NSW Department of Health, public health organisations as defined under section 7 of the Health Services Act 1997 (including Area Health Services), and the NSW Ambulance Service.

6. NSW Health – for the purposes of this document, “NSW Health” refers collectively to the NSW Department of Health, public health organisations as defined under section 7 of the Health Services Act 1997 (including Area Health Services), and the NSW Ambulance Service.


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7. Risk management – a logical and systematic process of identifying, assessing, controlling or eliminating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organisations to minimise losses and maximise opportunities.

8. Risk assessment – a crucial component of risk management, the process of estimating the magnitude of risk exposures and deciding the urgency with which they are to be controlled.

9. Safe Work Method Statement – a written statement, based on a risk assessment, clearly stating the safest way to do the task; to be prepared by a contractor for all hazardous work.

NSW HEALTH POLICY About this section This section states the NSW Health policy for the engagement, management and evaluation of contractors and sets out 9 principles for good practice. Policy Each Health Service is to ensure that risks to health and safety at the workplace are identified, assessed, and eliminated or controlled so that: 1. The health and safety of employees, patients, visitors and others will not be put at risk by the

activities of contractors in the workplace; and 2. A safe place of work is provided for contractors working in Health Services. Principles for contractor engagement, management and evaluation Each Health Service is to develop and implement procedures for engaging, managing and evaluating contractors. Implementation of these procedures should be commensurate with the foreseeable level of risk of each case. The procedures shall have provision for the following principles of:

1. Contractor Engagement a. Conducting and documenting an OH&S risk assessment before work commences; b. Including in contract documentation the facility’s OH&S requirements and a clear definition

of the contractor’s OH&S responsibilities; and c. Assessing, before engagement, the contractor’s capability and suitability to carry out the

work in a manner that is safe and without risks to health. 2. C ontractor Management

a. Ensuring that induction and ongoing training is provided as necessary according to the degree and type of risk to which contractors may be exposed while on the Health Service’s premises;

b. Communication and consultation between the Health Service and contractors on OH&S issues; and

c. An ongoing process for monitoring and managing the contractor’s compliance with OH&S statutory requirements, and the OHS requirements imposed in the contract, while on the Health Service’s premises.

3. Contractor Evaluation

a. A post-engagement performance review, which includes OH&S criteria and a Register of Injuries;


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b. Compiling criteria, which include OH&S considerations, for a List of Preferred Contractors; and regular evaluation of the effectiveness of the procedures for contractor management.

ACCOUNTABILITIES NSW Department of Health The NSW Department of Health is responsible for: 1. Setting policy direction for the health and safety of all staff employed in Health Services; and 2. Establishing procedures for the engagement, management and evaluation of contractors on the

Department of Health premises. Chief Executives Chief Executives are responsible and accountable for ensuring: 1. The implementation of a contractor management program in their facilities which is consistent with

the objectives of NSW Health; 2. The development of local procedures which complement the NSW Health policy; 3. Evaluation and monitoring of local contractor management procedures; 4. Consultation with employees on any OH&S decisions by means of an OH&S Committee or OH&S

representative in accordance with Part 2, Division 2 of the Occupational Health and Safety Act 2000; and

5. Reporting outcomes to the appropriate CE or the Director-General. Managers, supervisors and team leaders Managers, supervisors and team leaders, or other controllers of work premises, are responsible and accountable for: 1. The effective implementation, promotion and support of the contractor management procedures in

their areas of responsibility. This includes participation in monitoring contractor OH&S performance against the facility’s contractual requirements and the post-contract evaluation process;

2. Ensuring staff under their control are made aware of contractor management procedures and possible hazards which may arise from the presence of contractors in the work place;

3. Taking appropriate action when hazards related to the presence of contractors in the work place are reported or unsafe situations are observed; and

4. Acting promptly to resolve any OH&S issues or disputes concerning contractors at the facility. Risk Management Staff Risk management staffs are responsible for supporting and advising relevant managers to ensure OH&S input in all phases of contractor engagement and management.


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Occupational Health & Safety Committees Occupational Health and Safety Committees are responsible for: 1. Providing a channel of communication for employees with concerns about contractors in the work

place; and 2. Monitoring and reviewing health and safety issues related to the presence of contractors in the

workplace (including risk assessments, decisions about measures to eliminate or control risks, new or changed procedures, etc.).

Employees Employees are responsible for: 1. Participating in the consultative process; 2. Cooperating with the employer to enable compliance with occupational health and safety

requirements; 3. Taking re asonable c are fo r the h ealth a nd safety o f oth ers, inclu ding visitors, at the e mployer’s

place of work; and 4. Immediately reporting to their supervisors any concerns relating to the safety of themselves, other

facility staff, visitors, patients or the contractors.


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ENGAGEMENT OF CONTRACTORS About this section This section describes the guidelines for policies and procedures that Health Services must put in place to meet the needs of the following principles of contractor engagement as outlined in Section 2: 1. Conducting and documenting an OH&S risk assessment before work commences; 2. Including in contract documentation the facility’s OH&S requirements and clear definition of the

contractor’s OH&S responsibilities; and 3. Assessing, before engagement, contractor’s capability and suitability to carry out the work in a

manner that is safe and without risks to health. OH&S risk assessment A risk assessment should be undertaken to: 1. Identify all foreseeable risks to contractors and others in the workplace (employees, visitors,

patients etc) arising from the presence and/or activities of contractors in the workplace (including the likelihood of environmental risks such as chemical spills); and

2. Identify all foreseeable risks to the health and safety of contractors arising from the activities of the facility.

The Health Service and/or the contractor may carry out the risk assessment. For the risk assessment to be valid, sufficient detail about how and when the work will be undertaken must be available. If the contractor is to conduct the risk assessment, the Health Service must identify beforehand any specific risks and requirements to be considered in the assessment. Depending on the type of the contract, such risks may include, but are not necessarily limited to: 1. Improper conduct in relation to children or other patients 2. Manual handling incidents 3. Medico-legal risks 4. Product or service liability 5. Dangerous goods or chemicals 6. Increased fire risk, noise and/or dust 7. The presence of heavy vehicles and mobile plant, increased vehicular traffic 8. D isposal of waste 9. Security risks including the possible disconnection of warning systems 10. The presence of asbestos 11. Co nfined spaces 12. Buried pipes, concealed wires, etc. Requirements include, but are not necessarily limited to: 1. Satisfactory criminal record checks 2. Licences or qualifications 3. W arranties 4. Safety isolation procedures


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5. Permit to work procedures 6. Sig nage 7. Person al Protective Equipment Health Services must be satisfied that the contractor is capable of conducting an adequate risk assessment, and must sign off on the assessment once it has been completed. Any control measures already in place for the hazards identified also need to be reviewed to determine whether they will be affected by the presence of contractors at the facility. The lift-out work-sheet in the WorkCover NSW Hazpak, A practical guide to basic risk management is designed to assist in conducting risk assessments. Contract documentation Contract documentation should be commensurate with the work being undertaken/service provided and the level of foreseeable risk. It is essential that contract documents clearly state the responsibilities of both parties. As a guide, contract documentation may include the following, depending on the risk assessment: 1. Statements of OH&S requirements that must be complied with 2. Statements that reflect the outcome of the OH&S risk assessment(s) 3. A requirement for a Project Safety Management Plan, a Health Service (Site) Specific Safety

Management Plan or Safe Work Method Statement(s) depending on the contract’s value or complexity;

Note: Instructions on how Project Safety Management Plans, Site Specific Safety Management Plans and Safe Work Method Statements should be presented are set out in the NSW Government Booklet “How to prepare Site Specific Safety Management Plans and Safe Work Method Statements”. This is available at http://www.cpsc.nsw.gov.au/ohsr . 4. Procedures for ongoing risk assessment during the contract; 5. A requirement for adequate personnel, resources and supervision to do the job safely; 6. A requirement for the contractor to have procedures for the recruitment, control and monitoring of

sub-contractors; 7. Induction and training requirements; 8. References to facility safety rules and emergency procedures; 9. Contractor licences, mandatory training requirements and registration details; 10. Provision of equipment eg personal protective clothing; 11. Level of insurance cover required and verification of insurance coverage in such areas as workers’

compensation, motor vehicle and third party property damage, professional indemnity and public liability;

12. Procedures for on-going consultation and communication between the Health Service and the contractor(s);

13. Provisions for monitoring and managing OH&S compliance, including issue resolution procedures; and

14. A written system for reporting accidents and incidents, consistent with legal reporting requirements.


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For construction sites, contract documentation should also clearly define the construction site, and state which parties have care, custody and control over the work site, and when and under what circumstances responsibilities change (eg hand over at completion). A checklist containing key OH&S requirements for consideration when preparing contract documentation is included at Appendix A. Contractor capability assessment When assessing contractor suitability it is advisable to prepare a matrix of OH&S issues based on the findings of the risk assessment and the requirements written into the contract. Responses of the contractor to each of the risk assessment issues and the essential requirements of tender documents should be examined individually and assessed, for example Satisfactory, Unsatisfactory or Not Applicable. Weightings may be advisable if necessary to distinguish the importance of particular issues. Assessment should also include a review of the contractor’s incident/accident/injury statistics, as well as Prohibition or Improvement Notices issued and prosecutions initiated by WorkCover in the previous three years. If the contractor has supplied references, the organisation(s) concerned should be contacted and questioned as to the overall OH&S performance of the contractor. Networking within the public health care system and/or the NSW Health Intranet is another possible source of information. When assessing contractor suitability Health Services must, as a minimum, check the contractor’s training records and sight licences and other qualifications. Some major building contracts are managed by the Department of Public Works. In these instances, Health Services may have little control over the selection of contractors. However, they still maintain certain OH&S responsibilities under the legislation. MANAGEMENT OF CONTRACTORS About this section This section describes the guidelines for policies and procedures that Health Services must put in place to meet the needs of the following principles of contractor management, as outlined in Section 2: 1. Ensuring induction and ongoing training as necessary is provided according to the degree and type

of risk to which contractors may be exposed while on the Health Services premises; 2. Communication and consultation between Health Service management and the contractors on

OH&S issues; and 3. An ongoing process for monitoring and managing the contractor’s compliance with OH&S

statutory requirements, and the OH&S requirements imposed in the contract, while on the Health Services premises.


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Contractor induction and training In accordance with the new OH&S legislation, an employer must ensure that any person who may be exposed to a risk to health and safety at the employer’s place of work is provided with any information, instruction and training necessary to ensure the person’s health and safety. It is important that contractors undergo induction by the facility before they are permitted to commence work. The induction must be appropriate to the type and severity of hazards that they may encounter while at the facility. The nature and scope of induction will depend on: 1. The nature and severity of the hazards identified by the risk assessment; 2. The task activities in which the contractors are to be engaged; 3. The nature of the work environment; 4. The equipment which is to be used; 5. The skills and experience of the contractors; and 6. The length of time that those being inducted will spend on the premises. The issues addressed at induction and follow-up training may include: 1. Permit to work systems (see Appendix 3-D) and isolation procedures; 2. Sign in and sign out procedures; 3. Fire and emergency procedures; 4. Manual handling policy, procedures and rules; 5. Infection control policy, procedures and rules; 6. Familiarisation with equipment; 7. Injury treatment and hazard reporting procedures; 8. Overview of relevant safe work method statements; 9. Other relevant facility specific safety rules; and 10. Work in progress barriers and signs. Communication and consultation Good communication between Health Service management and the contractor(s) is vital so that OH&S concerns on both sides can be addressed. Protocols for regular meetings should be set out in the contract. The extent and level of ongoing communication depends on the size, scope and nature of the contract. The facility and the contractor should each nominate a responsible person to supervise the OH&S and other requirements of the contract. The nominated persons will act as the respective points of contact for all complaints and other problems, which are raised by the facility’s or the contractor’s employees and work together to resolve them. If no solution can be agreed within their level of authority, it is their responsibility to refer the problem to senior management for resolution in accordance with the issue resolution procedures set out in the contract. The responsibilities of their roles should be clearly stated for the benefit of all concerned.


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Monitoring and managing compliance The Health Service must ensure that the contractor(s) on site are appropriately supervised/monitored. This may involve some or all of the following: 1. A pre-work check (eg of safety equipment and tools) immediately prior to work commencing; 2. Confirmation of the contractor’s understanding of how the work is to be carried out immediately

prior to work commencing; 3. Regular or periodic checks; 4. A post-work check. The aim is to ensure that the contractor(s) are carrying out their work in a safe manner. Some OH&S issues that may need to be monitored on an ongoing basis are: 1. The effectiveness of the Project Safety Management Plan, the Facility (Site) Specific Safety

Management Plan, or the Safe Work Method Statement(s) as appropriate 2. Adequacy of workforce, resources and supervision to do the job safely 3. Ind uction attendance records 4. Current and relevant licences and registrations 5. Compliance with safety rules, safe work practices and emergency procedures 6. Key facility policies, eg on security, manual handling, smoking, use of alcohol and other drugs, etc 7. Utilisation of hot work/working at height/confined space entry permits 8. Wearing of personal protective equipment 9. Following facility sign in/sign out procedures 10. Wearing visitor or contractor badge 11. Reporting incidents and accidents 12. Facility speed limits, and 13. General cooperation eg participation in evacuation exercises. All deficiencies found during monitoring must be raised with the contractor’s or sub-contractor’s employee and brought to the attention of the responsible person (see Communication and Consultation above). Any identified shortcomings in contractor or sub-contractor employee behaviour must be notified immediately to the nominated contractor or delegated representative. Strategies must be put in place, in consultation with the contractor(s), to rectify any problems. It is important that a checklist or other form be developed for this purpose and filled out on each occasion that monitoring takes place. These records will be needed during the post engagement contractor evaluation (see Evaluation of Contractors Section).


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EVALUATION OF CONTRACTORS About this section This section describes the policies and procedures that Health Services must put in place to meet the needs of the following principles of contractor evaluation, as outlined in Section 2: 1. A post-engagement performance evaluation, which includes OH&S criteria; 2. Compiling criteria, which includes OH&S considerations, for a List of Preferred Contractors; and 3. Regular evaluation of the effectiveness of the procedures for contractor management. Post-engagement performance evaluation When the contract is completed the Health Service should evaluate the contractor’s OH&S performance with the objectives of: 1. Determining whether the contractor would be considered for future work, and 2. Providing feed-back to the contractor. This process should be formally documented. It will normally consist of examination of all the check-lists or other documents completed during the monitoring process; any records of complaints by Health Service employees (e.g., through the OH&S Committee); and consultation with other managers who may have been affected by or involved in the contract work. It is important that OH&S performance requirements set by the Health Service be measurable so that subjectivity is avoided. The contractor should be advised officially of the outcome of the post-engagement evaluation. If the outcome is favourable, the letter should advise that the contractor has been placed on the facility’s List of Preferred Contractors. If the outcome is unfavourable, the advice should be supported with documentation such as a list of the facility’s OH&S requirements with which the contractor consistently failed to conform or which required constant reinforcement by Health Service managers. Criteria for compiling a List of Preferred Contractors Criteria for compiling a List of Preferred Contractors will include a number of aspects eg completion to time, completion on budget, value for money, technical expertise and reliability. This section is devoted only to OH&S aspects. In defining the criteria, it is important that subjectivity is avoided and only measurable OH&S performance indicators are included. Measurable performance indicators will usually be based on the OH&S requirements of the contract.


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Some examples are: 1. Weekly workplace hazard and safe work practice inspections were carried out on time; 2. All contractor employees were provided with induction and training before starting work on the

site; 3. Personal protective equipment was worn whenever necessary; 4. Safe work method statements were provided; and 5. Injury investigation reports were provided within the timeframe required, and notifications of

corrective actions were completed on time. Regular evaluation of contractor management procedures Good management procedures require that documented systems and procedures be reviewed at regular intervals to: 1. Ensure that they are working satisfactorily; and 2. Ensure that they are being followed. If the Health Service already has a review system in place, its contractor management procedures should be included in this system. Otherwise, they should be reviewed on a three-yearly basis. In addition to a three yearly review, it is good management practice to review procedures after they have been used for the first time or when any shortcomings are identified in practice. The post-engagement performance evaluation (previously described) is a further occasion on which the need for a review of contractor management procedures may be identified. A review process should be formulated and involve appropriate managers/supervisors and other staff directly involved in managing contractors. Organisations already on the Health Service’s List of Preferred Contractors should be formally advised of any changes to procedures or OH&S requirements that may affect them in future contacts and be asked to acknowledge receipt of this information.


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Appendix 3-D Contract documentation checklist Key points to consider: The contents of a contract should be commensurate with the level of foreseeable risk and the work being undertaken. The following key points should be considered for inclusion: • Legal requirements • Regulatory requirements • The contractor’s OH&S management system • Safe Work Practices • Project Safety Management Plans, Site Specific Safety Management Plans, Safe Work Method

Statements • Health Service vs. contractor OH&S responsibilities • Use and management of sub-contractors • Initial and ongoing identification, assessment and control or elimination of risks • Provision of OH&S information • Induction and training provisions • Safety rules and emergency procedures • Installation procedures • Commissioning procedures • Technical specifications • Guarding provisions • Testing provisions • Record-keeping and reporting requirements • Monitoring of OH&S compliance, issue resolution procedures, and disciplinary action for OH&S

breaches • Operation of plant and vehicles • Registration/licence provisions • Equipment provision (eg Personal Protective Equipment) • Restricted areas and operations (eg permits-to-work etc) • Medical and first-aid provisions • Ongoing consultation and communication between the Health Service and the contractor(s) and the

employees of each • Warranty • Insurances (Worker’s Compensation, Professional indemnity and liability, Third Party Property

Damage)


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Appendix 3-E List of Permit to Work procedures Below is a list of permits-to-work types, which a Health Service may have in place. Please also note that the Occupational Health and Safety Regulation 2001 includes a requirement for licences and permits for demolition and friable asbestos removal work (Chapters 10). These are issued by WorkCover. Permit type Work – general Issued to contractors to notify site presence and must be carried at all times as proof of authority. (Evacuation procedures and basic safety rules may be printed on reverse side.) Hot work Issued as authority/notification to carry out hot work, eg welding or burning. Usually valid on day of issue only and returned to issuing authority on completion of job for which issued or on completion of work for day. Dusty work Issued as authority/notification to conduct work producing dusty conditions that might require the isolation of fire/smoke detectors. The conditions of issue are usually the same as for Hot Work. Interruption to services Issued when building services (eg water, electrical etc) are to be isolated for the purpose of undertaking repair, renovation or maintenance. Interruption to fire Services Issued when firefighting and/or fire detection systems are to be isolated for the purpose of repair/renovation/maintenance. Confined spaces Issued when contractors must enter confined spaces as defined in Chapter 4, Part 4.3., Division 9 of the Occupational Health and Safety Regulation 2001, “Working in confined spaces”. Before this type of permit is issued, the facility must ascertain that the contractor has adequate confined space entry procedures and those who will do the job have received training in those procedures. The conditions of issue should be similar to those for Hot Work. Noise Issued when contractors are to carry out noisy work. It should specify the times when noisy work may be carried out and any measures required to reduce the impact of noise on patients/visitors and staff.


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Roof Access/Working at Height Issued when contractors must gain access to roof areas or work at height. It should specify the checks that must be made and the equipment to be worn before going onto roof areas and before working at height. The conditions of issue for Roof Access permits should be similar to those for Hot Work. Asbestos Issued for work involving removal of asbestos; work in areas where asbestos is present; or work that may result in asbestos being disturbed. Please also see the Chapter 11 of the Occupational Health and Safety Regulation 2001 for legislative requirements. Excavation Issued to contractors to permit excavation when it is known or suspected that there are underground services such as power cables, gas or fuel lines or telephone cables in the vicinity. The requirements set out in Part 8.5. of the Occupational Health and Safety Regulation 2001 with respect to the stability and other safety aspects of excavation should also be included in the permit to work. Permits to excavate should normally be issued for the duration of a particular excavation task. Work on/in the vicinity of hazardous voltage Issued to contractors who need to work on, or in close proximity to, exposed electrical/switchgear or service energised electrical equipment. Before a permit of this nature is issued, the responsible person must be satisfied that only licensed electricians will be involved, that a lock-out/tag-out system is in place, and that the hazardous area is effectively barricaded to prevent inadvertent contact with live equipment.


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Appendix 3-F PIGGY BACK PROVISIONS

One -off Tenders or Period Tenders The situation often arises whereby a public health organisation calls and accepts tenders for a particular item, and then another public health organisation proceeds to tender for the same item. Unfortunately the conditions of the first tender may not permit the second public health organisation utilising the benefits of the first tender. In general, co-operation and co-ordination of tenders between public health organisations is encouraged, and the public health organisation may call joint tenders. [See separate section on tender networking.] To this effect the following clause is included in the standard RFT. Standard Clause 1 Access to Contract (Piggyback Clause) “Whilst this tender specifically relates to the supply of goods/services to the public health organisation, the right is reserved for any other public health organisation within the NSW Public Hospital system to access goods/services under the same or similar conditions”. When considering whether to take advantage of this clause public health organisations must ensure evaluation of the “value for money” aspects of taking it up at this time. State Contracts Control Board Tenders The State Contracts Control Board may call a tender that results in better terms and conditions than are obtainable under a pre-existing public health organisation tender. The public health organisation can endeavour to re-negotiate the contract, but inclusion of standard clause 2 in all public health organisation tenders would remove the difficulty. To this effect the following clause is included in the standard RFT. However, it should not be made applicable if it is to the detriment of the public health organisation. Standard Clause 2 Common Use Period Contracts “In the event that the State Contracts Control Board awards a Central Tender resulting in a Common Use Period Contract, the parties acknowledge and agree that the public health organisation reserves the absolute right to obtain goods or services under the Central Tender Common Use Period Contract. The Contractor shall have no claim against the public health organisation or any of its members, officers, employees, agents, delegated consultants with respect to the exercise of, or failure to exercise, any such right.”


APPENDIX 3-G

CHECKLIST 3 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER

Procurement Over $30,000 and less than $250,000 Steps to take

Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully completed document to the Procurement Advisory Service, Email: [email protected].

Quote/Procurement Ref No. Official File Number Title Of Procurement Branch/Unit Project Manager Email Address Contact Phone No. Date of Awarding of Contract Successful Supplier/s awarded Contract

Step CHECKLIST Procurement Goods and Services Over $30,000,

Less than $250,000 and not high risk - Steps to take Signature Initials

Date

Initial Concept - New Procure ment Project – goods or service only - For Consultancy , go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c1_nswhealth_consultants.pdf For IT related product or service, go to Commercial Manager, SIM. Appoint Officer as Project Manager and estimate cost of the project.

Create an Official File.

Initiate Completion of Checklist to send to PAS. Read and understand Section 3 (Tendering) of the Supply Procedures Manual. Seek a Procurement Reference Number (PRN) from PAS or Commercial Manager SIM, (for the Department) and record on Official File.

Establish and document the need for the Project. Develop the Scope, Outputs and expected benefits of the procurement.

Identify the contribution the proposed project will make to the Government and NSW Health's objectives.

Certify, in writing, the availability of funds and authority to incur expenditure.

Establish Supervising Manager responsible for delegation of funds – Establish Steering Committee (as appropriate). Include PAS member on Steering Committee as Probity and Process Advisor.

Determine availability of in-house or possible internal alternative sources of supply.

Is this project available through any existing contract? – Check with i) State Government Contracts at Commerce website, (this is not a link) www.nswbuy.com.au (this is not a link) or telephone 1800 679 289 ii) SIM, iii) SP&BD

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All NSW Health Projects over $1MILLION (as a discrete project) must assess risk through the Department of Commerce Risk Assessment Tool titled Procurement Profile Tool at (this is not a link) http://www.dpws.nsw.gov.au/Government+Procurement/Gateway+Review+Process/Project+Profile+Assessment+Tool.htm

Decide on the Procurement Process - Submit a recommendation to the Steering Committee (as appropriate)

5

If project is available through existing contract, its use is mandatory. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process, will go to open market. Government mandates (GST inclusive): $30,000 - $250,000- minimum of three written proposals required. Where fewer than three are invited, the reasons should be documented.

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http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c1_nswhealth_consultants.pdf

http://www.supply.dpws.nsw.gov.au/Contract+Information+and+User+Guides/Contract+Information+and+User+Guides.htm



CHECKLIST 3 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement Over $30,000 and less than $250,000

Steps to take

Step CHECKLIST Procurement Goods and Services Over $30,000, Less than $250,000 and not high risk - Steps to take

Signature INITIALS

Date

Complete Tender/EOI documentation including evaluation criteria (as appropriate).

Write Evaluation Plan and establish Evaluation Committee (as appropriate).

Lodge the controlled document Tender Evaluation Criteria with PAS for security (as appropriate).

6

Develop a Probity Plan (as appropriate).

Advertise Expression of Interest/Tender externally through Communications Unit OR OR

7

If using existing contract, following best practice for NSW Health, invite minimum of three approved Suppliers to quote. If three are not invited, document the reason and file.

Bids Received by Tender Box(hard copy) & /or electronically via website . Tender Opening Committee completes procedure.

If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR

Single stage process: Review bids/tenders for reasonableness/ consistency & against selection criteria.

Document the Recommendation. Issue next document and invite minimum of three short-listed bidders to tender.

If three are not invited, document the reason. Evaluate. Document the Recommendation

Document the Recommendation

Certify that all relevant policy and procedures have been complied with.

Approving Officer sign off recommendation as per delegation.

Submit Purchase Order/Contract or Service Level Agreement to successful Supplier.

Check response to Letter of Acceptance, to ensure it is properly signed by the successful tenderer (same legal entity) & that all conditions are agreed to. Confidentiality Agreement and Conflict of Interest Documents to be signed (as appropriate).

8

After final acceptance of contract inform unsuccessful bidders in writing & give opportunity for debrief.

Inform Shared Services of outcome to comply with public disclosure directive.

Ensure all bids/tender responses, correspondence, submissions/approvals are placed in Official File.

9

Conduct ongoing management of Project.

10 Evaluate the supplier’s performance as per contract/SLA and place the Evaluation Report in the Official File.

TOTAL Price Paid:

Statement of Compliance: This procurement was completed in accordance with NSW Health’s Procurement Policy Directions and all the steps listed above.

Delegated Supervising Officer Name: Title: Signature:_____________________________________ Date:


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APPENDIX 3-H

CHECKLIST 4 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $30,000, Less than $250,000 - Steps to take

Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully completed document to the Procurement Advisory Service, Strategic Procurement & Business Development. Email:

[email protected].



Less than $250,000- Steps to take Signature Date

Initial Concept - New Procure ment Proj ect - Goods or Service howev er for Consultancy go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c2_areas_consultants.pdf For IT related product or service, go to Commercial Manager, SIM. Appoint Officer as Project Manager and estimate cost of the project.


Initiate Completion of Checklist to send to PAS.

Read and understand Section 3 (Tendering) of the Purchasing and Supply Manual. Seek a Quote/Tender Number from Contracts Officer and record on Official File. Establish and document the need for the Project. Develop the Scope, Outputs and expected benefits of the procurement.





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Is this project available through any existing contract? – Check with i) State Government Contracts at Commerce website, www.nswbuy.com.au (this is not a link) or telephone 1800 679 289 ii) SIM, iii) SP&BD TCNG Database – Follow HSS Process to access documents.

Decide on the Procurement Process - Submit a recommendation to the Steering Committee (as appropriate). 5 If project is available through existing contract, the process will

not go to open market. Check for reports on previous projects or firms that may have worked with NSW Health –Check TCNG Database. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process will go to open market. Government mandates (GST inclusive): Over $30,000 and less than $250,000 minimum of three written quotes required. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

Complete Tender/EOI documentation including evaluation criteria (as appropriate).


Lodge the controlled document Tender Evaluation Criteria with PAS for security (as appropriate).

6


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http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c2_areas_consultants.pdf




CHECKLIST 4 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $30,000, Less than $250,000 - Steps to take


[email protected].


Less than $250,000- Steps to take Signature INITIALS

Date

Advertise EOI or Tender externally OR OR

7


Bids Received by Tender Box- Tender Opening Committee completes procedure If multistage process, review Expressions Of Interest for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR

Single stage process: Review bids/tenders for reasonableness/ consistency with the market and against selection criteria.


If three are not invited, document the reason.

Evaluate. Document the Recommendation


Prepare the recommendation certifying that all relevant policy and procedures have been complied with.

Approving Officer sign off recommendation as per delegation


Check response to Letter of Acceptance, to ensure it is properly signed by the successful tenderer (same legal entity) & that all conditions are agreed to.

8


Complete the award section of the eTendering Admin Console to comply with public disclosure directive.

Ensure all bids/tender responses, correspondence, submissions/approvals are placed in Official File

9

Conduct ongoing management of Project


TOTAL Price Paid:

Statement of Compliance: This procurement was completed in accordance with NSW Health’s Procurement Policy Directions and all the steps listed above. Project Manager: Name: Title: Signature:_____________________________________ Date:


WHAT TO DO WITH THIS COMPLETED SIGNED FORM: 1) Place the signed original in the official file. 2) Email copy to: Procurement Advisory Service, Email: [email protected]

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APPENDIX 3-I

CHECKLIST 5 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $250,000,

Less than $10Million and not high risk - Steps to take


[email protected]. Quote/Procurement Ref No. Official File Number Title Of Procurement Branch/Unit Project Manager Email Address Contact Phone No. Date of Awarding of Contract Successful Supplier/s awarded Contract Step CHECKLIST Procurement Goods and Services Over $250,000,

Less than $10Million and not high risk - Steps to take Signature Initials

Date

Initial Concept - New Procurement Project - Goods or Service however if Consultancy go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c1_nswhealth_consultants.pdf For IT related product or service, go to Commercial Manager, SIM Appoint Officer as Project Manager and estimate cost of the project.

Create an Official File. Initiate Completion of Checklist to send to PAS.

Read and understand Section 3 (Tendering) of the Supply Procedures Manual. Seek a Procurement Reference Number (PRN) from PAS or Commercial Manager SIM, (for the Department) and record on Official File.


Identify the contribution the project will make to the Government and NSW Health's objectives.


Establish Supervising Manager responsible – Establish Steering Committee (as appropriate). Include PAS Member on Steering Committee as Probity and Process Advisor.


Is this project available through any existing contract? – Check with i) State Government Contracts at Commerce website, (this is not a link) www.nswbuy.com.au (this is not a link) or telephone 1800 679 289 ii) SIM, iii) SP&BD


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IT Projects over $5Million must also undergo a formal Business Case Review as part of the Gateway Process. Strategic Procurement & Business Development Branch will assist with this process.

Decide on the Tender Process - Submit a recommendation to the Steering Committee 5 If project is available through existing contract, the

process will not go to open market. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotes are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process, will go to open market. Government mandates (GST inclusive):Over $250,000 Open Tender required, State Procurement to manage Tender.

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CHECKLIST 5 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $250,000,



Less than $10Million and not high risk - Steps to take Signature INITIALS

Date

Complete Tender/EOI documentation including evaluation criteria.


Lodge the controlled document Tender Evaluation Criteria with PAS.

6


Advertise EOI or Tender externally through Communications Unit OR i) OR

7


ii)

Bids Received by Tender Box- Tender Opening Committee completes procedure If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR








Submit Contract or Service Level Agreement to successful Supplier. Contracts must go through Legal Branch (Department specific)


8


Inform PAS of outcome for public disclosure.


9

Conduct ongoing management of Project 10 Evaluate the supplier’s performance as per contract/SLA and place the Evaluation

Report in the Official File.

TOTAL Price Paid:




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APPENDIX 3-J

CHECKLIST 6 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $250,000,

Less than $10Million and not high risk - Steps to take Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully

completed document to the Procurement Advisory Service, Strategic Procurement & Business Development. Email: [email protected].



Less than $10Million and not high risk - Steps to take Signature Date

Initial Concept - New Procurement Project - Goods or Service however if Consultancy, go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c2_areas_consultants.pdf For IT related product or service, go to Commercial Manager, SIM Appoint Officer as Project Manager and estimate cost of the project.



Read and understand Section 3 (Tendering) of the Purchasing and Supply Manual. Seek a Quote/Tender Number from Contracts Officer and record on Official File. Establish and document the need for the Project. Develop the Scope, Outputs and expected benefits of the procurement.

Identify the contribution the project will make to the Government and NSW Health's objectives.


Establish Supervising Manager responsible – Establish Steering Committee (as appropriate). Include PAS Member on Steering Committee as Probity and Process Advisor.


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Decide on the Tender Process - Submit a recommendation to the Steering Committee 5 If project is available through existing contract, the process will not go to

open market. Check for reports on previous projects or firms that may have worked with NSW Health –Check TCNG Database. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process will go to open market. Government mandates (GST inclusive):Over $250,000 Open Tender required. Over $1Million Risk Management Assessment through Gateway Process required.

Complete Tender/Expression of Interest documentation including evaluation criteria.


Lodge the controlled document Tender Evaluation Criteria with appropriate body for security.

6


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http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/c2_areas_consultants.pdf




CHECKLIST 6 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services Over $250,000,


Step CHECKLIST Procurement Goods and Services Over $250,000, Less than $10Million and not high risk - Steps to take

Signature INITIALS

Date

Advertise EOI or Tender externally OR OR

7


Bids Received by Tender Box- Tender Opening Committee completes procedure If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR







Approving Officer sign off recommendation as per delegation Submit Purchase Order/Contract or Service Level Agreement to successful Supplier. Check response to Letter of Acceptance, to ensure it is properly signed by the successful tenderer (same legal entity) & that all conditions are agreed to.

8


Complete the award section of the eTendering admin console to comply with public disclosure directive.


9

Conduct ongoing management of Project 10 Evaluate the supplier’s performance as per contract/SLA and place the Evaluation Report in

the Official File.

TOTAL Price Paid:




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APPENDIX 3-K

CHECKLIST 7 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services (except Consultants) Over $10Million - Steps to take

Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully



All Procurement over $10Million is to be managed by Strategic Procurement & Business Development Branch–

Contact Chief Procurement Officer. (MANDATORY). Gateway process review is MANDATORY for all procurement over $10 Million.

Step CHECKLIST Procurement Goods and Services (except Consultants) Over $10Million

Steps to take

Initials Date

Appoint Officer as Project Manager and estimate cost of the project. Create an Official File. Initiate Completion of Checklist to send to PAS. Read and understand Section 3 (Tendering) of the Supply Procedures Manual. Seek a Procurement Reference Number (PRN) from PAS or Commercial Manager SIM, (for the Department) and record on Official File.



Certify, in writing, the availability of funds and authority to incur expenditure. Establish Supervising Manager responsible – PAS is to manage the process and Chair the Steering Committee. Establish Steering Committee (Client CEOs and advisers are represented on the steering committee). Project will be handed over on completion.

Is this project available through any existing contract? – Check with i) State Government Contracts at Commerce website, www.nswbuy.com.au (this is not a link) or telephone 1800 679 289 ii) SIM, iii) SP&BD

All NSW Health Projects over $1MILLION (as a discrete project) must assess risk through the Department of Commerce Risk Assessment Tool titled Procurement

Profile Tool at (this is not a link) http://www.dpws.nsw.gov.au/Government+Procurement/Gateway+Review+Process/Project+Profile+Assessment+Tool.htm

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Projects over $10Million (or $5Million IT) must also undergo a formal Business Case Review as part of the Gateway Process. PAS will assist with this process.


process will not go to open market. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Project Managers may choose to request three or more written quotes however where fewer than three quotations are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process will go to open market. Government mandates Open Tender required, State Procurement to manage the Tender. Over $1Million Risk Management Assessment through Gateway Process required. PAS to manage this process.

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CHECKLIST 7 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services (except Consultants) Over $10Million - Steps to take

Step CHECKLIST Procurement Goods and Services Over $10Million - Steps to take Signature Date


Write Evaluation Plan and establish Evaluation Committee.


6

Develop a Probity Plan and implement.

Advertise EOI or Tender externally through Communications Unit OR OR

7


Bids Received by Tender Box- Tender Opening Committee completes procedure If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders.








Submit Contract to successful Supplier. Contracts over $250,000 must go through Legal Branch (Department specific)


8


i) Inform PAS of outcome for public disclosure.

ii) Ensure all bids/tender responses, correspondence, submissions/approvals are placed in Official File

9

iii) Conduct ongoing management of Project


TOTAL Price Paid:




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APPENDIX 3-L

CHECKLIST 8 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services (except Consultants) Over $10Million - Steps to take

Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully



All Procurement over $10Million is to be managed by Strategic Procurement & Business Development – Contact Chief Procurement Officer (MANDATORY). Gateway process review is MANDATORY for all procurement over $10

Million. Step CHECKLIST Procurement Goods and Services (except Consultants) Over

$10Million Steps to take

Initials Date

Appoint Officer as Project Manager and estimate cost of the project. Create an Official File. Initiate Completion of Checklist to send to PAS Read and understand Section 3 (Tendering) of the Purchasing and Supply Procedures Manual.

Seek a Quote/Tender Number from Contracts Officer and record on Official File. Establish and document the need for the Project. Develop the Scope, Outputs and expected benefits of the procurement.


Certify, in writing, the availability of funds and authority to incur expenditure. Establish Supervising Manager responsible – PAS is to manage the process and Chair the Steering Committee. Establish Steering Committee (Client CEOs and advisers are represented on the steering committee). Project will be handed over on completion.


All NSW Health Projects over $1MILLION (as a discrete project) must assess risk through the Department of Commerce Risk Assessment Tool titled Procurement

Profile Tool at (this is not a link) http://www.dpws.nsw.gov.au/Government+Procurement/Gateway+Review+Process/Project+Profile+Assessment+Tool.htm

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Projects over $10Million (or $5Million IT) must also undergo a formal Business Case Review as part of the Gateway Process. PAS will assist with this process.


process will not go to open market. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Project Managers may choose to request three or more written quotes however where fewer than three quotations are invited, the reasons should be documented and retained on file.

If project is not available through existing contract, the process will go to open market. Government mandates Open Tender required, State Procurement to manage the Tender. Over $1Million Risk Management Assessment through Gateway Process required. PAS to manage this process.

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CHECKLIST 8 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER Procurement Goods and Services (except Consultants) Over $10Million - Steps to take

Step CHECKLIST Procurement Goods and Services Over $10Million - Steps to take Signature Date


Write Evaluation Plan and establish Evaluation Committee.


6

Develop a Probity Plan and implement.

Advertise EOI or Tender externally through Communications Unit OR OR

7


Bids Received by Tender Box- Tender Opening Committee completes procedure If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders.








Submit Contract to successful Supplier. Contracts over $250,000 must go through Legal Branch (Department specific)


8


Inform Shared Services of outcome for public disclosure.


9

Conduct ongoing management of Project 10 Evaluate the supplier’s performance as per contract/SLA and place the Evaluation Report

in the Official File.

TOTAL Price Paid:




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APPENDIX 3-M CHECKLIST 9 NSW DEPARTMENT OF HEALTH

Engaging a Contractor Under $30,000 Steps to take

Instructions: Sign and Date each step as it is completed. Do this BEFORE the commitment is made (or the Contractor may not get paid)

Officer Engaging Contractor: Branch/Unit: Phone Number: Project Title: Dates of Engagement: START DATE: FINISH DATE: Total amount to be paid to Contractor:

Step Engaging a Contractor Under $30,000 - Steps to take

Initial Date

1 Certify, in writing, the availability of funds and authority to incur expenditure.

2 Check possibility of in-house or possible internal alternative supply. 3 Is this Contracting Category covered under any existing Contract? If so, its use is

MANDATORY. – Check State Government Contracts at Dept of Commerce website Go to:

http://www.supply.dpws.nsw.gov.au/Contract+Information+and+User+Guides/Contract+Information+and+User+Guides.htm or telephone 02 9372 7791

4 What is the number of the Contract that will be used? 5 If the Contractor is not engaged through an existing Contract, document the reason and

retain on Official File.

6 Establish the Contractor has appropriate level of insurance (not necessary if under Dept of Commerce Contract).

7 Establish the Contractor satisfies Australian Tax Office requirement to ensure NSW Health is not exposed to superannuation & withholding tax liability (not necessary if Dept of Commerce Contract).

8 Establish the total price is a fair market price (order splitting forbidden)

9 Seek approval from your Deputy Director General before any commitment is made (MANDATORY).

Statement of Compliance: The engagement of this Contractor was completed in accordance with NSW Health’s Procurement Policy Directions and all the steps listed above.

Delegated Officer Name:__________________________________________________________________________ Title:_________________________________________________________________________________ Signature:_____________________________________ Date:

WHAT TO DO WITH THIS COMPLETED SIGNED FORM: Place the original in the official file.

:Also available is the EasyGuide to Procurement under $30,000 - go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/easyguide9under30thousand.pdf Procurement Checklists available include For Health Services Checklist 2 for Procurement of Consultants Checklist 4 for Procurement $30,000 - $250,000 Checklist 6 for Procurement $250,000-$10Million

Checklist 8 for Procurement over $10Million

For NSW Health Checklist 1 for Procurement of Consultants Checklist 3 for Procurement $30,000 - $250,000 Checklist 5 for Procurement $250,000-$10Million Checklist 7 for Procurement over $10Million

Checklist 9 Engaging Consultant/Contractor under $30,000

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APPENDIX 3-N

STANDARD SERVICES/CONSULTANCY CONTRACT (Contracts below $200,000)

The Standard Services/Consultancy Contract can be downloaded from http://internal.health.nsw.gov.au/legal/pdf/standard.doc

http://internal.health.nsw.gov.au/legal/pdf/standard.doc�














TABLE OF CONTENTS

CHAPTER 4 – CONSULTANCY ENGAGEMENT - POLICY/PROCEDURES INTRODUCTION............................................................................................................ 4.1

• Checklist ...................................................................................................... 4.1 1. Definition ............................................................................................................... 4.1

• Distinguishing Consultants from Other Contractors .................................... 4.1 • Construction Projects ................................................................................... 4.3

2. Principles ................................................................................................................ 4.3

• Value for Money .......................................................................................... 4.3 • Impartiality ................................................................................................... 4.4 • Fairness ........................................................................................................ 4.4 • Proper & Impartial Processes ....................................................................... 4.4 • Proper and Ethical Practices by Consultants ................................................ 4.4 • Accountability & Record Keeping ............................................................... 4.5 • Awareness of Delegations and Procedures ................................................... 4.5

3. Determining the Need to Engage a Consultant ....................................................... 4.6 4. Managing the Project .............................................................................................. 4.6

• Planning the Project and the Engagement .................................................... 4.6 • Typical Components of a Well-Planned Project........................................... 4.7 • Conflicts of Interest ...................................................................................... 4.8

5. Procurement Levels ................................................................................................ 4.8

• Minimum Number of Bids ........................................................................... 4.8 • Minimum Levels of Competition ................................................................. 4.8 • Approaches to Seeking Bids ........................................................................ 4.9

6. Developing the Specification and Conditions of Engagement ................................ 4.11

• The Specification of Requirements and Conditions of Engagement ............ 4.12 • A. The Specification .................................................................................... 4.12 • B. Conditions of Engagements ..................................................................... 4.14 • C. Selection Criteria and Conditions of Bidding .......................................... 4.16

7. Inviting and Receiving Bids and Tenders ............................................................... 4.17

• Inviting Bids ................................................................................................. 4.17 • Changes in Requirements After Invitations are Issued ................................. 4.18 • Briefing Conference ..................................................................................... 4.18 • Security of Bids Received ............................................................................ 4.18 • Late Bids ...................................................................................................... 4.19

8. Selecting the Consultant ......................................................................................... 4.19

• Assessment of Bids ...................................................................................... 4.19 • Late Changes to the Requirements ............................................................... 4.20 • Justification for Selection ............................................................................. 4.20

9. Engaging the Selected Consultant .......................................................................... 4.21

• Engagement Methods ................................................................................... 4.21 • Superannuation Liability - Consultants/Contractors ..................................... 4.23 • Advice to Unsuccessful Bidders................................................................... 4.24

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TABLE OF CONTENTS (Cont) 10. Managing the Consultant’s Work ........................................................................... 4.25

• Variations After the Consultancy has Commenced ...................................... 4.26 11. Evaluation of the Consultant’s Performance .......................................................... 4.26 12. Reporting the Use of Consultants ........................................................................... 4.28 Appendix 1 - Sample Invitation to Consultant to Make A Submission

for Undertaking an Assignment ............................................................ 4.29 Appendix 2 - Consultancy Agreement from Crown Solicitor’s Office ....................... 4.30 Appendix 3 - Consultancy Evaluation Report ............................................................. 4.80 Appendix 4 - Legislation and Policies to be Observed by Consultants ....................... 4.82 Appendix 5 - Checklist for Engagement of Consultants ............................................. 4.83 Appendix 6 - Annual Reporting Sample Disclosure ................................................... 4.87 Prequalification Scheme for Engagement of Consultants – Performance & Management Services .................................................................................................... 4.88

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CHAPTER 4 – CONSULTANCY ENGAGEMENT – POLICY/PROCEDURES 4.1

INTRODUCTION The NSW Government expects that the professional expertise of public employees will be used as a first option in preference to engaging consultants. Consultants should only be engaged when the required professional expertise is not available internally or cannot be provided in a more cost effective manner than can be obtained by engaging a consultant. Because there are special requirements and delegations for the engagement of consultants and for reporting related expenditure it is important that consultancy services be distinguished from other services which are procured from the private sector. The content of this section is mainly derived from Premier’s Circular No. 2004-17 “Engagement and Use of Consultants” issued in July 2004. Checklist At Appendix 5A (DoH) and 5B (Health Services and Ambulance Service) is a checklist of the different stages to be undertaken in the engagement of consultants process. Use of the checklist is mandatory. A copy of the Checklist is to be forwarded to the Department’s Asset & Contract Services Branch and will be incorporated in a centralised database.

1. DEFINITION

For the purposes of this section a consultant is a person or organisation engaged under contract on a temporary basis to provide recommendations or high level specialist or professional advice to assist decision-making by management. Generally it is the advisory nature of the work that differentiates a consultant from other contractors. The definition does not apply to casual or temporary staff employed or engaged by a NSW health organisation. In practice the difference between consultants and other contractors is not always clear cut and judgements will need to be made based on the particular circumstances. The examples below are offered as illustrations. DISTINGUISHING CONSULTANTS FROM OTHER CONTRACTORS For the purposes of these guidelines, the following descriptions are given. Training • A person or firm engaged to provide advice on training needs and to develop training programs

is a consultant. • A person or firm engaged to provide the actual training would not be a consultant for the

purposes of these guidelines. Information Technology • A person or firm engaged to assist in the development of an information technology strategic

plan and/or to assist with the development of specifications for the systems and/or to provide advice on implementation is a consultant. 21(1/06)


• A person or firm engaged to undertake implementation in accordance with the specifications, for example supplying or writing the software and constructing the systems, would not be a consultant.

Legal • A person or firm engaged primarily to advise on legal issues relating to a proposed innovation or

amendments to legislation is a consultant. • A person or firm engaged primarily to provide routine legal services such as conveyancing,

advocacy, drafting documents etc even though that includes professional advice, would not be a consultant.

Finance and Accounting • A person or firm engaged primarily to provide advice on the financial viability of a government

business enterprise is a consultant. • A person or firm engaged primarily to provide routine auditing or routine accounting services

even though that includes professional advice would not be called a consultant. Some other examples of consultancy projects are: • Provision of advice regarding new technology and ideas. • Development of performance standards. • Evaluation of activities and programs. • Preparation of sales and marketing strategies. • Conduct of environmental scans and advice on planning. • Feasibility studies.

Except for litigation work, the guidelines will apply to all legal work undertaken by the health organisation. Law firms and barristers will be expected to provide competitive fixed price tenders for any work involving provision of advice with reporting requirements also applying. (Premier’s letter 21/9/90.)

Public agencies are not to engage consultants to prepare Annual Reports. This restriction applies to those aspects of the report preparation which can normally be carried out by agency staff, e.g. text preparation, editing, etc. The decision on whether to use consultants for design and layout of the report will be left to the discretion of each CE. In exercising this discretion, CE’s should consider the Government’s commitment to restrict the unnecessary use of consultants and that they should only be used for design and layout of annual reports where the necessary expertise does not exist within the agency. In exceptional circumstances an exemption from this ban may be granted by the CE. A strong business case, demonstrating cost effectiveness, will be necessary before approval will be given. (PEO Circular 96-23 & 96-23A)

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CONSTRUCTION PROJECTS For capital works projects, detailed advice on the engagement and management of architects, engineers and other building industry professionals is contained in the NSW Government’s Capital Project Procurement Manual (CPPM). The CPPM should be used as the primary reference document for the engagement of contractors and consultants for all construction industry projects. It should be noted that the term “consultant” in the CPPM is used in accordance with industry practice and has a far wider meaning than in this document. For example, a person or firm engaged to provide routine engineering services to a construction agency on that agency’s core activities, even though the services include professional advice, would not be called a consultant for the purposes of the annual reporting provisions set out in these guidelines. The procedures for the opening of tenders, evaluation, etc. as contained in the Purchasing & Supply Manual are to be followed in respect to capital works projects (construction projects).

2. PRINCIPLES

The key principles to be satisfied concern value for money, proper and impartial process, proper and ethical practices by consultants and accountability. VALUE FOR MONEY, IMPARTIALITY AND FAIRNESS Value for money, impartiality and fairness are familiar terms which are subject to multiple interpretations. The following is intended to clarify their usage in this document. Value for money is determined by considering all the factors which are relevant to a particular purpose, for example, quality, reliability, timeliness, service, initial and ongoing costs are all factors which can make a significant impact on benefits and costs. Value for money does not mean “lowest price”. However, the lowest price bid might offer the best value if it meets other essentials, such as quality and reliability. As noted in this document, it is important to be clear about how value for money will be determined in any particular set of circumstances prior to assessing bids. Value for money will be considered when deciding whether or not to engage a consultant. Approval to engage a consultant will be given only when the cost is justified by the anticipated benefits. This means engaging a consultant is a better option than undertaking the work in-house or taking other action. Value for money will be pursued through fair and effective competition. Other things being equal, the extent of competition sought by agencies will be consistent with the financial value of the procurement or disposal, with higher value cases normally subject to open invitations to bid or to express interest in bidding.

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Following the engagement of consultants, value for money will be pursued through performance monitoring and evaluation. Impartiality in the context of this document means endeavouring to be objective and even-handed. For example, the impartial person will endeavour to objectively establish the criteria for determining best value for money and will endeavour to objectively assess each bid against the criteria. Being impartial includes taking account of practicalities. For example, the principle of impartiality does not require publicly advertising for bids in every case or inviting bids from firms which are poor performers. Fairness in the context of this document overlaps with impartiality in the sense of being even-handed. However, in some circumstances fairness can also require taking account of the effects of actions on others. For example, it is unfair (and contrary to Government policy) to call tenders when there is no serious intent to award a contract subject to receipt of a satisfactory offer. Fairness does not mean pleasing everyone. It can be unfortunate, but not unfair, that people are adversely affected by decisions. PROPER AND IMPARTIAL PROCESSES The skill, knowledge and responsibility of the employees involved in engaging a consultant will be appropriate to the nature, complexity and magnitude of the consultancy engagement. The processes of inviting and assessing bids will safeguard against favouritism, improper practices and opportunities for corruption. Private interests will not be allowed to influence decisions about procurement or disposal. Commercially sensitive information from bidders will be treated confidentially subject to the requirements of the law. See section 3 of this manual in respect to provisions that apply in disclosing information of winning bids. (Refer to the Freedom of Information Act 1989, schedule 1, clause 7, concerning the protection given to commercially valuable information.) Agencies will not cause industry to unnecessarily incur tendering costs. All actions taken and requirements placed on others will comply with statutory requirements. PROPER AND ETHICAL PRACTICES BY CONSULTANTS Consultants will seek to achieve best practice standards in their industry and will demonstrate this in the fulfilment of their contract. Consultants will act honestly and ethically. For example: They will: • disclose any conflicts of interest (see consultancy agreement) and will not seek to undermine

fairness and impartiality on the part of government agencies. The standard agreement includes clauses in respect to consultants declaring conflicts of interest. If the standard agreement is not used written declarations are to be obtained from consultants indicating that they have no conflict of interest and agreeing to advise the organisation immediately if and when a conflict of interest arises;

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• submit bids only when they have a firm intention to proceed; • not engage in practices such as collusion in bidding, inflation of prices to compensate

unsuccessful tenderers, hidden commissions or other such secret arrangements; • comply with State and Commonwealth legislation including the trade practices and consumer

affairs laws. ACCOUNTABILITY & RECORD KEEPING Public sector executives and other persons involved in procurements and disposals will be aware of their responsibilities and will be able to account for their actions and decisions. In particular: • records of procurement and disposal decisions including the reasons for recommending and

deciding on the selection and rejection of bids will be kept in a manner which facilitates audit and other normal processes of accountability;

• expenditure on consultants will be recorded and publicly reported, as required by the Annual

Reports Acts. (See Part 12 of this section.) Ensuring Accountability and Record Keeping Actions and decisions need to be accounted for and, in particular, good record keeping of decisions is imperative for auditing and accountability purposes. Refer to Premier’s Memorandum PM98-16: Records Management Standards and Practices. Effective and efficient contract management cannot be done properly without accurate and organised records. Contract records are kept so that: • clear public accountability can be demonstrated; • regular and accurate reports to management and clients are prepared; and • information is available for the assessment of claims and the resolution of disputes. Comprehensive records should be maintained throughout the purchasing process checklists, detailing evaluation criteria, weightings, decision-making processes and decisions made. These records should provide sufficient information to enable audit and independent review functions to be carried out. An individual file should be maintained for each procurement where possible. Records could include details of telephone conversations wherein any type of commitment etc. is made. Departure from established procedures for purchasing of services should only be for sound, well-documented reasons. These reasons should be approved at a senior level by those not directly involved in the process. AWARENESS OF DELEGATIONS AND PROCEDURES The health service should ensure that employees involved in the engagement of consultants are aware of relevant delegations and procedures. Health services are to ensure that only senior officers are delegated the authority to procure consultancy services and that such delegations are differentiated from normal authority to incur expenditure delegations.

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http://www.premiers.nsw.gov.au/pubs_dload_part4/prem_circs_memos/prem_memos/1998/m98-16.html�

http://www.premiers.nsw.gov.au/pubs_dload_part4/prem_circs_memos/prem_memos/1998/m98-16.html�


3. DETERMINING THE NEED

DETERMINING THE NEED TO ENGAGE A CONSULTANT Action to select and engage a consultant should be initiated only where there is clarity concerning: • the unavailability of appropriate staff or other critical resources in-house, or the greater cost of

doing the work in-house; • the unavailability or inappropriateness of other possible avenues; • the contribution the consultancy will make to the health organisation’s aims and objectives; • the particular problem/s or issue/s which will be the focus of the consultancy; • the work and output expected from the consultant, and the benefits expected; • an estimate of cost. The costs involved in specification preparation, briefing, tender evaluation, engagement and assisting and supervising the consultants should be estimated in monetary or time terms (such as person days) and identified separately in the statement of estimated costs. Calculation of such costs enables a realistic appreciation of likely project costs for comparison against the expected benefits. The use of consultants on tasks as a means of assisting agencies achieve their objectives does not abrogate the agency’s responsibility for successful outcomes of projects. Consultants do not provide risk avoidance for an agency if projects are not successful. Effective oversight, management, evaluation of consultancy projects is essential. Approval to engage a consultant should only be given if the organisation is satisfied that the work is essential and also cannot be performed internally by that agency. Clearly, the expenditure should be justified and when being costed should take into consideration overhead costs. Part of this consideration should involve the estimation and documentation of the cost and time implications of the alternatives. If a decision is then made to proceed to a consultancy, a cost and time estimate should be prepared and the availability of funds should be confirmed prior to seeking approval to invite offers from consultants. The cost estimate should detail the agency staff and administrative costs involved in specification preparation, briefing, tender evaluation, engagement and contract negotiation as well as assisting and supervising the consultants and evaluating their performance and effectiveness.

4. MANAGING THE PROJECT

PLANNING THE PROJECT AND THE ENGAGEMENT Sound planning at the outset will increase the probability of successful, cost-effective outcomes for all projects. The degree of detail and formality will vary with the nature of the project but the governing components of a well-planned project will be similar.

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A list of the typical components which should be considered at the outset when initiating processes to engage a consultant is set out hereunder. TYPICAL COMPONENTS OF A WELL-PLANNED PROJECT A project owner: This is a senior officer ultimately responsible and accountable for the management, outcome and costs of the project. It is essential that project responsibility be clearly assigned. A steering committee of key stakeholders or their representatives: The committee steers the broad direction of the project and would normally be chaired by the project owner. The steering is often in response to material presented to the committee by project personnel including the consultant when appointed. The committee will usually be the main judge of the adequacy of the output. A project manager: This person, who may be the project owner and/or may be assisted by project officers, is responsible for detailed project planning and operations including: • preliminary planning; • record keeping; • submissions and briefings to the project owner and the steering committee; • preparation of the detailed brief and other documentation; • arranging for invitations for bids and their receipt and assessment; • arranging for the engagement of the consultant; • day to day working relationships and liaison with the consultant; and • statutory and other reporting requirements. A statement of the intended outcomes and the terms of reference for the project: This will be approved by the project owner and/or the steering committee. Where the engagement of a consultant is part of a much larger project, there will normally be a statement of objectives and terms of reference for the larger project and a subsidiary statement of objectives and terms of reference for the component to be undertaken by the consultant, with the linkages with the larger project shown. A project budget: This will usually be a matter for the project owner to determine or negotiate with other parties. A project plan: At the outset this may be a draft timetable of major events and deliverables, such as the expected date of the engagement of a consultant and the expected (or required) date of completion of the major outputs of the consultancy, supplemented by a simple list of the initial activities such as “appoint steering committee”, “draft brief”, “invite bids”, and so on. Where the engagement of a consultant is part of a much larger project, the planning for the consultant will need to be incorporated into the total project plan with the key linkages with the larger project highlighted. When the consultant is appointed, a detailed timetable for the consultancy exercise will need to be finalised. Reporting arrangements: Project planning must include reporting arrangements which will usually include periodic reports to the steering committee, supplemented by day to day liaison with the project manager. Those arrangements and some of the other components listed above, such as objectives and terms of reference, should be reflected in the documentation issued to consultants.

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CONFLICTS OF INTEREST Recommendations and decisions at the initiating stage and throughout the processes should be free of any private or other interests which might undermine objectivity. Under the code of conduct there is an obligation on employees to declare any conflict of interest. That obligation should be extended to all parties advising the agency. Following the declaration of a conflict of interest, the appropriate extent of involvement, if any, of the person should be determined with action decided upon being able to withstand public scrutiny as to probity. Consultants are to be required to complete a written statement that no conflict of interest exists and if selected for the consultancy that they will advise the organisation of any conflict of interest arising.

5. PROCUREMENT LEVELS AND SEEKING BIDS

MINIMUM NUMBER OF BIDS The optimum degree of competition obtains best value for the client without imposing undue costs on industry. The optimum will vary with circumstances including the costs and complexity of bidding and the value of the services to be provided by the consultant. Assuming all other things to be equal, the degree of competition should increase with the value of the work to be undertaken. The table below sets out minimum levels of competition to be sought. The agency’s pre-bid estimate of the total amount which will be paid to the selected consultant determines the minimum level of competition to be sought when inviting bids. The monetary figures are inclusive of GST.

Minimum Levels of Competition

Where estimated cost of the consultancy is less than $30,000

Where estimated cost of the consultancy is in the range of $30,000 to $150,000

Where estimated cost of the consultancy is over $150,000

One written proposal is acceptable if that is appropriate in the circumstances and the cost is reasonable and consistent with the market.

Written bids should be sought from at least three consultants who are believed to be capable of performing the work.

An open invitation should be advertised in the press. This may be a multiple stage process as discussed below.

If bids exceed a cost level where a greater degree of competition is called for, the accountable manager will need to make a judgement as to whether or not to recommence the process. Either way, the reasons should be documented. In this section “bid” usually includes tender, quote, proposal and other types of offer. Similarly, the term “bidder” usually includes tenderer, proponent etc. MINIMUM LEVELS OF COMPETITION In many cases it will be appropriate to increase the number of bids above the minimums shown in the table. This is matter for judgement in each case. For example, open invitations for bids may be made whenever that is considered justified. Exceptional circumstances where a lesser number may be appropriate are discussed below.

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Exceptions The advice of the Department of Health’s Asset & Contract Services Branch is to be sought in relation to all contracts which fall outside of DoH policies. Where an engagement estimated to cost over $150,000 relates to a project which is genuinely confidential and cannot be publicised, or is genuinely urgent and cannot be deferred, open competition may be inappropriate or impractical. In the circumstances the best option may be to invite proposals from three or more firms known by or recommended to the agency as being able to undertake the task effectively. In these cases, the course of action and the engagement must be approved by the Chief Executive or authorised person in line with delegations for this particular purpose. All documentation in these, and in all cases, should be accessible by internal and external auditors. There can also be rare cases where there is definitely only one firm or person capable of or available for the task and the options of changing the specification or deferring the task are not viable. In such cases the arrangement should be negotiated commercially with the aim of achieving the best value for money in the circumstances. In these cases also, the course of action and the engagement must be approved by the Chief Executive or authorised person in line with delegations for this particular purpose. Cases which are apparently “exceptional” should be treated very cautiously. For example, assertions that there is only one person or firm capable or available to undertake the project are often disproved when the market is tested by invitations for bids. APPROACHES TO SEEKING BIDS The following information is offered to assist project managers choose the best method of seeking bids. The information is not comprehensive and advice from experienced sources will often be necessary. Open Invitations in the Press The requirement for open competition may be satisfied by: • a single stage process whereby the press advertisement invites fully developed bids, one of

which will be selected; or • a multiple stage process whereby the press advertisement invites pre-registration or expressions

of interest which will lead to selection of three or more responding firms to be invited to submit detailed bids.

Additional information on these approaches to seeking bids is contained hereunder. Seeking Bids from Selected Firms Without Public Advertisement This approach limits the opportunity to a small number of firms but also limits the costs to industry and to the agency of submitting and evaluating bids and can be relatively quick. It relies for best value outcomes on the ability of the people concerned to impartially select a group of firms likely to make competitive offers.

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It is usually restricted to lower to mid-range value consultancies or where there are time or confidentiality constraints. Inviting Bids by Public Advertisement (Open Bidding) The main advantage of open bidding is that competition for the contract is fully open and can produce a wide range of competitive responses from which the agency can choose. In many cases it can be efficient and highly effective. There is no time spent at the outset determining suitable bidders. However, it can be unfair to expect many firms to incur high costs completing complex tenders when only one of the many can be successful. Where the selection criteria and/or the specifications are complex and an excessive number of firms are competing, open tendering can cause high costs to industry and high processing costs to agencies. In those cases an invitation to express interest or pre-qualify, discussed below, is often preferred by industry and can be a more manageable and effective approach for agencies. Inviting Applications for Pre-Registration for Contracts for a Specific Category of Work Lists of pre-qualified firms are an appropriate option when an agency is engaging consultants frequently for tasks within a specific field. Agencies issue an open invitation for prospective bidders to express interest in bidding for particular categories of work such as architecture, construction, environmental assessments, information technology or any definable activity. Firms which best satisfy the published criteria are registered as pre-qualified firms. The number of firms given pre-qualification status should be relevant to the amount of work available from the agency. There is little point pre-qualifying many firms if only a few jobs will occur each year. To avoid that situation, the published criteria for pre-qualification should be sufficiently demanding or refined to limit the number of firms to manageable numbers. Invitations to bid for specific contracts are issued to all or some of the firms. Where invitations are restricted to a limited number of registered firms, the method of choosing firms to be issued with invitations should aim to provide all comparable firms with broadly similar opportunities to bid over a period of time. The list of pre-qualified firms is maintained by periodic advertisement, by periodic review, by review for non-performing or non-responding firms and by being kept open for new registrants and previously rejected applicants. Also, there should be an express and ongoing obligation on registrants to continue to comply with the relevant criteria and to advise of any changes which might affect their registration. Inviting Expressions of Interest or Pre-Registration for a Specific Contract, Followed by Invitations to Short-Listed Firms Agencies may issue an open invitation for prospective bidders to express interest in bidding for a particular contract. The respondents are then culled against selection criteria stated in the invitation. The short-listed respondents are then issued with a detailed specification and contractual information and invited to bid for the contract. Only persons and firms who applied for pre-registration or who submitted an expression of interest are considered.

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This option is particularly suitable when: (a) a wide range of firms is likely to be interested and/or there is little reliable information about

capable firms in the market; (b) the value of the work and/or the level of complexity is relatively high; and (c) the task to be performed is unusual for the agency. Inviting Preliminary Proposals or Expressions of Interest Which Contain Proposals and Ideas, Followed by Invitations to Short-Listed Firms Some invitations to industry seek preliminary proposals and ideas which are used as a basis for short-listing firms, along with other criteria such as expertise and experience. In such cases agencies must respect the confidentiality of responses and the intellectual property of firms. This is particularly relevant where an agency may be tempted to use an innovative idea of a firm in a specification for issue to other firms. It is desirable to declare any such intent so that the owner of the intellectual property rights can elect to grant a licence to use the rights and to negotiate an appropriate fee and/or restrict the form of licence. Legal advice should be sought before pursuing that option. Requests for proposals are often called invitations for expressions of interest. It is preferable for agencies to title processes in terms which literally reflect the intention of the agency. Hence, if proposals are being sought, it is best for that to be reflected in the title. However, the titles used are less important than clear statements of intentions.

6. DEVELOPING THE SPECIFICATION AND CONDITIONS OF ENGAGEMENT

The key consideration in developing the documentation for issue to bidders is achievement of the project’s objectives including best value. This must be accomplished in a proper, impartial manner which will stand up to scrutiny. Invitations for bids should include information about the task, i.e. • the objectives pursued and the outputs sought, the terms of reference and other information

needed by bidders to understand the agency’s requirements; • the proposed conditions of contract; and information about the selection process, i.e: • the selection criteria; • the conditions of bidding including information about the process of selection and any

instructions on the format of bids. The information provided in invitations for the first stage of a two stage selection process, (where the intention is to develop a short list of bidders for the second stage) will normally be broader in nature and along the following lines:

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• the objectives and the nature of the task to be undertaken by the consultants; • a statement of the purpose of the first stage (to develop a short-list, etc) and an indicative

timetable for the commencement of the second stage; • selection criteria for short-listing; and • conditions of responding to the invitation. THE SPECIFICATION OF REQUIREMENTS AND CONDITIONS OF ENGAGEMENT The amount of information provided to bidders will vary according to the project’s complexity from several pages upwards. For many consultancies, all the information can be in one document called “an invitation for proposals” or “the specification” or “the brief”, for example. The information about the task covering why the job needs to be done, the outcomes sought and the outputs required is often called “the specification of requirements”. A comprehensive specification will include the terms of reference and information on timing and oversight and reporting arrangements. The recommended inclusions are listed under A “Specification” hereunder. Bidders also need to know the contractual conditions applicable to the task. For example, who will own the outputs of the consultancy? When will payments be made? Some recommended inclusions are listed under B “Conditions of Engagement” hereunder. The selection criteria should be established in advance and set out in the invitation to bid documents. This enables bidders to show how well they meet the criteria and enables the agency to make a decision with the best available information. Details re Selection Criteria are listed under C hereunder.

A. The Specification

The specification serves as both a planning and control mechanism for the project and a prescription for results (outputs) to be achieved by the consultant. The specification, in the last resort, is also the document protecting the agency’s legal rights. A clear and comprehensive specification of the required assignment is a prime importance if misunderstanding and other difficulties are to be avoided. This ensures that consultants have a satisfactory basis on which to assess the relevance of the skills, experience and capacity they possess, the extent of consultancy effort likely to be involved, the fees to be charged, the time the assignment should take and the extent of any supporting facilities or services which may be required. The size and scope of the specification will vary according to the project and its complexity. However, the following points should be regarded as minimum standards for all specifications, even for relatively small projects. For extensive projects each item should be covered in considerable detail to ensure that what is required is perfectly clear. The undermentioned points should be used as a checklist. Recommended Inclusions in Specifications of Requirements Note that it is not necessary to use the particular headings shown below and two or more of the items can be combined under one heading. The objectives and the context: Understanding these is critical to the consultant’s appreciation of the agency’s needs. The documentation should include:

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• a statement of what the agency wants to achieve as a result of the project with a focus on the desired outcomes as distinct from the outputs sought from the consultant;

• a statement of the background and the context in which the consultancy will occur. Any overriding or limiting considerations of general policy should be mentioned and problems to be solved should be identified and described. The outputs sought: A very clear statement must be included of the specific things the consultant is expected to produce and/or do in satisfaction of the consultancy contract. The outputs should be measurable so that there can be no doubt as to the client’s expectations. The terms of reference: The terms of reference set out the substance and scope of the consultant’s task and define the boundaries to be worked within. The section of the documentation headed “terms of reference” will often include other components listed here such as the outputs sought, the individual tasks to be performed and relevant legislation and policy to be observed. In order to benefit from the consultant’s expertise and innovation, it is not good practice to prescribe the processes the consultant should follow other than processes which are considered essential, such as consultation with various parties and analysis of certain things. The individual tasks to be performed: Where there are such essential processes, they should be stated at the outset. If the consultancy is complex it may be appropriate to divide the project into sub-tasks or stages, each with a measurable result specified in the documentation. Additional information: Any necessary background information needed to assist the consultants in preparing their proposal should be provided. This might cover organisation charts and functional statements, annual reports, copies of earlier internal management reports relevant to the subject matter area, samples of forms, procedure statements, work measurement statistics, details of information flows and the like. The health organisation should be selective in preparing the material as in many cases, it may be necessary only to indicate that the material is available for consideration. It may also be appropriate to retain some material, not essential to the proposal stage, for examination only by the selected consultant. Relevant legislation and policy: Consultants are to comply with relevant Government policies. This includes legislation, policy or any other form of requirement which is relevant to the matter at hand which by its nature should apply to advisers to the agency as well as to the agency personnel. Areas which for instance may be relevant include procurement policy and codes of practice, ethical conduct, equal employment opportunity, environmental management, OH&S, and workforce requirement should be highlighted in the project brief provided to the consultant. The final reporting requirements: Many consultancies culminate in the production of a final report. Anything specific the agency has in mind about review of drafts and the coverage, format and number of copies of the drafts and final report should be stated. The cost of the report is normally included in the consultancy fee. The resources to be allocated by the agency to the project: Include such details as accommodation, equipment and staff support as appropriate. Resource provision may be negotiable depending on the content of the selected bid.

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The timetable: An indication of timing should be given including where appropriate a timetable for the production of periodic reports and the achievement of specific results. The timetable should be flexible enough to allow negotiation. A statement indicating when the consultancy is expected to commence and finish will often suffice. The oversight arrangements: These are best considered in the planning stage prior to the invitation for bids and disclosed so that bidders have an understanding of the working arrangements envisaged. The oversight will often include: • a steering committee of key stakeholders and/or a senior executive, and an officer for day to day

communication (as discussed in the previous section); • periodic reporting (say, fortnightly in the form of brief written reports on progress and monthly

in the form of written and verbal presentations to the steering committee).

B. Conditions of Engagements

This list is not comprehensive and there will be conditions dictated by circumstances. Legal advice should be sought if there is any doubt as to appropriate inclusions. See Appendix 4 for details re “Legislation and Policies to be Observed by Consultants”. Conflict of interest: Consultants should be required to disclose in writing any existing conflict of interest and any conflict of interest which arises at any time during the consultancy. They may also be asked to advise the agency of the steps they consider appropriate to protect the agency’s interests. Ownership of intellectual property, disclosure and/or subsequent use of information: Where appropriate these factors should be specified. This may be necessary to protect the health organisation’s interest in software or systems being developed, or for copyright of other items being written or produced. Some invitations seek preliminary proposals and ideas which are used as a basis for short-listing firms for a second round of bidding. In such cases agencies must respect the confidentiality of responses and the intellectual property of firms. This is particularly relevant where an agency may be tempted to use an innovative idea of a firm in a specification for issue to other firms. It is desirable to declare any such intent so that the owner of the intellectual property rights can elect to grant a licence to use the rights and to negotiate an appropriate fee and/or restrict the form of licence. Legal advice should be sought before pursuing that option. Equal Employment Opportunity Policy: Consultants should be aware of the public sector’s policy on equal employment opportunity and anti-discrimination legislation. If recruitment of public sector personnel is the task of the consultant, or part of the task, EEO requirements, including the relevance of the agency’s EEO management plan, should be highlighted in the specification requirements. The information in the specification should include: • strategies in place to obtain diversity in the pool of applicants; • opportunity for applicants to obtain information about the position; • selection criteria includes equal employment opportunity principles;

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• selection panels include both male and female members; • the short list of suitable candidates includes people with diverse backgrounds. If development of training material for public sector personnel is the task of the consultant requirements need to be included in the specification such as - gender-neutral language, culturally appropriate content and the use of material which reflect public sector equal opportunity policy. Personnel nominated by a bidder to undertake the consultancy: Because of the particular expertise and experience of the individual involved, an important safeguard is to stipulate that personnel nominated in the bid and/or allocated to the task by the consultancy firm cannot be changed without the concurrence of the client. Termination of and variations to the contract: Provision should be made for the contract with the consultant to be terminated or the work content reduced or varied upon the consultant being given written notice. Public officials: Consultants are deemed to be public officials under the provisions of the ICAC Act and the Protected Disclosures Act as they relate to corrupt conduct and making disclosures. Arrangements for payment of fees: It is important to state the basis upon which fees will be paid. This may be, for example, upon the successful completion of the assignment or upon the completion of measurable interim outputs or stages, with a final payment at the conclusion. The consultant is to be instructed that he/she will be required to substantiate on-cost payments, e.g. expenses, made to them if requested to do so. Such substantiation will take the form of production of proof of travel means, periods of travel, costs for meetings etc. This condition is to be included in any formal contract entered into with consultants. Indemnity and insurance: Where appropriate, the health organisation should be indemnified against workers compensation claims and public liability claims. Where the consultant is engaged to provide advice of a type which is normally underwritten by professional indemnity insurance (such as legal or engineering advice), proof of such insurance may be appropriate. Because a firm can have a number of business names, it may also be appropriate to require that the firm be contracted in the name under which it is insured for professional indemnity. As an added precaution, a check with the agency’s risk management adviser may be warranted to ensure that the contractual arrangements proposed do not unacceptably cap or exclude the liability of the consultant. Future Consultancies and Associations Any role to be played by the consultant in implementing approved changes should be foreshadowed. It should be made very clear that selection to carry out the assignment in no way implies a commitment to engage the prospective consultant to carry out subsequent, related phases or to implement the report. It may even be appropriate to make the successful consultant ineligible to carry out subsequent action. Where the consultant carrying out the assignment would be a strong contender for any implementation phase associated with it, because of the nature of the consultancy market, it is often preferable for any economic appraisal component of the assignment to be carried out by another, independent consultant. The successful consultant should not have any commercial association with other organisations that would have a pecuniary interest in supplying any of the material or service requirements of the project under consideration.

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C. Selection Criteria and Conditions of Bidding

THE SELECTION CRITERIA Best value: The best value bid will be the one which best addresses the selection criteria determined by the agency. Best value bid does not simply mean the “lowest cost”. It is the product of the factors, such as expertise and experience, which are reflected in the selection criteria. Choice of selection criteria: The choice of the criteria must be governed by relevance to the project and the practicality of assessment. A typical set of criteria is: • The degree of understanding of the agency’s requirements demonstrated by the bidder. • The appropriateness and quality of the method the bidder proposes to follow including the

approach to the task and the proposed schedule and timetable of activities. • The firms’ experience in the related area. • The expertise and experience of the people proposed to undertake the work. • The total cost including any significant, additional use of the agency’s personnel and facilities

etc. which each bidder’s proposal would require. The expertise and experience of the people proposed to undertake the work: Of particular importance is information about the personnel who will undertake the consultancy. It is good practice to ask firms to set out in their bids the extent that each nominated person will be involved in the project and what their role will be. Otherwise, a bidder’s employees who eventually do most of the project work might be much less experienced than the persons highlighted in the bid proposal. Where multiple skills, which are not usually found together in one firm, are called for, it can be appropriate to state that firms may have to obtain skilled team members by contract from other firms for discrete sections of the task. This clearly signals the serious intent of the agency to obtain the skills sought. THE CONDITIONS OF BIDDING AND OTHER INFORMATION FOR BIDDERS Time and place for lodgement: As a minimum, the conditions of bidding deal with the information required from bidders and the place and deadline for lodgement of bids. Detailed information requirements: The extent of information sought should be proportionate to the scale and cost of the project. The nature of the information required will be virtually determined by the selection criteria and the conditions of engagement. It is usually worthwhile to specify the information sought (such as the personnel details noted above) and the format in which it should be presented. Specifying a format facilitates comparisons between bids. It can also be appropriate to ask that bids be limited to a maximum number of pages to save costs for all parties.

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Advice of your intentions: Bidders should be informed of the broad selection processes. For example, if the purpose is to determine a short-list for a second stage bidding process, this should be stated. It is also good practice at the outset to inform bidders of the nature of any non-confidential information about the winning bid which will be released or made available to inquirers. See provisions of Premier’s Memorandum No 2000-11 contained in Section 3 of this manual. (See the Freedom of Information Act 1989, schedule 1, clause 7, concerning the protection given to commercially valuable information.)

7. INVITING AND RECEIVING BIDS AND TENDERS

(See Chapter 3 of this Manual for details re periods for advertisements, receipt of quotes/ tenders, tender opening etc.) INVITING BIDS The procedure for inviting bids for consultancy services is essentially dependent on the estimated cost and time of the proposed consultancy and the range of suitably qualified consultants to be given the opportunity to bid for the project. The agency should ensure that invitations are appropriately circulated in a manner most suitable to the specific nature of the consultancy. (e.g. specific industry publications, ethnic press, local newspapers). Invitations should clearly indicate that an agency has an equal employment opportunity policy. Adequate steps are to be taken to maintain confidentiality of tenders/quotations. Financial levels and associated policy relating to suitable means of inviting bids and tenders are as contained under “Procurement Levels and Seeking Bids” in Part 5 of this section. In those cases where, despite reasonable efforts to obtain three quotes/tenders, less than three are received action may proceed to engage a consultant provided that full details of the action taken is documented. In all cases a nominated officer within the agency should give prior formal approval to the actual inviting of bids or tenders and the format, including a reasonable time period for their acceptance. A record of this approval with all relevant documents should be maintained. The senior officer giving approval to invite bids must be fully satisfied that the invitation covers a discrete project and does not bind the agency to further commitment to the selected consultant for additional work outside that being tendered. This officer should also be satisfied that the projected work has not been “split” to enable the total project to be kept below specific expenditure approval levels.

It is advisable for open-ended or roll-over agreements to be avoided.

A sample invitation to a consultant to make a submission for undertaking an assignment is at Appendix 1. Invitations should allow sufficient time for bidders to fully develop bids. The problems caused as a result of unduly short tender periods include weak competition, poorly prepared proposals and inadequate understanding of contract requirements, the impacts of which may not be manifested until after the consultancy commences. When in doubt it is reasonable to ask several firms for the period they would require to prepare a bid for the type of business on offer.

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The same conditions must apply to all bidders. The same opportunities for obtaining information and, as far as practicable, the same information, should be provided to all bidders. Successful bidders should be made aware that information concerning their bid and resulting contract will be disclosed in accordance with Memorandum 2000-11. (See Chapter 3.) CHANGES IN REQUIREMENTS AFTER INVITATIONS ARE ISSUED All bidders must be advised of any changes to the conditions or specification or other information changes which occur after the issue of invitations and before the closing date. Similarly, where an inquiry reveals a significant error, ambiguity or discrepancy, all bidders must be advised. The advice to bidders of changes to the conditions or specification becomes part of the tender documents issued by the agency. The names and addresses of persons/firms who have been provided with the invitation documents should be recorded to enable contact if changes occur to the conditions or specification. If warranted by the nature of the changes, the time allowed for bids to be lodged should be extended. Notwithstanding the above, it may be appropriate to deal with minor changes to the specification or other documents in pre-contract negotiations, near the conclusion of the selection process, with the preferred bidder. BRIEFING CONFERENCE For some assignments, particularly those which are large or complex, it may be useful to supplement the written briefing material by holding a briefing conference for the pre-selected consultants. Such a conference provides an elaboration of the contents of the briefing documents and given the consultants the opportunity to ask questions. It may serve to reduce the time spent by officers in assisting individual consultants during the preliminary survey stage. Clear and adequate briefing is essential to ensure fair competition between consultancy organisations. To this end, agencies should ensure that consultants have an equal opportunity for access to relevant information. SECURITY OF BIDS RECEIVED (see also Chapter 3 for detailed procedures) Bids received should be recorded and handled so as to preserve their confidentiality. Confidential information from bidders must not be given to competitors or otherwise disclosed, subject to public release of information about the winning bid at the completion of the selection process. It is best practice for the opening and recording of bids received to be undertaken all at once, very shortly after the deadline, by a number of employees who are independent of the assessment process. Tender opening committees shall consist of no fewer than three persons. Traditionally a tender box with two different locks, the key for each securely held by different employees, has been and continues to be a sound approach to ensuring security during the lodgement process. Other means including electronic processes may also be appropriate so long as the security and the integrity of the tender processes can be assured.

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LATE BIDS It is the responsibility of bidders to ensure that bids are submitted on time and a firm rule to not consider late bids may be adopted by individual agencies. Late bids may only be considered if the circumstances were beyond the control of the bidder and it can be demonstrated that there is no advantage to the bidder and the integrity of the bidding system will not be compromised. If the only bid received is late, it may be considered if it conforms with the specification.

8. SELECTING THE CONSULTANT

ASSESSMENT OF BIDS The grounds on which a particular consultant is finally selected for an assignment will vary from case to case but must conform with the New South Wales State Government’s Purchasing and Preference Policies. The engagement process for consultants is more akin to a staff recruitment action where the task is to obtain the most appropriate skills and expertise for the position. Many consulting firms have high staff turnovers and, therefore, in selecting the consultant it is important to be satisfied that the actual personnel to be provided by the firm have the appropriate expertise and experience. Bids, quotes or tenders received should be checked to ensure whether: • there is a sufficient range of legitimate bids, quotes or tenders to ensure value for money

comparisons; • they conform with the specification and time criteria provided; and • they are within budget limits for the project. Should this not be the case and it is decided to

consider additional expenditure, a report should be provided detailing why the estimate was exceeded and confirming whether or not the scope of the work was correctly identified by the agency and understood by the bidders.

Bids should be assessed in a consistent fashion against the pre-determined criteria. This should be done by people with relevant skills and knowledge appropriate to the nature, value and importance of the projects and who are free of any conflict of interest which might undermine the objectivity of the assessment. In all cases an officer with appropriate professional understanding of the work to be performed should be involved in the selection of the consultant. Where an agency does not have a staff member with appropriate professional expertise, an officer from another agency should be sought. Assessments for higher value projects, particularly those over $50,000 should involve three or more assessors to facilitate a balanced assessment. To help ensure that fairness and impartiality are seen to have been strong features of the assessment, it may be appropriate to provide for the participation of an officer from outside the agency. It will often be appropriate to interview the two or three leading contenders. That will enable the agency to gain a better understanding of the bids and the bidders and to explore the depth of understanding each bidder has of the task and quality of the proposed methods of approach. It is important to allow each of the interviewed bidders the same opportunities to prepare and to put forward their approach.

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LATE CHANGES TO THE REQUIREMENTS If the requirements alter in the course of the assessment process, consideration should be given to notifying all bidders of the change and giving them an opportunity to adjust their bids accordingly. If the alterations are substantial, consideration should be given to recommencing the process. Important considerations include the impact the change might have on: • the value and nature of the contract and the extent of private sector interest; • the relativity of the current bids; and • the fairness and cost of going back to bidders on the matter. In some cases the most fair and reasonable decision may be to ignore the change for the purpose of the assessment and to negotiate the alteration with the successful bidder after the bidder has been selected and prior to finalising the contract. In these circumstances however, the alteration should not be so significant as to give unsuccessful bidders a basis to complain that what is contracted is substantially different from that identified in the invitation to bid. Changing a requirement during the assessment process can very easily lead to suggestions of impropriety by unsuccessful bidders. JUSTIFICATION FOR SELECTION The reasons for the selection and for passing over bids should be documented. The extent of documentation will vary with the complexity and value of the project but should cover: • a summary of quotes/tenders received in ascending order of price; • an evaluation showing whether the quotes/tenders conform with the specification, and giving

any reasons for variations; • advice as to how quotes/tenders were invited and when and how they were received and

recorded; • full details of the recommended quote/tender and the justification for the recommendation. The justification for the recommendations based on the selection criteria including statements confirming that: 1. Whether the specification has been fully satisfied or any variations are acceptable. (Such

variations should be detailed.) 2. The quote/tender is acceptable in terms of conditions and limitations, if any, accompanying it. 3. The price is reasonable, conforms with market prices, and rise and fall and/or any other price

variations are acceptable. 4. The organisation making the bid has the resources and ability to successfully undertake the

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5. The performance of the organisation to be engaged has in previous similar projects for the agency or other agencies been evaluated as satisfactory.

6. In relation to a staff recruitment consultancy, the consultant has satisfied the agency that:

a) if tests are to be used they are relevant to the particular job, gender-neutral and culturally appropriate with provision made for persons with a disability to enable them to sit the tests;

b) an effective strategy for attracting applicants from EEO target groups is in place;

c) there will be appropriate representation of target groups on selection committees.

The recommendation need not solely be governed by the selection of the lowest offer received. No consultancy should be justified merely as an extension of previous work undertaken. The principal concern is to obtain best value for money whilst maintaining full probity and equality of competitive opportunity for bidders. The approving person for the acceptance of the recommended quote/tender should be an appropriate senior authorised officer. The employee who analyses the bids and is responsible for preparing the above documentation and making a selection should not be the final person who approves the selection. All documentation, including the bids received, must be kept for record and audit purposes. Approvals of consultancies should be in accordance with current government policies, legislation and regulations, as applicable, which include the following: • Purchasing & Supply Manual • Anti-Discrimination Act 1977 • Annual Reports (Departments) Act 1985 and Regulations • Annual Reports (Statutory Bodies) Act 1984 and Regulations • Government Purchasing Policy covering offsets, preferences etc. (Department of Business and

Consumer Affairs). A certification as to compliance with all relevant policy and procedures should be incorporated in the recommendation to the approving officer.

9. ENGAGING THE SELECTED CONSULTANT

ENGAGEMENT METHODS Following the approval to engage a consultant a formal letter of engagement, together with a contract document if considered necessary should be forwarded to the selected consultant. It will be essential to obtain legal advice for complex and high cost consultancies where it may be necessary for the contract to be in the form of a deed.

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The consultant should be required to provide a formal reply accepting the terms and conditions of engagement and, in relevant cases, the signed contract. At this stage, if there is any doubt as to appropriate action legal advice should be sought promptly. The letter of engagement or form of contract should refer to, amongst other things: • the requirements set out in the original specification and conditions of engagement; • the proposals set out in the winning bid; • the content or result of any subsequent correspondence and/or negotiations; • the indemnity, insurance and any other requirements which may need to be fulfilled; and • any matter warranting special mention (such as ownership of intellectual property if that needs to

be made clear). The letter of engagement or contract should be capable legally, financially and operationally of protecting the interests of the agency. The consultant is to be instructed that he/she will be required to substantiate on cost payments, e.g. expenses, made to them if requested to do so. Such substantiation will take the form of production of proof of travel means, periods of travel, costs for meetings etc. This condition is to be included in any formal contract entered into with consultants. As a general rule a letter of engagement may be used for smaller consultancies where the consultant does not need to be on site or use agency facilities and where a written report as outlined in the specification is required as the product of the consultancy. A formal contract document should be used on those occasions when the consultancy is of a large or complex nature or a particular product or output is required to a specified standard. The letter of engagement or contract should refer inter alia, to: 1. the original specification; 2. the tender, quote or bid submitted; 3. any subsequent correspondence and/or negotiations between the parties; 4. the agreed fee and method of payment (with any progress payments linked to satisfactory

performance of specific tasks); 5. the basis (if any) for fee and work variations; 6. provision for termination; 7. the time period for the consultancy; 8. the personnel confirmed by the consultants to work on the project; 9. the agency’s responsible officer for the consultancy;

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10. the guarantee provided by the consultant in respect of adequate and proper completion of the proposed work;

11. penalty clauses (where applicable); and 12. agreed documentation to be provided prior to final payment for the consultancy. 13. Legislation and Policies to be observed by consultants (see Appendix 4). The letter of engagement or contract should be legally, financially and operationally capable of protecting the interests of the agency. (See Appendix 2 for draft consultancy agreement with Crown Solicitor’s Office clarifications.) Ensuring External Consultants are Not Deemed to be Employees Agencies must be careful to avoid inadvertently establishing circumstances whereby an individual consultant or contractor can be considered to be an employee and be eligible for employee benefits such as workers’ compensation, despite a contract which suggests the person is not an employee. This could arise, for example, by the person being subject to the routine direction and control of the agency. The Public Employment Office of Premier’s Department can provide advice to agencies on clarifying the distinction between employee and contractor. SUPERANNUATION LIABILITY - CONSULTANTS/CONTRACTORS The attention of all Areas, Hospitals, and other Units is drawn to the potential liability for superannuation contributions when employing consultants and contractors. The Superannuation Guarantee (Administration) 1992 Act contains an expanded definition of “employee” under s.12. The meaning of the term has also been subject to interpretation through an ATO ruling on the Superannuation Guarantee Act (No SGR 93/1). Under s.12(3), a person who has entered a contract for services will be considered an employee for the purposes of the Act if the contract “is wholly or principally for the labour of the person”. It is therefore irrelevant whether they are designated as a contractor or consultant; what is relevant is the actual nature of the relationships between the principals of the contract. SGR 93/1 contains the following guidelines to assist in the interpretation of this provision (a) a contract for labour is to be distinguished from a contract to supply goods or materials; (b) a contract will be principally for labour when more than half (50%) of the contract is for

labour; (c) a contract for labour must be personal. If it is a contract with a company or trust to provide the

service, an employment relationship cannot be established with the person actually providing the services,

(d) labour includes mental and artistic effort as well as physical toil;

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(e) if the contract allows the person to have the work of the contract performed by another, then it is not a contract for labour.

Contributions do not have to be paid for consultants/contractors deemed to be employees who are: • paid less than $450 in any calendar month; • under 18 years of age working for not more than 30 hours per week; • aged 65 or over; • paid to do work of a domestic or private nature for not more than 30 hours per week. When formalising arrangements with consultants/contractors deemed to be employees, it should be clearly established whether the SGC liability is to be additional to, or to be deducted from, the agreed fee for the assignment. The following SGC contribution rates apply:

- 1 July 1993 - 30 June 1995 x 5% - 1 July 1995 - 30 June 1998 x 6% - 1 July 1998 - 30 June 2000 x 7% - 1 July 2000 - 30 June 2002 x 8% - 1 June 2002 onwards x 9%

The superannuation contributions must be paid into a complying fund, such fund being one which meets the standards set by the Commonwealth Government. A check that a fund complies can be made by contacting the Insurance and Superannuation Commission (current telephone 13 1060). It is suggested that when employing consultants/contractors deemed to be employees the consultant/contractor be requested to provide a letter from the fund which provides an assurance that they are a complying fund, and that the consultant/contractor also be requested to provide the relevant forms for completion. ADVICE TO UNSUCCESSFUL BIDDERS (See Chapter 3 re Premier’s Memo No 2007-01 re disclosure of information) Unsuccessful bidders should be advised promptly of the decision. After acceptance of the contract by the winning bidder, unsuccessful bidders may be informed of the winning firm or person and, unless there are compelling reasons to do otherwise, any non-confidential details from the winning bid including price. They may also be informed as to the weaknesses in their own bid. In providing feedback on weaknesses, any comparisons should be made against the selection criteria rather than with details of the successful bid. Explicit advice about future bids should be avoided. The timing of the release of any information needs to be managed to avoid premature disclosure which might impact on the finalisation of the contract with the winning bidder.

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10. MANAGING THE CONSULTANT’S WORK

Effective oversight of consultancies is essential to ensure that: • the client gets value for money and that cost overruns are avoided; • the client gets the product that has been specified (satisfying the terms of reference); • unnecessary delays are avoided and the work is completed on time to the quality required; • disputes can be settled easily without extended litigation. Typical steps in the management of consultants are outlined below, (see also Part 4 on “Managing the Project”). 1. Appoint a project officer(s) responsible for the performance and management of the

consultant. 2. Appoint a management committee to oversight progress. 3. Define role of management committee/officer; explain this role to the consultant(s). 4. Institute adequate record keeping procedures. 5. Define standards and set meeting and target dates for the consultant. 6. Develop a mechanism for dealing with significant changes in cost, work or target dates. 7. Develop a procedure for dealing with unsatisfactory performance, where necessary with senior

management. 8. Evaluate the work of the consultant, and keep records of this evaluation for future reference. The officer nominated as the project officer in the letter of engagement should normally be responsible for: • the performance of the consultant in meeting the requirements of the specification; • supervising the work; • liaising with the consultant; • ensuring legislative and policy requirements are adhered to; • the terms and conditions of engagement being followed; • the payment of the consultant’s fees being approved only when the services required have been

satisfactorily provided; and • ensuring the payment of the consultants on cost fees (e.g. expenses) only being approved where

substantiation has been provided by the consultant, e.g. proof of periods of travel etc. Whilst it would be preferable to undertake this substantiation on all claims, it is only necessary on the initial claims and then on a sample basis thereafter. Substantiation methods can incorporate:

- requesting production of air ticket stubs; - obtaining receipts for costs associated with out-of-pocket expenses.

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Sound planning of the oversight arrangements including periodic reporting on progress, and their appropriate implementation will contribute to these results.

The consultant should be regarded in all major respects as part of the agency’s team. There are several advantages to this approach. Firstly, communication is open and free and much more effective. Secondly, if the consultant has special expertise it can be stimulating and beneficial for agency staff to work with the person. Thirdly, it is not unusual for unforeseen events to arise calling for the consultant and the agency to combine in determining the best way of dealing with the situation.

Poor or misdirected performance on the part of the consultant should be addressed promptly and before serious damage occurs. However, unless there are compelling reasons to move quickly towards termination, the termination provisions should not be applied until that avenue is considered the most practical and justifiable option.

Particular care should be taken to ensure that any advertisements placed by the consultant on behalf of the agency conform with government policy and legislative requirements.

It is essential that the consultant is managed in accordance with the terms of the contracts. Particular care should be paid to any sub-contracting arrangements which must fall within the scope of the contract and be closely monitored in accordance with the contract. See Clause 3.7 of the “Contract” at Appendix 2 which deals with sub-contractors.

VARIATIONS AFTER THE CONSULTANCY HAS COMMENCED Variations to the consultancy during the progress of the project must be reported upon without delay and prior approval obtained for any proposed significant changes in work or cost. Such variations are best approved by the Chief Executive or a designated independent senior officer. Variations to the scope of the work requiring increased payments to the consultant can at times be appropriate as a result of unforeseen circumstances. Particular care is needed to avoid: • variations being used by a successful low bidder to increase the value of the job; • variations being used to get around requirements for competitive bidding; • variations increasing the scope of the consultancy out of proportion to the original scope. All proposals for variations require very careful consideration, applying the principles of value for money, probity and accountability. Proposals to increase the value of the consultancy by 25 per cent or more demand a particularly thorough review. As noted above, “exceptional” cases should be treated very cautiously. It is not good practice for approvals for significant changes in work or cost to be given by employees directly involved in the supervision of the consultant. Proposals for such variations should be considered and determined by the Chief Executive or a designated independent senior officer. In all circumstances such approvals are to be able to withstand public scrutiny.

11. EVALUATION OF THE CONSULTANT’S PERFORMANCE

Evaluation of consultancy projects is essential in determining whether the project objectives have been achieved and whether the use of consultancy assistance was justified and ensure that the lessons of experience can be applied in the future. The evaluation of a project which involved the use of consultants should include both the performance of the agency and the performance of the consultant.

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An evaluation document should contain a statement of both direct costs incurred by the consultant (fees, travel, materials etc) and indirect costs borne by the organisation (facilities, clerical support, materials etc) together with the estimated cost and the originally agreed cost. If the project was divided into separate tasks, these costs should be allocated to the appropriate tasks carried out. Appendix 3 shows an example of an evaluation pro-forma which could be used. The evaluation should be completed prior to and forwarded with the recommendation for final payment to the consultant. The most important evaluations will be those undertaken for projects which were very successful and projects which were unsuccessful or which encountered serious difficulties. Very successful projects can offer models of best practice. As well, the lessons from such projects are usually the most suitable to publicise freely in the organisation. Unsuccessful projects and those which encountered serious difficulties are likely to reveal important lessons in the form of avoidable oversights and problems. While requirements for accountability must be observed, the evaluations are best undertaken and disseminated in a spirit of learning rather than attributing blame. It is particularly important to review the performance of the agency in an impartial manner when there is dissatisfaction about the consultant’s performance. This will ensure that the agency is not blind to any lessons from its own actions in the matter. The areas of interest in reviewing projects involving consultants include: Project formulation • objectives; • planning and management arrangements; • specification of need and other documentation given to bidders. Project bidding • the extent of competition, advertising, timing and related factors. Project operations • consultant’s performance • agency’s performance Factors to take into account when assessing the consultant’s performance are: • quality of work; • timeliness; • cost; • methodology; • working relationships; • other factors relevant to the project.

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The evaluation provides a judgement on competence of the consultant and in particular of the individual personnel who carried out the work. Such evaluation should be formally made and retained in a central register within the agency as a permanent record for possible future reference. These evaluations can then be utilised when considering a consultant for future work, or to assist other agencies in considering the consultant for similar projects. While the strict confidentiality of evaluations is essential, organisations are requested to discuss any unfavourable report with the consultants concerned and advise them of the record that is being retained.

12. REPORTING THE USE OF CONSULTANTS

ANNUAL REPORTS Public disclosure of consultancies is to be made in Annual Reports in accordance with the Annual Reports (Departments) Regulation 2000 and the Annual Reports (Statutory Bodies) Regulation 2000. In order to comply with the Regulations, agencies must include in their Annual Reports the following information concerning the engagement of consultants during the financial year. Where the cost of the consultancy is equal to or exceeds $30,000: • the project title (shown in a way which identifies the nature of the work); • the name of the consultant or consultancy firm engaged; and • the actual cost of engaging the consultant. Where the cost is less than $30,000: • the total number of engagements costing less than $30,000; and • the total cost of all such engagements. If no consultants were engaged during the year, a statement to that effect must be included in the Annual Report. If expenditure runs over more than one financial year, the amount spent in the year being reported should be stated. In fulfilling the above requirements, agencies also should group/categorise consultancies according to the nature of expenditure, and clearly describe the purpose of the consultancy. Categories of consultancy costs include: • Finance and accounting/tax • Information technology • Legal • Management services • Environmental • Engineering • Organisational review • Training Although consultancies under $30,000 are not required to be individually identified, they should still be categorised as above. Appendix 6 contains a sample disclosure report.

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APPENDIX 1

SAMPLE INVITATION TO CONSULTANT TO MAKE A SUBMISSION FOR UNDERTAKING AN ASSIGNMENT

You are hereby invited to submit a quotation/tender in respect of a consultancy assignment to be commissioned shortly by this health organisation. The assignment is - .................................................................................................................................. Terms of reference and working arrangements for the review are attached for your guidance. Enclosed are background information papers of the relevant area. If your organisation wishes to respond to this invitation it would be appreciated if ......... copies of your submission could be sent to: ..................................................................................................... by ............................................... The submission must include: a) An outline of the intended approach to the assignment. b) Information on other assignments or any other matters which you consider to be

relevant to your organisation’s competence to undertake the proposed assignment. c) Details of the names, intended extent of involvement and other relevant details, including

qualifications and experience, of the consultants it is proposed to use. d) A statement of fees proposed based on your organisation’s intended approach. It would

assist our consideration of your submission if, in framing the cost statement, you would distinguish between consultancy fees and other costs which might be associated with the conduct of the assignment (e.g. travel costs, fares, etc.). The person-day effort represented by the consulting fees should also be stated.

e) An indication of your organisation’s acceptance of the general conditions outlined in the

attachment to this letter and any other specific conditions or business arrangements you may wish to have applied to the assignment.

In order to elaborate on the terms of reference, and generally assist you to gain a full understanding of the review requirements, it is proposed to hold a briefing conference at ............................... on .............................. to which all the responding organisations are being invited. If you wish to confer in greater depth, arrangements for this can be readily made. Initial enquiries in relation to this memorandum or the assignment generally should be directed to: ...................................................................................................................................... Chief Executive

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APPENDIX 2

Premier’s Department New South Wales

Guidelines for the Engagement and Use of Consultants Version 4 July 2004

Attachment

Consultancy Agreement Guide Notes

Revised March 2005

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Consultancy Agreement The Crown Solicitor’s Office has amended and updated a Consultancy Agreement which had previously been used by the Premier’s Department and a number of agencies as a precedent. This updated document may assist agencies in preparing their own agreements. It is strongly recommended that any agency intending to use this Agreement seek legal counsel in formalising and finalising the final Agreement. The updated document takes into consideration recent changes in the law dealing with privacy, disclosure of personal information and moral rights. Matters such as liability caps, levels of insurance, questions of indemnity and intellectual property rights are just a few issues that need consideration in relation to specific clauses. The Agreement also contains clauses regarding dispute resolution reflective of the Government’s policy in this regard. This is another issue that may or may not be appropriate depending on the particular consultancy. The Crown Solicitors Office has prepared Guide Notes to assist the use of the updated Consultancy Agreement. Please read through these Guide Notes before using the updated Consultancy Agreement as a base. Guide Note 1 Government Departments are not legal entities but, in law, are merely emanations of the Crown which is a legal entity. Where the entity entering into the Consultancy Agreement is: • a Government Department; or • a Government Agency that is not

a legal entity or has no separate legal status,

the following description of the Principal should be used:

“[insert name and title of the Minister/Chief Executive/senior office holder with appropriate delegation] of [insert name of Government Department/Government Agency] acting for and on behalf of the Crown in right of the State of New South Wales”

Where the Government entity entering into the Consultancy Agreement is a legal entity (eg., a corporation established under the State Owned Corporations Act 1989 (NSW) or under other legislation), the corporate name of the entity should be used. The corporate entity should not generally contract so as to bind the Crown. See the Premier’s Memorandum No.91-2 (Guidelines for the formation and operation of subsidiary companies by departments and statutory authorities). Check also that the corporate entity has the statutory power to enter into the Consultancy Agreement. Guide Note 2 Where the Consultant is a company, the full corporate name of the company should be used. A free company name search is available at http://www.search.asic.gov.au/gns001.html . Where appropriate, a company search on the Consultant should be undertaken by the Principal before entering into the Consultancy Agreement. A free Australian Business Number search is available from the ATO’s website http://www.abr.business.gov.au .

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http://www.search.asic.gov.au/gns001.html�

http://www.abr.business.gov.au/�


Where the Consultant is/are an individual/individuals, the full name(s) of the individual(s) should be used. Where the Consultant is an unincorporated partnership, the partnership name can be used. The Rules of Court in each Australian jurisdiction now state that a partnership can be sued in the firm’s name. A business name is not a legal entity and must not

, by itself, be used as the name for the Consultant. The name(s) of the owner(s) of the business name should be inserted as follows:

“[insert name of first owner] of [insert address of first owner], [insert name of second owner] of [insert address of second owner] and [insert name of third owner] and [insert address of third owner] trading under the business name “[insert business name]”

Where appropriate, a business name search should be undertaken by the Principal to ascertain/confirm the identity of the owners of the business name. Care should be taken when contracting with unincorporated associations (eg., a club or society) as it may be difficult to enforce a contract against the members or the committee members of an unincorporated association. Legal advice should be sought in this case. Where an association is incorporated (eg., under the Associations Incorporation Act 1984 (NSW)), the association can be sued in its own name. The name of the incorporated association should be used. Where the Consultant is a ‘consortium’ of legal entities, care should be taken to identify the appropriate parties who should enter into the Consultancy Agreement. The Consultancy Agreement has been drafted on the basis that its binds each entity separately and all the consortium entities jointly (see Clause 1.7). Guide Note 3 Where appropriate, other defined terms, reflective of the particular services that are to be provided by the Consultant, should be included in Clause 1.1. Guide Note 3A Consideration should be given as to whether sub-clause (g) in the definition “Confidential Information” is necessary. Where appropriate, sub-clause (g) should be deleted. Guide Note 4 The Consultancy Agreement has been drafted on the basis that the “Request for Tender” issued by the Principal and the “Proposal” submitted by the Consultant will form part of and be attached as Annexure “A” and Annexure “B” respectively, to the agreement. It is also assumed that an adequate description of the “Project” and the “Services” is set out in the Request for Tender and the Proposal. Where: (a) the “Request for Tender” and the “Proposal” are not to be annexed to the Consultancy

Agreement; and/or (b) the “Request for Tender” and the “Proposal” do not contain an adequate description of the

Services to be provided,

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the definitions of these terms should be amended as appropriate. If necessary, a full description of the Services should be included as an additional schedule to the Consultancy Agreement. Guide Note 5 The Consultancy Agreement has been drafted to allow for the “Project Objectives” to be set out separately in Schedule 2. Where there are no project objectives for inclusion, that definition may be omitted from Clause 1.1. It will also be necessary to omit all references to the “Project Objectives” in the definition of ‘Services’, in Clause 2.2 and in Schedule 2. Guide Note 6 The timeframe within which the consultancy services are required to be provided should be specified in the agreement – there is provision in Schedule 3 of the Consultancy Agreement for the timetable to be included. Where “time is of the essence” in relation to the provision of the consultancy services, Clauses 3.1 should be amended. Clause 8 (which permits an extension of time) may also need to be amended to suit the particular requirements of the consultancy. Guide Note 7 To ensure that the particular expertise or experience of the individuals who have been nominated in the Consultant’s proposal or tender are available to carry out the services, the names and details of such individuals should be specified in the Consultancy Agreement (see Item 3 of Schedule 1). Clause 3.4 provides that the Consultant may not substitute another person for a Specified Personnel without the Principal’s agreement. Guide Note 8 Clause 3.5 requires the Consultant to provide progress reports to Principal. The frequency of such reports should be specified. There is also provision for details of any other reports which are required to be provided as part of the consultancy services to be specified in Schedule 5 of the Consultancy Agreement. Guide Note 9 The basis upon which the fees for the consultancy services should be paid (eg., periodically, on specific dates and/or on the achievement of specified milestones) should be set out in the Payment Schedule. Where appropriate, the basis upon which the Consultant’s expenses will be reimbursed, should be specified (eg. as per the budget set out in the Consultant’s proposal, as set out in an annexure to the Consultancy Agreement and/or as from time to time agreed in writing). (See Clause 6.3) Guide Note 10 The confidentiality and privacy provisions contained in Clauses 10 and 11 will need to be modified where the Consultant requires reciprocal confidentiality and privacy obligations from the Principal.

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Guide Note 11 Copyright and other intellectual property right issues require careful attention. Clause 12.1 has been drafted on the basis that the Principal will own any new intellectual property rights in any New Contract Material which is brought into existence by the Consultant in the course of performing the Consultancy Agreement. The Consultant may, in some cases, insist that it owns any newly created intellectual property rights. Where the Consultant insists on owing the newly created intellectual property rights, the Principal should ensure that it obtains an irrevocable perpetual licence to use such intellectual property rights. Clauses 12.1 and 12.2 will need to be redrafted as appropriate. Guide Note 12 “Moral rights” are rights relating to a creator’s reputation in connection with his or her work. Moral rights are granted only to individuals, generally last as long as the copyright in the work and apply to a wide range of works including: • literary works such as manuscripts, articles, other text materials, software and databases; • artistic works such as photographs, paintings, drawings, maps, architecture and sculpture; and • dramatic and musical works and cinematograph film. The Copyright Act 1968 (Cth) recognises three moral rights: 1. the right to be named as the author or creator of the work, known as the right of attribution of

ownership; 2. the right not to have authorship of the work falsely attributed, known as the right against false

attribution; and 3. the right not to have the work altered in a prejudicial way, known as the right of integrity (eg,

distortion, mutilation or material alteration of the work which is prejudicial to the creator’s honour or reputation).

Remedies available to the creator of the work for infringement of his or her moral rights include damages, an injunction to prevent or stop the particular activity constituting the infringement, a public apology or an order to remove or reverse the derogatory treatment of the work. A “defence” applies if the infringing act was reasonable having regard to all of the relevant circumstances. Section 195AR of the Copyright Act lists various factors to consider – for example, the nature of the work, purpose for which the work is used, relevant industry practice, the difficulty or expense that would have been incurred as a result of identifying the creator and so on. Copyright creators can give consent to acts or omissions (whether past or future) which may otherwise infringe their moral rights. Generally, consent may only be given in relation to: (a) specified work(s) existing when the consent is given; or (b) specified work(s) of a particular description, the making of which has not begun or that is/are in

the course of being made. However, blanket consents may be given by an employee for the benefit of his/her employer in relation to all works made or to be made by the employee in the course of his/her employment (for example, as a term of their employment contract).

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Where the creator is a contractor or consultant, consents must be specific, both in relation to the works and the acts or omissions to which the consent applies. (See ss. 195AW and 195AWA, Copyright Act). If the Principal proposes to use the New Contract Material for a purpose or in such a manner that would otherwise infringe the moral rights of the Consultant or the creator of the material, the specified acts or omissions which would otherwise infringe the Consultant’s/creator’s moral rights should be listed in Item 7 of the Schedule 1. Guide Note 13 Appropriateness of the indemnity clause is a risk management matter for the Principal to consider and any such clause should comply with the TMF’s contract of coverage. If there is any doubt, the advice of the TMF Fund Manager should be sought by the Principal. Note that an indemnity has not been provided in respect of losses suffered through the breach of the agreement. This is because the view has been taken that any indemnity for losses caused by breach would deliver no greater remedy that a suit for breach. Note that a Consultant might request the incorporation of a limitation of liability provision which: • exclude implied warranties other than as expressly provided for in the Consultancy Agreement; • limits the Principal’s remedies to re-performance/repair as permitted under the Trade Practices

Act 1974 (Cth); • caps the Consultant’s liability; and/or • excludes liability for consequential losses. The Principal should vigorously oppose the incorporation of any such provisions. As in the case of the indemnity provision, ultimately the appropriateness of a limitation of liability clause is a risk management matter for the Principal to consider and any clause must comply with the TMF contract of coverage. Again, if there is any doubt, the advice of the TMF Fund Manager should be sought. Clause 14.3, which provides for the Consultant’s liability under the indemnity in Clause 14.2 to be apportioned where the indemnified party contributed to the loss, may be omitted where appropriate. Note however, that notwithstanding the omission of Clause 14.3 from the Consultancy Agreement, the Courts may nevertheless in appropriate circumstances apportion liability. Guide Note 14 The appropriate level of insurance and duration should be assessed with reference to the Treasury Managed Fund (“TMF”) contract of coverage, the size/risk of the contract and the Consultant’s ability to obtain the required levels and types of insurance. If there is any doubt, the advice of the TMF Fund Manager should be sought by the Principal. It should be noted that TMF currently advises a minimum limit of $20,000,000 for broad form public liability insurance and $5,000,000 for professional liability insurance. Maintenance of public liability and professional liability insurance for a period of 12 months post termination or expiry of the Consultancy Agreement is not unusual.

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Where the Consultant is a ‘consortium’ of different legal entities, special insurance arrangements may be required. Guide Note 15 By inserting an email address, a party agrees that notices may be served on that party by email. Delete the reference(s) to the email, if appropriate.

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Premier’s Department New South Wales Guidelines for the Engagement and Use of Consultants Version 4

Attachment

CONSULTANCY AGREEMENT Issued March 2005

The Crown Solicitor’s Office has amended and updated a Consultancy Agreement which had previously been used by the Premier’s Department and a number of agencies as a precedent. This updated document may assist agencies in preparing their own agreements. It is strongly recommended that any agency intending to use this Agreement seek legal counsel in formalising and finalising the final Agreement. The updated document takes into consideration recent changes in the law dealing with privacy, disclosure of personal information and moral rights. Matters such as liability caps, levels of insurance, questions of indemnity and intellectual property rights are just a few issues that need consideration in relation to specific clauses. The Agreement also contains clauses regarding dispute resolution reflective of the Government’s policy in this regard. This is another issue that may or may not be appropriate depending on the particular consultancy. The Crown Solicitors Office has prepared Guide Notes to assist the use of the updated Consultancy Agreement. Please read through these Guide Notes before using the updated Consultancy Agreement as a base. The Consultancy Agreement can be downloaded from http://www.dpc.nsw.gov.au/__data/assets/word_doc/0007/1015/Consultancy_Agreement_March_2005.doc

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http://www.dpc.nsw.gov.au/__data/assets/word_doc/0007/1015/Consultancy_Agreement_March_2005.doc�


APPENDIX 4

LEGISLATION AND POLICIES TO BE OBSERVED BY CONSULTANTS Consultants are to comply with relevant Government policies. This includes legislation, policy or any other form of requirement relevant to the matter at hand which by its nature should apply to advisers to the agency as well as to agency personnel. Where appropriate, the relevant requirement should be highlighted in the project brief provided to the consultant. Examples of documents which can be relevant are shown below. Documents Relevant In All Cases • Code of Conduct of the Agency. For instance, honest and ethical behaviour is always required. Conflicts of interest are to be declared and avoided. Documents Relevant to the Services the Agency Provides • Guarantee of Service of the agency. • Policy concerning Guarantees of Service and Quality Customer Service. • Statement of intent to implement the Charter of Principles for Culturally Diverse Society. For instance, services are to be designed and delivered in ways that meet equity objectives and are fully response to diverse needs. Documents Relevant to Personnel Matters • Part 9A of the Anti Discrimination Amendment Act. • Equal Employment Opportunity Policy of the agency. • Equal Employment Opportunity Plan of the agency. For example, in merit selection is tests are used for position, the tests must be relevant to the particular job. They must have been evaluated to ensure gender-neutrality and cultural appropriateness. Adjustments must be provided for persons with a disability to sit the test or to be assessed by another suitable method, for example, by practical placement. Documents Relevant to Procurement, Disposal and Contracting • NSW Government Procurement Policy, including Code of Practice for Procurement. • Purchasing and Supply Manual • Capital Project Procurement Manual. • Contracting and Market Testing Policy. • Public Disclosure of Information Arising from NSW Government Tenders & Contracts,

Premier’s Memo No 2007-01. For instance, there are a number of rules, expectations and principles which are to be observed when undertaking procurement and disposal and when considering contracting out.

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APPENDIX 5A

CHECKLIST 1 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement for CONSULTANTS

Steps to take

Instructions: Initial and Date each step as it is completed. When the Procurement is finished, send the fully completed document to the Procurement Advisory Service(PAS), Email: [email protected].

Quote/Procurement Ref No.

Official File Number Title Of Procurement Branch/Unit Project Manager Email Address Contact Phone No. Date of Awarding of Contract

Successful Supplier/s awarded Contract

Step CHECKLIST Procurement of Consultants

Steps to take Signature Initials

Date

Tre

asu

ry S

tep

s 1

- 4

Initial Concept - New Procurement Project – Consultancy only - however if NOT Consultancy, go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/htm for appropriate checklist. For IT related product or service, go to Commercial Manager, SIM Appoint Officer as Project Manager and estimate cost of the project.



Read and understand Section 3 (Tendering) of the Supply Procedures Manual. Seek a Procurement Reference Number (PRN) from PAS or Commercial Manager SIM, (for the Department) and record on Official File.


Identify the contribution the proposed project will make to the Government's and NSW Health's objectives.




Is this project available through any existing contract? – Check with i) State Government Contracts at Commerce website, (this is not a link) http://www.nswbuy.com.au/Consultants.aspx (this is not a link) or telephone 1800 679 289.ii) SIM, iii) SP&BD.

All NSW Health Projects over $1MILLION (as a discrete project) must assess risk through the Department of Commerce Risk Assessment Tool titled Procurement Profile Tool at (this is not a

link) http://www.dpws.nsw.gov.au/Government+Procurement/Gateway+Review+Process/Project+Profile+Assessment+Tool.htm

5

Decide on the Tender Process - Submit a recommendation to the Steering Committee If project is available through existing contract, the process will not

If project is not available through existing contract, the process, go to open market. Check for reports on previous projects or

firms that may have worked with NSW Health –Check with PAS. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

will go to open market. Government mandates (GST inclusive):Less than $30,000 -one written proposal required, $30,000 - $150,000-three written proposals required, Over $150,000 Open Tender required, Over $1Million Risk Management Assessment through Gateway Process required. Strategic Procurement & Business Development Branch to assist.

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http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/htm�


CHECKLIST 1 NSW HEALTH - TO BE COMPLETED BY PROJECT MANAGER Procurement for CONSULTANTS

Steps to take Step CHECKLIST Procurement of Consultants

Steps to take Signature Initials

Date

6 Complete Tender/EOI documentation including evaluation criteria.


Lodge the controlled document Tender Evaluation Criteria with PAS for security.


7 Advertise EOI or Tender externally through Communications Unit OR


8

Bids Received by Tender Box (hard copy) & /or electronically via website. Tender Opening Committee completes procedure.

If multistage process , review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR

Single stage process: Review bids/tenders for reasonableness/ consistency & against selection

criteria.

Document the Recommendation. Document the Recommendation Issue next document and invite minimum of three

short-listed bidders to tender.



Check for potential superannuation & withholding tax liability





9 Inform PAS of outcome to comply with public disclosure directive.




TOTAL Price Paid:


Delegated Supervising Officer Name: Title: Signature:_______________________________________ Date:


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APPENDIX 5B

CHECKLIST 2 HEALTH SERVICES - TO BE COMPLETED BY PROJECT MANAGER PROCURING CONSULTANTS - Steps to take

Instructions: Sign and Date each step as it is completed. When the Procurement is finished, send the fully completed Document to The Director of Procurement and Contract Services (address below).

Title Of Procurement:_____________________________________________________________ Branch/Unit:______________________________ Official File Number:_____________________ Project Manager:________________________________________________________________ Title:__________________________________Email___________________________________ Contact Phone Number:_______________ Date of Awarding of Contract:____________________ Successful Supplier/s awarded Contract:______________________________________________

Step CHECKLIST of Consultants Steps to take

Signature Initials

Date

Tre

asu

ry S

tep

s 1

- 4

Initial Concept - New Procurement Project – Consultancy only - however if NOT Consultancy, go to http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/htm for appropriate checklist. For IT related product or service, go to Commercial Manager, SIM Appoint Officer as Project Manager and estimate cost of the project.

i)


Initiate Completion of Checklist to send to Asset and Contract Services.

Read and understand Section 3 (Tendering) of the of the Supply Procedures Manual. Seek a Quote/Tender Number from Contracts Officer and record on Official File and record on Official File.


Identify the contribution the proposed project will make to the Government's and NSW Health's objectives.


Establish Supervising Manager responsible for delegation of funds – Establish Steering Committee (as appropriate). Include A&CS member on Steering Committee as Probity and Process Advisor.


Is this project available through any existing contract? – Check with I) State Government Contracts at Commerce website, (this is not a link) http://www.supply.dpws.nsw.gov.au/Contract+Information+and+User+Guides/Contract+Information+and+User+Guides.htm (this is not a link) or telephone 02 9372 7791. ii) SIM, iii) AC&S


5

Decide on the Tender Process - Submit a recommendation to the Steering Committee If project is available through existing contract, the process will not go to open market. Check for reports on previous projects or firms that may have worked with NSW Health –Check TCNG Database. NOTE: NSW Health Guidelines advise obtaining a minimum of three written quotes as Best Practice. Where fewer than three quotations are invited, the reasons should be documented and retained on file.

project is not available through existing contract, the process, will go to open market. Government mandates (GST inclusive):Less than $30,000 -one written proposal required, $30,000 - $150,000-three written proposals required, Over $150,000 Open Tender required, Over $1Million Risk Management Assessment through Gateway Process required. Asset and Contract Services Branch to assist.

6 Complete Tender/EOI documentation including evaluation criteria.


Lodge the controlled document Tender Evaluation Criteria with appropriate body for security.


7 Advertise EOI or Tender externally OR OR

If using existing SCCB contract, following best practice for NSW Health, invite minimum of three approved Suppliers to quote. If three are not invited, document the reason and file. If using TCNG Contract, must use successful supplier.

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Quote/Tender Number

http://internal.health.nsw.gov.au/operations/apmd/pmb/procurement/checklist/htm�

http://www.supply.dpws.nsw.gov.au/Contract+Information+and+User+Guides/Contract+Information+and+User+Guides.htm�

http://www.supply.dpws.nsw.gov.au/Contract+Information+and+User+Guides/Contract+Information+and+User+Guides.htm�


Step CHECKLIST of Consultants

Steps to take Signature INITIALS

Date

8

Bids Received by Tender Box(hard copy) & /or electronically via website . Tender Opening Committee completes procedure.

If multistage process, review EOI’s for reasonableness/ consistency with the market and against selection criteria. Short-list chosen bidders. OR

OR

Single stage process: Review bids/tenders for reasonableness/ consistency & against selection

criteria.

Document the Recommendation. Document the Recommendation Issue next document and invite minimum of three short-listed bidders to tender.



Check for potential superannuation & withholding tax liability





9 Complete the award section of the eTendering admin console to comply with public disclosure directive.




TOTAL Price Paid:

Statement of Compliance: This procurement was completed in accordance with NSW Health’s Procurement Policy Directions and all the steps listed above. Project Manager: Name:________________________________________ Title:_________________________________________

Signature:_____________________________________ Date:

Delegated Supervising Officer Name:__________________________________________ Title:___________________________________________ Signature:_______________________________________ Date:

WHAT TO DO WITH THIS COMPLETED SIGNED FORM: 1) Place the original in the official file. 2) Fax copy to: The Director, Procurement and Contract Services, Asset and Contract Services Branch. Fax 02 9391 9522

Procurement Checklists available include: For NSW Health Checklist 1 for Procurement of Consultants Checklist 3 for Procurement $30,000 - $150,000 Checklist 5 for Procurement $150,000-$10Million Checklist 7 for Procurement over $10Million Checklist 9 Engaging Consultant/Contractor under $30,000

For Health Services Checklist 2 for Procurement of Consultants Checklist 4 for Procurement $30,000 - $150,000 Checklist 6 for Procurement $150,000-$10Million

Checklist 8 for Procurement over $10Million

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APPENDIX 6

Sample Disclosure Consultants equal to or more than $30,000

Consultant $ Cost Title/Nature Finance and accounting/tax ABC Partners $X Advice regarding assessment

of risk management strategies 123 Ltd $X Review of Finance function Sub-total $X Information Technology IT Solutions $X Development of

specifications for the Finance Module of Financial Information System

Computer Specs P/L $X Advice on development of IT strategic plan

Sub-total $X Legal Miscellaneous Law Firm $X Advice on legal issues arising

from the XYZ agreement Sub-total $X Total consultancies equal to or more than $30,000

$X

Consultancies less than $30,000

During the year X other consultancies were engaged in the following areas:

Finance and accounting/tax $X Legal $X Total consultancies less than $30,000 $X Total consultancies $X

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PREQUALIFICATION SCHEME FOR ENGAGEMENT OF CONSULTANTS – PERFORMANCE AND MANAGEMENT SERVICES (IB2009_022) This Information Bulletin applies to NSW Department of Health, Area Health Services, Public Health Units, Ambulance Service of NSW, Affiliated Health Organisations and Public Health System Support Division. Premier’s Circular No. 2008 – 34, http://www.dpc.nsw.gov.au/publications/memos_and_circulars/circulars/2008/c2008-34_prequalification_scheme_performance_and_management_services advises that a panel of pre-qualified consultants has been established by the Department of Premier and Cabinet in conjunction with the Department of Commerce under the heading “Prequalification Scheme: Performance and Management Services”. The Scheme maintains a panel of pre-qualified consultants who provide services in the following areas of expertise: Performance Reviews Infrastructure and Major Projects Service Delivery Improvement Organisational Capability General Technical Expertise Usage NSW Health is not obliged to use the Scheme. Where it is decided not to use the prequalified panel for consultancy work, the existing process for engagement of consultants applies. As set out below however, the scheme introduces more flexibility to source prequalified consultants by direct engagement. Competition Policy The current procurement policy of NSW Government and NSW Health requires a minimum level of competition based on the estimated cost of the consultancy – one written proposal for work less than $30,000, three written quotations for work between $30,000 and $150,000, and open invitation for work over $150,000. For the Scheme however, the State Contracts Control Board has approved a less stringent delegation, applying the following minimum levels of competition: 1. Where the estimated cost of a project is less than or equal to $150,000, an engagement can be

made directly from the panel by inviting one (1) written quotation from a service provider prequalified under the Scheme.

2. Where the estimated cost of a project is more than $150,000 (there is no upper limit) an

engagement can be made from the panel by inviting a minimum of three (3) service providers, prequalified under the Scheme, to submit proposals. Open invitations to tender are not required.

The Scheme also provides for easier flow-on of related work without further competition up to the lesser of three times the original contract value or $500,000.

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http://www.dpc.nsw.gov.au/publications/memos_and_circulars/circulars/2008/c2008-34_prequalification_scheme_performance_and_management_services�

http://www.dpc.nsw.gov.au/publications/memos_and_circulars/circulars/2008/c2008-34_prequalification_scheme_performance_and_management_services�


The Scheme does not cover areas of procurement already addressed by other prequalification schemes or panel contracts, including: State Contracts Control Board (period) contracts Construction-related consultant prequalification schemes Information and Communication Technology (ICT) Capital Investment Process - Consultant

Prequalification Scheme How to use the Scheme Initially a request for a list of prequalified service providers is to be made to the Department of Commerce citing the work types and specialties required for a particular engagement. A request form which has been designed for this purpose and allows the Department of Commerce to actively monitor panel usage can be downloaded from the Department of Commerce website http://www.nswbuy.com.au/Consultants.aspx The Request Form is to be submitted by e-mail to: [email protected] or by fax to (02) 9372 8077. A list of suitably qualified service providers will be returned by e-mail to the requesting agency. The Department of Commerce will only send a list to ‘nsw.gov.au’ email addresses. Staff may then make their own assessment from the list of pre-qualified service providers as to which will provide best value for money or may seek further assistance from the Department of Commerce. Engagement Contract NSW Health and the service provider must enter into a separate agreement for each engagement. A Standard Form of Agreement has been developed for this purpose and must be used whenever engaging consultants off the panel. The terms of the Standard Form of Agreement should not be modified unless there are exceptional circumstances which warrant modification. In this case advice is to be sought from Department of Commerce. The Standard Form of Agreement can be downloaded from http://www.nswbuy.com.au/Consultants.aspx There are some differences between and the Standard Form of Agreement and the Department’s existing Consultancy Agreement that staff should be aware of so they can assess whether the Scheme’s Agreement provides sufficient contractual protection or not. In summary these are:

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http://www.nswbuy.com.au/Consultants.aspx�

mailto:[email protected]�



Prequal. Scheme Agreement Existing NSW Health

Consultancy Agreement Public Liability Insurance $10M * $20M GST Assumes all services provided

are subject to GST Reflects that not all health services provided by a consultant may be subject to GST

Termination No provision for termination for convenience

Allows for termination for convenience

Privacy & disclosure of personal information

No reference to particular requirements for protection of health information ^

Contains specific clauses relating to the protection of health information

Publication of material Does not specifically address the publication of material a consultant may develop #

Consent is required before a consultant publishes any material arising from the provision of a service

Policies General reference that incorporates the policies of an agency into the Agreement ^

Specifically incorporates compliance with relevant NSW Health policies

* Clause 4.18(c) allows for additional insurance to be negotiated if necessary. ^ Clause 4.12 states the Consultant must comply with laws, policies, codes etc that are communicated by the Principal. It is recommended that all policies, privacy requirements, codes of conduct etc that are relevant to the engagement are included in a Schedule where a description of the Services is detailed. # Clause 9.5 describes general limitations on the use of contract material however this may not be sufficient for particular consultancies.

Existing policies regarding the use of Departmental standard conditions of contract and obtaining the requisite number of quotations remain in force when engaging consultants by means other than off the panel. Data collection An important aspect of the Scheme is performance monitoring and reporting. A Performance Report is required for all engagements (including the value of any flow-on engagements) in excess of $150,000 and any engagements where the service provider’s performance has been considered unsatisfactory. The Performance Report can be downloaded from http://www.nswbuy.com.au/Consultants.aspx Further Details Additional information and documents related to the Scheme are available at the Department of Commerce web site http://www.nswbuy.com.au/Consultants.aspx. The Purchasing & Supply and Supply Manuals will be updated with the content of this Information Bulletin. Any inquiries concerning this Information Bulletin may be directed to the Procurement Advisory Service [email protected] or telephone (02) 9391 9215.

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mailto:[email protected]�

CHAPTER 5 – TRAVEL 5.1 TRAVEL - OFFICIAL (PD2009_016) 1. INTRODUCTION............................................................................................................... 3 1.1 Purpose and Scope ..................................................................................................... 3 1.2 Rescinds and Replaces .............................................................................................. 3 1.3 Eligibility..................................................................................................................... 3 2. DEFINITIONS.......................................................................................................... 3 3. MINISIMING TRAVEL ................................................................................................... 4 4. TRAVELLING BY AIR .................................................................................................... 4 4.1 Class of Air Travel ..................................................................................................... 4 4.2 Booking the Airfare ................................................................................................... 4

4.2.1 Air Travel Bookings .................................................................................... 5 4.3 Loyalty Schemes and Airline Lounge Schemes .................................................... 5 5. OFFICIAL OVERSEAS TRAVEL................................................................................. 6 5.1 Delegation of Approval ............................................................................................. 6 5.2 Official Overseas Travel ........................................................................................... 7

5.2.1 Study Scholarships....................................................................................... 7 5.2.2 Sponsorship................................................................................................... 7 5.2.3 Private/Annual Leave .................................................................................. 7 5.2.4 Private Funding ............................................................................................ 8

5.3 Procedure For Seeking Approval To Travel .......................................................... 8 5.3.1 Application Process if Presenting a Paper at a Conference/Seminar (“Approval in Principle”)............................................................................ 8 5.3.2 Application Process for all Official Overseas Travel (Attachment 2).. 8

5.4 General Fund............................................................................................................... 9 5.4.1 General Fund Notional Budget .................................................................. 9 5.4.2 Annual Notional Budget Allocations ........................................................ 9 5.4.3 Where the Notional Budget Allocation has been Exceeded .................. 10

5.5 Reporting Requirements............................................................................................ 10 5.6 Travel Allowances (Subsistence) – What is covered ............................................ 10 5.7 Allowance Rates......................................................................................................... 11

5.7.1 Determining the Appropriate Daily Rate.................................................. 11 5.7.2 Claims ............................................................................................................ 11 5.7.3 Receipts ......................................................................................................... 11 5.7.4 Taxation Arrangements For Meal And Travelling Allowances ............ 12

5.8 Travel Insurance ......................................................................................................... 12 5.8.1 Official Visits of Staff Members Overseas............................................... 12 5.8.2 Baggage and Personal Effects Coverage .................................................. 13 5.8.3 Personal Accident Exclusions .................................................................... 13 5.8.4 Proof of Medical Insurance ........................................................................ 13

5.9 Emergency Assistance............................................................................................... 13 5.9.1 Corporate Medical Membership ................................................................ 13 5.9.2 Corporate Security Program ....................................................................... 14

5.10 Pre Travel Arrangement ............................................................................................ 14 5.11 Protocol and Other Special Conditions ................................................................... 14 5.12 Health and Security.................................................................................................... 15 5.13 Audit And Reporting Requirements ........................................................................ 15

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CHAPTER 5 – TRAVEL 5.2 6. DOMESTIC TRAVEL....................................................................................................... 15 6.1 Delegation of Approval ............................................................................................. 16 6.2 Class of Travel (All Modes Of Transport) ............................................................. 16 6.3 Means of Travel – Rail, Air or Road and Overnight Accommodation............... 16 6.4 Travelling Time.......................................................................................................... 17 6.5 Reimbursement of Travel Allowances .................................................................... 18 6.6 Travel Allowances - Daily Allowances and Actual Expenses............................. 18

6.6.1 Actual Expenses ........................................................................................... 18 6.6.2 Daily Allowances ......................................................................................... 19

6.7 Living Allowances - Payment of Allowances........................................................ 20 6.7.1 Employer Accommodation (see cl. 6.6.2) ................................................ 20 6.7.2 Non Employer Accommodation (see cl. 6.6.2)........................................ 20 6.7.3 Restrictions of Payment of Allowances .................................................... 21

6.8 Meal Allowances (if not specified by an applicable Award or other industrial instrument) . 22 6.9 Claims for Payment of Allowances ......................................................................... 22

6.9.1 Payment in advance: .................................................................................... 22 6.9.2 Time for submitting claims:........................................................................ 22 6.9.3 Actual Expenses – Production of Receipts............................................... 22

6.10 Adjustment of Allowances........................................................................................ 22 6.10.1 Insufficient Funds ........................................................................................ 22 6.10.2 Reimbursement of Funds ............................................................................ 23

6.11 Part Day Travel Allowance....................................................................................... 23 6.12 Taxation Arrangements for Meal And Travelling Allowances ........................... 23 6.13 Travel Insurance ......................................................................................................... 23 6.14 Emergency Assistance............................................................................................... 24 7. USE OF PRIVATE MOTOR VEHICLES ON OFFICIAL BUSINESS................ 24 7.1 Rates ........................................................................................................................ 24

7.1.1 Official Business Rate ................................................................................. 24 7.1.2 Transport Rate .............................................................................................. 25 7.1.3 Casual Journey Rate .................................................................................... 25 7.1.4 Motor Cycle Allowance .............................................................................. 25

7.2 Limitations on Payment - Deduction From Allowance ........................................ 25 7.2.1 Deductions for Private Use ......................................................................... 25 7.2.2 Point Determined as "Accustomed place of work" ................................. 25 7.2.3 Visits to Accustomed Place of Work......................................................... 26 7.2.4 Residence Determined as Accustomed Place of Work........................... 26 7.2.5 Deduction When Reporting to Accustomed Place of Work .................. 26 7.2.6 Deduction When Not Reporting to Accustomed Place of Work........... 26 7.2.7 Exemption from Deduction ........................................................................ 26

7.3 Insurance Requirements ............................................................................................ 26 7.4 Private Vehicles Damaged on Official Business or Other Approved Travel .... 27

7.4.1 Reimbursement of Insurance Excess (Policy).......................................... 27 7.4.2 Broken Windscreens.................................................................................... 28 7.4.3 Replacement Registration Labels............................................................... 28 7.4.4 Claims for Reimbursement ......................................................................... 28

7.5 Use Of Private Motor Vehicles - Temporary Work Locations (TWL) .............. 28 7.6 Use of Private Motor Vehicles In Connection With Official Air Travel ........... 29

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CHAPTER 5 – TRAVEL 5.3 1. INTRODUCTION 1.1 Purpose and Scope This document is the policy on official travel undertaken by staff members of the NSW Health Service and the NSW Department of Health. It describes the conditions applicable and administrative procedures to be followed when a staff member undertakes official travel both overseas and domestic. The provisions of this policy do not apply to Staff Specialists undertaking Training, Education and Study Leave (TESL) except in respect to point 4.8 Travel Insurance. The procedures to be followed when a Staff Specialist is undertaking TESL are provided for in the Salaried Medical Practitioners Determination and Policy Directive 2005-305 (previously Circular 2003/29). 1.2 Rescinds and Replaces Policy Directive PD2005_619 – Official Travel Policy 1.3 Eligibility Unless otherwise stated, the provisions of this policy apply to all staff members of the NSW Health Service and the Department of Health. Where awards/determinations have specific travel allowance provisions that are more beneficial to the staff member, those awards/determinations are to apply. It also applies to Staff Specialists travelling for reasons other than TESL. It does not cover individuals or staff members of organisations who provide services under contract to a public sector organisation or service. Where necessary, travel provisions in respect of such contract personnel should be set out in the relevant conditions of the contract or determined prior to any travel being undertaken by the contractor and are not to be any more generous than the provisions of this policy. 2. DEFINITIONS Division of the NSW Health Service: consists of staff employed in or in connection with an area health service, a statutory health corporation, or a declared affiliated health organisation; or in connection with the provision of ambulance services; or in connection with public health organisations providing corporate and other health support services to those public health organisations. Department of Health: For the purpose of this document means a staff member employed by the NSW Department of Health, Health Professional Registration Boards and the Institute of Psychiatry. Employer: For the purposes of this document, means any person authorised to exercise the functions of the employer of staff to which this policy applies. NSW Health Service: Consists of those persons who are employed under Chapter 9, Part 1 of the Health Services Act 1997 by the Government of New South Wales in the service of the Crown. NSW Public Health System: includes area health services, statutory health corporations, declared affiliated health organisations in respect of their recognised services, as well as the Ambulance Service of NSW and health support services.

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CHAPTER 5 – TRAVEL 5.4 Official Travel means any travel by a staff member or any other person where a public sector organisation or service responsible to a Minister uses public monies to pay for the travel. TESL refers to Training, Education and Study Leave provisions as provided for in the Salaried Medical Practitioners Determination 1997 for Staff/Senior Staff Specialists (as amended from time to time). 3. MINIMISING TRAVEL Staff members should explore alternative methods of communicating over long distances prior to considering travel. Alternative technology methods include teleconferencing and video conferencing. 4. TRAVELLING BY AIR 4.1 Class of Air Travel Staff members undertaking official travel must fly economy class. However some staff members are entitled to fly premium economy or business class when travelling to Western Australia, Northern Territory and overseas when undertaking official travel. This includes New Zealand and Papua New Guinea. These are: • Chief Executives, Divisions of the NSW Health Service; • Members of the Senior Executive Service or Health Executive Service; • Staff members whose annual salary exceeds a Senior Officer Grade 1, 1st year, (as varied from

time to time); • Chairpersons of statutory bodies and of Government bodies and committees; • staff members accompanying a Minister: if required by the Minister, the staff member may

travel in the same class as the Minister for the sectors where they travel overseas together; and • staff members travelling overseas on duty as a member of a Government sponsored delegation

or similar representative group: the submission to the Director-General/Chief Executive may propose that the staff member travel in the same class as the members who are not NSW staff members for the sectors where they travel overseas together.

• Minister may waive the requirement to fly economy class for medical reasons. If a staff member wishes to travel in a class higher than their salary allows for as specified above, all additional costs are to be borne by the staff member. 4.2 Booking the Airfare Staff Members are required to make all domestic and international travel bookings through the NSW Government’s Travel Management Company, whether it is financed from the General Fund or the Special Purpose and Trust Fund. This company is appointed through a contract known as the Travel Management Company (TMC) – Contract 1008. Carlson Wagonlit Travel (CWT) currently is the company appointed for the provision of all air travel, car hire and accommodation bookings. Further information can be obtained from the Department of Commerce at http://www.nswbuy.com.au/Travel

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CHAPTER 5 – TRAVEL 5.5 CWT is contracted to offer the lowest logical airfare of the day. This is the cheapest fare available that meets the staff member’s logistical needs, taking into consideration times of meetings and possible schedule variations. Staff members should keep variations to bookings to a minimum to avoid excessive additional costs. Staff members cannot specify a desired airline they wish to fly on. They can only nominate their destination and desired date and time of departure when booking air travel. CWT will book a flight in accordance with the staff member’s specified needs, and can search 20 minutes either side of the specified time of departure for the cheapest fare. To reduce cost, restrictive fares will be sought where possible. For example the initial leg of the journey should be a restrictive fare as it is less likely this will be required to change. CWT has in place systems to capture and manage all credits arising from changes to restrictive fares to reduce any possible wastage. These credits are reported on a monthly basis. Excellent rates have been negotiated with various airlines for overseas travel, which can only be accessed through CWT. The cheapest of these negotiated rates is to be used if available. Choice of airline is not permitted unless a cheaper alternative is found. Travel cannot be undertaken with an airline listed as unsafe by the consultancy firm Flight Safe Limited. Where there is no alternative to an airline listed as unsafe, special permission must be sought by the Employer. 4.2.1 Air Travel Bookings All domestic and international travel bookings are to be made with CWT – domestic travel – telephone no. 1300 307 852 or 02 8666 1751; Facsimile no. 02 8905 9631; international travel – telephone no. 1 300 657 378 or 02 8666 1703, Facsimile no 02 8905 9646. A concerted and planned effort is to be made to utilise CWT’s online booking tool for domestic travel as this reduces the cost of the service. On-line bookings can be made at: https://sbt.carlsonwagonlit.com/thetravelersite?nswgov. Staff members should contact their local travel coordinator for travel bookings. Specific arrangements for staff specialists booking airfares in respect of TESL travel are contained in PD2005_305. Department of Health Accounts Branch and Shared Services will monitor and reject arrangements such as airfare/accommodation bookings for Health Service staff members, raising of purchase orders to Health Services, minor payment vouchers to Health Services involving matters which are captured by this policy. 4.3 Loyalty Schemes and Airline Lounge Schemes The Director-General or Chief Executive should decide whether to meet the cost of staff members joining or maintaining membership of airline lounge facilities or similar services. The frequency (ie at least 4 times per month) and duration of official travel by a staff member, and the scheduling of flights and official business commitments, are considerations relevant to such decisions. Staff members may join and maintain membership of such schemes and facilities at their own expense irrespective of the nature and extent of their official travel.

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CHAPTER 5 – TRAVEL 5.6 Staff members undertaking official travel are not to seek or accept frequent flyer points from any airline. No frequent flyer points are to be sought or allocated, and choice of airline, particularly for transport overseas, is not to be influenced by the availability of frequent flyer points. Benefits from airline, car or hotel loyalty schemes or lounge memberships are not to influence travel decisions. 5. OFFICIAL OVERSEAS TRAVEL 5.1 Delegation of Approval Delegation to approve official overseas travel applications is in accordance with the following:

Source of Funding Submit Application To Approval By General Fund

General Fund

Division of the NSW Health Service (excludingthose listed below) - Human Resources/Area Executive NSW Department of Health, Clinical Excellence Commission, HealthQuest and Health Administration Corporation (Health Support Services, Health Infrastructure and Institute of Medical Education and Training)

- Workplace Relations and Management**

Division of the NSW Health Service: Within the notional budget: - Chief Executive If notional budget is exceeded: - Minister NSW Department of Health, CEC, HealthQuest and HAC Within the notional budget - Director-General If notional budget is exceeded: - Minister

Sponsorship

Division of the NSW Health Service (excludingthose listed below) - Area HR/Area Executive NSW Department of Health, Clinical Excellence Commission, HealthQuest and Health Administration Corporation (Health Support Services, Health Infrastructure and Institute of Medical Education and Training)

- Workplace Relations and Management **

Division of the NSW Health Service - Chief Executive NSW Department of Health - Director, Workplace Relations and Management

Special Purpose and Trust Fund

Division of the NSW Health Service - Area HR/Area Executive

Division of the NSW Health Service - Chief Executive

No funds sought, only leavefor Official Travel

Division of the NSW Health Service - HR/ Executive NSW Department of Health - Director-General - Deputy Directors-General - Director, Workplace Relations and Management

Division of the NSW Health Service - Chief Executive NSW Department of Health - Director-General - Deputy Directors-General - Director, Workplace Relations and Management

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CHAPTER 5 – TRAVEL 5.7 **Only requests endorsed by Deputy Directors-General are to be referred to Workplace Relations and Management. Workplace Relations and Management will monitor Department of Health, Clinical Excellence Commission, HealthQuest and Health Administration Corporation (Health Support Services, Health Infrastructure and Institute of Medical Education and Training) expenditure for the Director General to ensure that travel approvals do not lead to over-expenditure of the allocation.

Where expenditure is via a sponsorship, recommending officers should ensure that no conflict of interest exists for the individual, for the Division of the NSW Health Service, or for NSW Department of Health (refer to Staff Delegation A109). 5.2 Official Overseas Travel Official overseas travel is travel out of Australia by staff members when: • the staff member is on duty; • the staff member undertakes some official duty during the course of a private overseas visit; • the staff member is on special leave for any purpose; • the staff member undertakes official duty during absence overseas on leave granted for study

purposes; or • the staff member proceeds overseas for a tour of duty (on exchange or otherwise) with another

government or a body such as the United Nations or one of its agencies. Overseas travel includes travel to New Zealand, Papua New Guinea, Norfolk and Lord Howe Islands and other external Australian territories. The strictest economy is to be exercised on overseas visits. Sound reasons should be provided in support of any application to undertake official overseas travel to establish that a proposed visit is essential and will have significant benefit to the NSW Public Health System/the Department of Health and/or the State of New South Wales. The length of absence and costs must be kept to the minimum practicable. 5.2.1 Study Scholarships Study overseas on scholarship is not considered official overseas travel even though the staff member concerned may be on part or full salary for the period of the scholarship or study leave, or may receive financial support from the Employer during that time. 5.2.2 Sponsorship A staff member who is sponsored (financed) by a person, firm or other organisation to attend or present at conferences or seminars is considered to be on official overseas travel and subject to this policy. 5.2.3 Private/Annual Leave The practice of taking private leave before, during or after official overseas travel is not encouraged. Each application should be considered on its merit and the amount of private leave approved, if any, should be based on the distance travelled and length of the conference/seminar. Approval is at the discretion of the Employer or delegate. Approval to take private leave while undertaking official overseas travel is to be limited to 1-3 days.

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CHAPTER 5 – TRAVEL 5.8 The Employer is not to be put to any additional cost as a result of any private leave undertaken prior, during or following official travel. 5.2.4 Private Funding Staff members seeking approval for official travel shall disclose any funding from a private source at the time of making an application. This requirement also encompasses private funding that may affect any claim on the administration for leave, subsistence or travel costs, whether provided before or after a claim is made. 5.3 Procedure For Seeking Approval To Travel Automatic approval for official overseas travel applications should not be assumed in any circumstance. Therefore staff members should not give an irrevocable commitment in respect to a proposed overseas visit prior to approval. Any costs incurred where approval is not given, or that is above the approved amount, will be the responsibility of the applicant and other person(s) concerned. 5.3.1 Application Process if Presenting a Paper at a Conference/Seminar (“Approval in

Principle”) “Approval in Principle” is to be obtained from the Employer prior to a staff member submitting either a paper or a synopsis for acceptance to conference/seminar organisers. The application form at Attachment 3 is to be completed and submitted to the Employer for approval in principle. The criteria that must be met for approval to present a paper include: • There has been no prior commitment to conference organisers by the individual to present a

paper; • The staff member is presenting a paper of significance on an important Health issue; • The relevant manager certifies the application is a high priority for the Department/NSW public

health system; and • There is a real and demonstrable benefit to NSW Health. If approval in principle is granted, the staff member is then required to complete the general application process for official overseas travel outlined in 5.3.2 below. 5.3.2 Application Process for all Official Overseas Travel (Attachment 2) Applications for official overseas travel must be approved by the Chief Executive of the Division of the NSW Health Service for staff members of the NSW public health system, and the Director-General for staff members of the NSW Department of Health, Clinical Excellence Commission, HealthQuest and HAC entities (refer to section 5.1). For staff members of the NSW Department of Health, applications must go through the Department’s Workplace Relations and Management directorate after endorsement has been given by the relevant Deputy Director-General. Workplace Relations and Management will then process the application for approval by the Director-General.

24(7/09)

CHAPTER 5 – TRAVEL 5.9 All applications will be critically reviewed, and sound reasons in support of the request are to be provided by the applicant. The application form at Attachment 2 is to be completed and signed by the appropriate manager prior to it being submitted to the Employer for approval and must include all documentation requested in the Checklist at Attachment 1. Written approval is to be given prior to any official travel being undertaken. The criteria that must be met for approval include: • There are funds available in the General Fund (see 5.4); • The proposed visit is essential and is of significant benefit for the NSW public health system

and/or the Department of Health; • Sound reasons are given in support of the application and there is a real and demonstrable

benefit to the Employer and the staff member; • Length of absence and costs are kept to the minimum practicable; and • If the staff member is to present a paper at a Conference, they have already been approved in

principle by the Employer. 5.4 General Fund 5.4.1 General Fund Notional Budget Each financial year, a General Fund notional budget is established for official overseas travel undertaken by staff members. Although the relevant Division of the NSW Health Serv ice or the Department of Health pay s for the travel, the expenditure is recorded against the notional General Fund budget. Applications for overseas travel are not to be approved if the notional budget has been exceeded, regardless where there are funds available (see 5.4.3). The Chief Financial Officer, Departm ent of Health is authorised to increase the base am ount of the notional budget each financial year by such amount as considered appropriate. 5.4.2 Annual Notional Budget Allocations Each Division of the NSW Health Service and the Department of Health will have their own annual notional budget allocation. The Chief Financial Officer will advise Divisions of the NSW Health Service and the Department of Health of their annual notional budget allocation for overseas travel in advance. Responsibility for ensuring the notional budget allocation is not exceeded rests with the Division of the NSW Health Service. The Department of Health’s allocation will be divided equally across all divisions. Deputy Directors-General should prioritise requests within their available notional budget to ensure their budget is not exceeded.

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CHAPTER 5 – TRAVEL 5.10 5.4.3 Where the Notional Budget Allocation has been Exceeded Where an overseas travel application will exceed the notional budget allocation, the Division of the NSW Health Service or the relevant Deputy Director-General of the Department of Health must seek approval in writing from the Chief Financial Officer, Department of Health. If approval to exceed the budget is granted the amount overspent will be offset from the travel budget for the following financial year and the Area/Division’s allocation in that year will be reduced accordingly. Conversely, where the allocated budget is under-expended at the end of the financial year the Division of the NSW Health Service may apply for the balance to be added to the allocation for the following financial year. 5.5 Reporting Requirements Please use the form at Attachment 4 as a template. Divisions of the NSW Health Service and the Department of Health are to provide reports on all overseas travel by staff members in their Division every 6 months. The report is to include details of each staff member/s undertaking official travel during the previous 6 months, the date and duration, the purpose of the travel, any associated private leave granted, and the cost and funding source. These reports are to be submitted by e-mail in Excel format (Attachment 4) to the Chief Financial Officer, NSW Department of Health as at 31 December and 30 June each year and are required by 14 January and 14 July. Any additions or changes occurring after the report has been lodged should be reported in the following six-monthly report. Overseas travel is also subject to audit reporting requirements (refer Section 5.13) 5.6 Travel Allowances (Subsistence) – What is covered Staff members are not paid subsistence during travel time. See section 5.7 for the actual rates. The following subsistence is paid to staff members: • A daily allowance rate;

(To cover meals and incidentals, such as expenses to cover personal laundry and dry cleaning, taxi fares (for personal reasons), newspapers and magazines, private telephone calls, gratuities);

• Official incidentals; (To cover official business expenses for taxis, trains, buses, fares or stationery items. An estimated cost of such items should be included with the overseas travel application with reimbursement subject to the production of receipts)

• The cost of reasonable accommodation (Is paid on the basis of actual reasonable expenses incurred, subject to the production of receipts).

The daily allowance rate and official incidentals are payable from the time of arrival at the destination (and any stopovers where meals are not provided) until the time of leaving the destination.

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CHAPTER 5 – TRAVEL 5.11 Due to taxation implications regarding overseas travel allowances, a staff member may elect in writing, to receive payment of the total of the allowances (meals + incidentals) as currently prescribed by Australian Taxation Office Ruling TR 2004/6, if the total of the allowances is less than the total allowance (meals + incidentals) prescribed by this policy. Please refer to the ATO website http://www.ato.gov.au for further information. Written substantiation must be provided in respect to accommodation costs claimed. 5.7 Allowance Rates ECA International sets the overseas allowance rates for this policy. This is done through a subscription service. Due to copyright provisions these rates can only be accessed on the Department of Health Intranet site at: http://internal.health.nsw.gov.au/jobs/travel/index-travel.html 5.7.1 Determining the Appropriate Daily Rate The appropriate allowance rate for an individual staff member undertaking overseas official travel is dependent of their level of remuneration. The Department of Premier and Cabinet sets these levels. To ascertain the appropriate daily rate for your level of remuneration, go to the Department of Health Intranet site at http://internal.health.nsw.gov.au/jobs/travel/travel-rates.html. Alternatively, you can find these levels on the Department of Premier and Cabinet’s website at http://www.dpc.nsw.gov.au/publications/memos_and_circulars. Where a staff member’s itinerary includes free meals, such as meals provided at conferences, seminars, etc., the claim must be adjusted accordingly. For example where dinner is provided, a deduction of the appropriate dinner allowance rate must be made. Staff members should be paid the full daily allowance for the first 35 days they reside in accommodation in the same city to compensate for the higher costs associated with transitory living arrangements and the costs of settling into long term accommodation. When a staff member has resided in accommodation in the same city in excess of 35 days his/her allowance for meals and incidentals will be reduced to 70 per cent. 5.7.2 Claims Claims for travel expenses should be submitted as soon as possible, and no later than one month after the travel has occurred. Claims should be supported by all procurable documents, such as air tickets, boarding passes, receipts and approvals. 5.7.3 Receipts All staff members travelling overseas are required to produce receipts for all expenses that are claimed outside of those items included within the daily allowance, such as accommodation and official fares etc. Only costs reasonably and properly incurred will be considered for payment. Should any staff member consider that they have been disadvantaged by the operation of these allowances, they may claim all-inclusive actual expenditure in respect of the entire period of travel overseas.

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CHAPTER 5 – TRAVEL 5.12 5.7.4 Taxation Arrangements For Meal And Travelling Allowances At the time of issuing this policy, Taxation Ruling 2004/6 prescribes the taxation arrangements for meal and travelling allowances including overtime, meal allowances and subsistence daily rates. Taxation Determination 2008/18 sets the reasonable limits for taxation purposes for the 2008/2009 financial year. For the latest information please refer to the ATO website at http://www.ato.gov.au 5.8 Travel Insurance The Contract of Coverage with the NSW Treasury Managed Fund provides at Section E.5.1.4 for automatic Tourist and Travellers Protection for official visits of staff members (including Staff Specialists undertaking overseas travel for the purposes of TESL in accordance with the Salaried Medical Practitioners Determination as amended from time to time) travelling overseas. The Contract may be found in a booklet entitled "Treasury Managed Fund – Scheme Structure incorporating the TMF Contract of Coverage March 2004" which can be obtained from your Risk Management Co-ordinator. Local regulations in the country being visited should be examined to determine whether local insurance coverage is required. If you have any questions regarding this service please call your Risk Management Co-ordinator in the first instance. Insurance coverage and its exclusion is as summarised below: 5.8.1 Official Visits of Staff Members Overseas Personal Accident and Medical Expenses Cover Tourist and travellers personal acci dent protection autom atically covers staff m embers and approved persons against injury or death by accident while travelling overseas. Cover, in accordance with Section E 5.1.4 of the Contract of Coverage, is provided to approved persons employed by NSW Health against injury or death by accident while travelling overseas in accordance with, and equivalent to the benefits payable under, the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998. In addition, medical expenses of up to $1,000,000 are provided while outside of Australia. The intention of personal accident and medical expenses cover is to protect the approved agency person for the entire period they are overseas whilst on official business i.e. 24 hours, 7 days a week and cover includes medical and dental treatment for accidents and acute episodes of illness (including unexpected acute episodes of pre-existing illnesses) occurring while overseas. Personal accident and m edical expenses cover covers treatment of any immediately necessary nature, which arises while overseas and requires treatment before returning to Australia. Personal accident and medical expenses cover does not cover pre-arranged or elective treatment, or treatment for which there is no immediate medical necessity.

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CHAPTER 5 – TRAVEL 5.13 In apply ing this cover to Staff Specialists unde rtaking overseas travel for the purposes of TESL the Department advises that the Staff Specialist is c overed whilst on official business 24 hours per day . However, should the Staff Specialist take annual or other non-TESL leave while overseas then TMF cover would be suspended for the tim e of that leave and private arrangements should be m ade to obtain any insurance coverage for that period. (It should be noted as per PD2005_305 that the num ber of day s of annual or other leave that can be taken in conjunction with TESL is not to exceed the number of days of TESL being taken). On resumption of official TESL TMF coverage would again apply. 5.8.2 Baggage and Personal Effects Coverage Coverage to the value of $10,000 is provided for baggage and personal effects in accordance with the Treasurers Directions ($10,000 – as of December 1998). Note: Subject to the staff member receiving prior approval by the Director-General or Chief Executive, the cover extends to leisure and recreational periods associated with the conference only while the staff member is overseas (but not private or non-TESL leave). 5.8.3 Personal Accident Exclusions This tourist and travellers personal accident protection shall not apply to any event directly or indirectly attributable to or a consequence of: • Intentional self-injury or suicide (whether felonious or not) or any attempt thereof; • Sexually transmitted diseases that are acquired during approved travel unless the disease was

workplace contracted while undertaking approved activities; • Engaging in professional sport(s). 5.8.4 Proof of Medical Insurance At Attachment 5 is the pro forma "Statement on Medical Insurance Arrangements Applying to Overseas Travel on Official Business". This may be signed by the Director-General or Chief Executive and provided to each staff member travelling overseas. 5.9 Emergency Assistance In addition to the protection provided, the NSW Treasury Managed Fund has an agreement with International SOS Australasia Pty Ltd to provide emergency assistance to staff members of Fund members travelling within Australia (in excess of 160km from place of residence) or overseas on official business. The services provided are detailed below, and can be accessed through a 24-Hour Alarm Centre by contacting SOS Sydney Alarm Centre, SYDNEY, AUSTRALIA, telephone: 61 2 9273 2784, facsimile: 61 2 9372 2455 (call charges may be reversed). The services provided are also detailed on their website http://internationalsos.com 5.9.1 Corporate Medical Membership 1. Emergency and Routine Medical Advice 2. Travel Health Information 3. Medical and Dental Referrals 4. Outpatient Case Management

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CHAPTER 5 – TRAVEL 5.14 5. Medical Evacuation and Repatriation 6. Convalescence Expenses 7. Return Home after Medical Evacuation 8. Outpatient Medical Expense Guarantee and Payment 9. Arrangement for Inpatient Admission and Identify Receiving Physician 10. Inpatient Medical Expense Guarantee, Cost Review and Payment, Medical Monitoring 11. Dispatch of Medication and Medical Supplies 12. Repatriation of Mortal Remains 13. Access to International SOS Clinics 14. Legal Referrals 15. Emergency Message Transmission 16. Translations and Interpreters 17. Lost Document Advice and Assistance 18. Arrange Ground Transportation and Accommodation for Accompanying Family Members 19. Companion Ticket 20. Advance of Emergency Personal Cash 21. Return of Dependant Children

5.9.2 Corporate Security Program

1. Travel Security Information 2. International SOS Crisis Centre 3. Security Evacuation Assistance and Co-ordination 4. Security Surveys and Emergency Response Planning 5. Other Security Services Arrangements have been m ade for membership cards to be provided by the State Governm ent's Contracted Travel Agents at the time that aeroplane tickets are collected. In the event that a card is not received the following membership name and number must be quoted whenever contact is m ade with SOS Assistance. The Employer should include this information in the approval letter provided to the staff member travelling overseas. Membership Name: NSW Treasury Managed Fund Mem bership Number: 12AMMS000001 5.10 Pre Travel Arrangement International SOS can also provide other services relating to pre travel assistance on a fee for service basis. Details of this assistance can be found on their website http://internationalsos.com with the password being the membership number, or obtained direct from International SOS on 61 2 9372 2400. 5.11 Protocol and Other Special Conditions The proper protocol is to be observed at all times in connection with official visits overseas. Requests for assistance to foreign governmental authorities of other countries for assistance (eg. in the arranging of appointments, transport, etc) must be made through established diplomatic channels either to the Diplomatic and Consular Missions in Australia of the countries to be visited, or the Australian missions in those countries. Departure from these procedures could create difficulties or disrupt travel.

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CHAPTER 5 – TRAVEL 5.15 From time to time the Commonwealth Department of Foreign Affairs and Trade (DFAT) supplies the Department of Premier and Cabinet with policy on this subject. Contact: [email protected]. The Office of Protocol and Special Events, Department of Premier and Cabinet can offer further advice and assistance together with any updates on changes made by DFAT. 5.12 Health and Security Proper medical advice should be sought prior to undertaking any overseas travel. Staff members should familiarise themselves with the content of the Travel Health section of the DFAT website called Smart Traveller: http://www.smartraveller.gov.au/tips/travelwell.html Staff members are advised to visit the DFAT Smart Traveller website for travel advice about the countries they are planning to visit: http://www.smartraveller.gov.au/zw-cgi/view/Advice/ 5.13 Audit And Reporting Requirements Occasions of overseas travel needs to be justified and recorded for audit purposes. Records must include the date and duration, the officer travelling, purpose and any associated private leave granted, cost and funding source. The requirement for disclosure of overseas travel in the Annual Report will continue. Reports must be completed in all circumstances where: • the staff member is not a Staff Specialist utilising TESL; • the travel is not covered by Award conditions; • the travel is in excess of $2000 from the Special Purposes and Trust Fund; or • the staff member is seeking approval by the Director-General/Chief Executive and the funding

requested, if any, is from the General Fund. On return from official overseas travel, the staff member is to forward a short report (preferably 2 - 3 pages) on the seminar/conference/meeting etc by e-mail to the Workplace Relations and Management Branch, Department of Health at [email protected] The format to be used for the reporting template will be attached to the staff member’s approval letter. The report will be placed on NSW Health Travel Intranet site. Note: It is ESSENTIAL that reports are provided in electronic form so that they can be easily uploaded onto the NSW Department of Health Intranet site. Staff members should check the reporting requirements in their Division of the NSW Health Service as they may require a more comprehensive report. 6. DOMESTIC TRAVEL The allowances in this section are set by the Department of Premier and Cabinet and apply to NSW Health. The rates as amended from time to time apply from the date they are amended by the Department of Premier and Cabinet. They are prescribed under Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances and Circular Australian and Overseas Travelling Allowances. These allowances can be accessed through the Department of Health Intranet site at http://internal.health.nsw.gov.au/jobs/travel/travel-rates.html.

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CHAPTER 5 – TRAVEL 5.16 Alternatively, the Department of Premier and Cabinet’s website contains all Department of Premier and Cabinet Circulars and is located at http://www.dpc.nsw.gov.au. 6.1 Delegation of Approval The Director-General, Chief Executives of Divisions of the NSW Health Service, statutory office holders reporting directly to the Minister, and Chairpersons of statutory bodies and of Government boards and committees may approve their own official domestic travel. However, the Minister's approval should be obtained for any proposed travel arrangements that might attract public concern and the strictest economy should be exercised. The Director-General must approve travel to Norfolk Island, Lord Howe Island or other external Australian territories. Section 17.3 of the Delegations Manual outlines the delegations for approving all other domestic official travel for staff members of the Department of Health. For staff members of Divisions of the NSW Health Service approvals for domestic official travel must be by the relevant Chief Executive or under formal delegation as outlined in their respective Delegations Manual. All requests by staff members must be approved in writing prior to any official travel being undertaken. A staff member seeking approval for official domestic travel must disclose any funding from a private source for that travel at the time of making the application. This requirement also encompasses all private funding which may affect any claim on the administration for leave, subsistence or travel costs, whether provided before or after a claim is made. Where a staff member undertaking domestic official travel wishes to extend the visit for private purposes, or conversely proposes to extend private travel for official purposes, prior approval is required. This practice should not be encouraged, and in no instance is NSW Health to be put to any additional expense. 6.2 Class of Travel (All Modes Of Transport) Economy class is to be used for all modes of transport for domestic official travel within Australia. Two exceptions to the above apply and are outlined below: • The staff member is accompanying the Minister and if required by the Minister, may travel in

the same Class as the Minister for the sectors which they travel together. • Chief Executives, members of the Senior or Health Executive Service, and staff members with

remuneration on or above a cash salary equal to a Senior Officer Grade 1, 1st year under the Crown Employees (Senior Officers Salaries 2004) Award (as varied from time to time), may use Premium Economy or Business Class for travel to Western Australia and the Northern Territory.

6.3 Means of Travel – Rail, Air or Road and Overnight Accommodation Staff members must complete a Request for Approval to Travel Form (available locally) and have obtained the appropriate approval to travel from the authorised delegate, prior to arranging any travel. It should be noted that all travel request forms are to be signed (for both travel and subsistence costs) by an officer delegated with authority to incur expenditure and certify the availability of funds.

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CHAPTER 5 – TRAVEL 5.17 Rail and air timetables are to be examined closely to ensure that the most economical arrangement is approved. Air travel may be approved in instances where it can be clearly demonstrated that an overall saving would eventuate, that is, in regard to applications for travel the expected relative costs of travel by air and rail should be considered having regard to the: • cost of rail fares; • cost of subsistence allowance; • cost of air fares; • cost of excess travelling time. Air travel may also be approved: • for the forward journey where one day or less is involved in order to avoid overnight travel on

consecutive nights; • for the forward journey where the train arrival time is earlier than 6 a.m. on the outward

journey from Headquarters; • where the urgency of business warrants it; • where there is no significant difference in cost between rail and air travel and the staff member

is required to maintain close liaison with other parties travelling by air; • where it is of advantage to have the staff member available at the start of business on the

following day and rail travel does not allow this; • for the return journey when the return journey commences later than 10 p.m. and/or the train

arrives back at point of departure (near headquarters) earlier than 6 a.m. on a working day and air travel at a more suitable time is available;

• where a rail sleeper accommodation is not available. Use of air travel, including travel by chartered aircraft is to be monitored and wherever practicable, arrangements should be made to coordinate travel by staff member using chartered aircraft so that maximum economies can be achieved. In other cases Government transport services should be used whenever practicable. Rail transit should be used for the transport of material and equipment where the Rail Division of the State Rail Authority can provide a reasonable service. Rail travel is to be based on overnight rail travel with sleeper accommodation. The need to obtain overnight accommodation shall be determined by the Employer having regard to the safety of the staff member travelling on official business and local conditions applicable in the area. Where staff members are required to attend conferences or seminars, which involve evening sessions or staff members are required to make an early start at work in a location away from their normal workplace, overnight accommodation shall be appropriately granted. 6.4 Travelling Time Compensation for travel time should be paid as follows: a) on a non-working day, for all time spent travelling on official business; and b) on a working day, for all additional time spent travelling before or after the staff member's

normal hours of duty. The period for which the compensation is being sought must be 30 minutes or more on any one day.

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CHAPTER 5 – TRAVEL 5.18 A staff member directed to travel on official business outside their usual hours of duty is entitled to apply and be compensated for such time either by payment at single time in accordance with the provisions contained in this section, or, if operationally convenient, by taking equivalent time off in lieu. Time off in lieu should be taken within one month of accrual. Compensation for travelling time will only be granted in respect of the time that might reasonably have been taken by the use of the most practical and economic means of transport. It shall exclude the following: a) time normally taken for the periodic journey from home to headquarters and return (the periodic

journey, both ways, is always deducted unless the staff member is leaving from or returning to headquarters);

b) any periods of excess travel of less than 30 minutes on any one day; c) travel to new headquarters on permanent transfer, if special leave has been granted for the day

or days on which travel is to be undertaken; d) time from 11.00 p.m. on one day to 7.30 a.m. on the following day where the staff member has

travelled overnight and sleeping facilities have been provided for the staff member; e) travel not undertaken by the most practical available route; f) working on board ship where meals and accommodation are provided; and g) any travel undertaken by a staff member whose salary includes an "all incidents of

employment" component. When a staff member is required to wait for transport in order to commence a journey to another location or to return to headquarters and such time is outside the normal hours of duty, such waiting time shall be treated and compensated in the same manner as travelling time. For Department of Health staff members the rate of payment for travel or waiting time on a non-working day shall be the same as that applying to a working day. Those staff members whose salary is in excess of Clerk Grade 5, under the Crown Employees (Public Sector Salaries January 2002) Award, as varied from time to time, are to be paid at the Clerk Grade 5 rate + $1.00. Time off in lieu or payment for excess travelling time or waiting time will not be granted or made for more than eight hours in any period of 24 consecutive hours. 6.5 Reimbursement of Travel Allowances Any authorised official travel and associated expenses, properly and reasonably incurred by a staff member required to perform duty at a location other than their normal headquarters shall be met by the Employer. Staff members must obtain authorisation for all official travel prior to incurring any travel expense. Payment of any actual expenses is subject to the production of receipts, unless the employer is prepared to accept other evidence from the staff member. 6.6 Travel Allowances - Daily Allowances and Actual Expenses 6.6.1 Actual Expenses The following staff members can only claim actual expenses (with receipts) up to the indicative upper allowance rates as set out in Categories A and B of Department and Premier and Cabinet Circular Australian and Overseas Travelling Allowances. (The daily allowance cannot be claimed):

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CHAPTER 5 – TRAVEL 5.19 • Chief Executives, • Members of the Senior or Health Executive Service, and • Staff members receiving a cash salary above a Senior Officer Grade 1, 1st year under the

Crown Employees (Senior Officers Salaries 2004) Award (as varied from time to time) (as at 30 November 2008 this amount was $123,260)

Note: Senior Officers in the Department are entitled to have allowances or actuals. Where the Employer elects to pay for accommodation, staff members shall be paid the allowances for meals and incidentals (see 6.7). Indicative upper limits apply when claiming actual expenses. The indicative upper limits levels are the allowance rates under Columns A and B as prescribed in Department of Premier and Cabinet Circular Australian and Overseas Travelling Allowances. Access to Category Levels A and B can also be found at http://internal.health.nsw.gov.au/jobs/travel/travel-rates.html. 6.6.2 Daily Allowances Senior Officers within the Department of Health and all other staff members on a cash salary below Senior Officer Grade 1, 1st year under the Crown Employees (Senior Officers Salaries 2004) Award (as varied from time to time) (as at 30 November 2008 this was amount was $123,260) are eligible to claim the daily allowance rate as an alternative to claiming actual expenses. Where the Employer elects to pay for accommodation, staff members shall be paid the allowances for meals and incidentals (see 6.7). The daily allowance rates are prescribed in the Department of Premier and Cabinet Circular Australian and Overseas Travelling Allowances under Column C. Access to Category Level C can also be found at http://internal.health.nsw.gov.au/jobs/travel/travel-rates.html. The daily allowance rate provides for the cost of meals, incidental expenses and accommodation outlined in three categories. Items in the category of incidental expenses would include, for example, laundry and dry cleaning, taxi fares (for personal reasons), ne wspapers and m agazines, private telephone calls, gratuities, etc. Where the Employer pays for any accommodation and/or meals as part of the conference fees, staff members are only entitled to claim actuals up to the allowance rate. Where a staff member's itinerary includes "free meals", eg meals provided at conferences, seminars, etc., authorising officers must ensure the claim is adjusted accordingly, e.g. where dinner is provided, a deduction of the dinner allowance must be made (see section 6.8). Only absences of 24 hours' duration involving an overnight stay attract the daily allowance rate. However, payment of the allowance may be made where the staff member satisfies the approving officer that, despite the period being less than 24 hours, expenditure for accommodation and three meals has been incurred. In other cases, where some part day travel at the end of the trip is involved, the amount payable for the part day of travel shall be limited to the actual expenses (excluding morning and afternoon teas) incurred (receipts required) up to the allowance levels set for meals. As a guide, the 6.00am and 6.30pm times set for payment of day only travel allowances are to be used as the basis for the payment of actual expenses where part day travel is involved at the end of the trip.

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CHAPTER 5 – TRAVEL 5.20 Due to taxation implications regarding the daily allowance a staff member may elect in writing, to receive payment of the total of the allowances (accommodation + meals + incidentals) as currently prescribed by Australian Taxation Office Determination TD 2008/18, if the total of the allowances is less than the daily allowance rate. Please refer to the ATO website at http://www.ato.gov.au for more information on Determination 2008/18 and Australian Taxation Ruling 2004/6. Where a staff member elects to claim actual expenses instead of claiming the daily allowance, the claim would consist of all necessary and reasonable expenses actually incurred for meals (excluding morning and afternoon teas) and accommodation, plus the amount per day for incidental expenses (each 24 hours) at all locations specified in Department of Premier and Cabinet Circular Meal, Travelling and Related Allowances. In these circumstances the daily allowance rate is to be treated as an indicative upper limit for travel expenses. 6.7 Living Allowances - Payment of Allowances The following guidelines apply to the payment of domestic travel allowances: The Employer will elect whether to pay the accommodation directly or whether a staff member should pay the accommodation and be reimbursed in accordance with this clause. Where practicable staff members shall obtain prior approval when making their own arrangements for overnight accommodation. 6.7.1 Employer Accommodation (see cl. 6.6.2) Where a staff member performs official duty at or from a temporary work location and is thereby compelled to reside temporarily at a place other than his/her residence, and is provided with accommodation by their Employer or paid for by their Employer, the staff member shall be reimbursed expenses properly and reasonably incurred (for example for meals) during the time actually spent away from his/her residence in order to perform that duty, and shall in addition be paid incidental expenses for each 24 hours as prescribed by Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances. The staff member is entitled to claim the appropriate meal allowances during full 24-hour periods and actual meal expenses properly and reasonably incurred (excluding morning and afternoon teas) for any residual part day travel. Where possible, the overnight accommodation for staff members travelling on official business should be of the middle of the standard range, referred to generally as three star/three diamond accommodation.

6.7.2 Non Employer Accommodation (see cl. 6.6.2) Where a staff member performs official duty at a temporary work location and is thereby compelled to reside temporarily at a place other than his/her residence, and accommodation is not provided by or paid for by the Employer, the staff member shall be paid an allowance for the expenses properly and reasonably incurred during the time actually spent away from the staff member’s residence (from time of leaving to time of return) in order to perform that duty or actual costs up to the allowance rates. Where possible, the overnight accommodation for staff members travelling on official business should be of the middle of the standard range, referred to generally as three star/three diamond accommodation. If claiming Sydney rate, the boundary is determined by Sydney Telephone District as defined by the Telstra’s (02) 8 and (02) 9 boundary.

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CHAPTER 5 – TRAVEL 5.21 Where a staff member proceeds directly to a temporary work location in a capital city and returns direct, the Capital City rate as prescribed in Departm ent of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances applies to the whole absence. Where a staff m ember breaks the journey in centres other than a capital city , the Capital City rate shall apply only in respect of the time spent in the capital city, the High Cost Country Centres, Tier 2 Country Centres and Other Country Centre rate as appropriate, shall apply to the remainder of the absence. Where actual expenses are claimed, staff members can claim for incidental expenses at all locations as prescribed by Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances. Claims must be made on a uniform basis. That is, staff members may not claim daily allowance rates for part of the period of absence, and actual expenses for the other part of the period of absence. An exception is where some part day travel at the end of the trip is involved. In this case, the allowance payable for the part day of travel shall be limited to the actual expenses incurred, up to the respective allowance rates. Staff members are to be paid the applicable daily allowance rate for the first 35 days (commencing from the time of arrival at the staff member’s temporary work location and including any public holiday and any period of return to the staff member’s residence at weekends) they reside in accommodation in the same town/city to compensate for the higher costs associated with transitory living arrangements and the costs of settling into long term accommodation. When a staff member has resided in accommodation, in the same town/city, for over 35 days and up to 6 months their allowance is paid at 50% of the appropriate daily rate, provided that the allowance paid to a staff member temporarily located in Broken Hill shall be increased by one-fifth. 6.7.3 Restrictions of Payment of Allowances Allowances are not payable in respect of: • any period during which the staff member returns to his/her residence at weekends or public

holidays, commencing with the time of arrival at that residence and ending at the time of departure from that residence;

• any period of leave, except with the approval of the Employer, or • any other period during which the staff member is absent from his/her temporary work location

otherwise than on official duty.

Any purchase of alcohol or any private telephone calls from the hotel/motel is considered to be the responsibility of the staff member.

A staff member, who is in receipt of an allowance, may return to the staff member’s residence on any weekend or public holiday and shall be entitled to be paid the actual expenses of travel (for the journey from the temporary work location to the staff member’s residence, and for the return journey from the staff member’s residence to the temporary work location) properly and reasonably incurred (including any allowance for use of private motor vehicle). Unless otherwise determined by the Employer the amount so paid shall not exceed the amount to which the staff member would have been entitled by remaining at his/her temporary work location. A staff member who is in receipt of an allowance, and upon ceasing to perform duty at or from a temporary work location leaves that location, is entitled to an allowance in respect of the necessary period of travel to return to his/her residence or to take up duty at another temporary work location.

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CHAPTER 5 – TRAVEL 5.22 Daily allowances are not to be reduced if one or more meals are taken at health organisation establishments. However, the staff member is to pay for the meal(s). 6.8 Meal Allowances (if not specified by an applicable Award or other industrial instrument) A staff member who is authorised to make a journey on official business and who is not, by reason of that journey, required to reside temporarily at a place other than the staff member’s residence shall be paid the following allowances: • for breakfast when required to commence travel at or before 6.00 a.m. and at least 1 hour

before the prescribed starting time; • for dinner when required to work or travel until or beyond 6.30 p.m.; • for lunch only when the staff member is required to travel a total distance on the day of at least

100 kilometres and, as a result, is located at a distance of at least 50 kilometres from the staff members normal headquarters at the time of taking the normal lunch break.

These allowances are prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances. The allowance is only payable if the staff member incurred an expense. 6.9 Claims for Payment of Allowances 6.9.1 Payment in advance: The Employer may approve applications for advance payments of travelling and sustenance allowances. Such applications should include a detailed estimate of anticipated expenditure and specify whether the Employer is providing or paying for accommodation and/or meals, eg not part of a conference. 6.9.2 Time for submitting claims: Claims should be submitted promptly, that is, within one month from the completion of work or within such reasonable time as the Employer determines in writing. 6.9.3 Actual Expenses – Production of Receipts Payments of actual expenses shall be subject to the production of receipts, unless the Employer is prepared to accept other evidence from the staff member. 6.10 Adjustment of Allowances 6.10.1 Insufficient Funds Where an allowance under sections 6.7 or 6.8 is insufficient to adequately reimburse the staff member for expenses properly and reasonably incurred, a further allowance, in exceptional circumstances, may be paid so as to reimburse the staff member for the additional expenses incurred, if approved by the delegated officer and receipts are provided. Staff members shall check costs prior to travelling and, if it appears that costs would exceed the allowance rate, prior approval should be obtained.

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CHAPTER 5 – TRAVEL 5.23 6.10.2 Reimbursement of Funds Payment of an allowance is to be refused or the amount of the allowance reduced by the Employer where: a) any expenses in respect of which an allowance is payable were not properly and reasonably

incurred by the staff member in the performance of official duties; or any purported expenses in respect of which an allowance is payable were not properly and reasonably incurred by the staff member in the performance of official duties; or

b) any purported expenses in respect of which an allowance is payable were not in fact incurred by the staff member;

c) the staff member was paid in excess of the amount which would adequately reimburse him/her for expenses properly and reasonably incurred.

6.11 Part Day Travel Allowance Part-day travel allowances received should be shown as assessable income in the staff member’s tax returns. Any claim for work-related expenses incurred for travel that does not involve sleeping away from home is subject to the normal substantiation requirements. Refer to Taxation Ruling 2004/6 for detailed information on the way in which these expenses are to be claimed. 6.12 Taxation Arrangements for Meal And Travelling Allowances Refer to Australian Taxation Office Determination 2008/18 and Taxation Ruling 2004/6 for information on the taxation arrangements for meal and travelling allowances including overtime, meal allowances and subsistence daily rates. D 2008/18 sets the reasonable limits for taxation purposes for the 2008/2009 financial year and TR 2004/6 explains the substantiation exception and the way in which these expenses are able to be claimed. • Award transport payments paid under an industrial instrument that was in force on 29 October

1986; • Laundry expense allowances up to the value of $150.00 per annum; • Overtime meal allowances up to the prescribed amount per meal paid under an industrial

instrument in connection with overtime worked (also prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances);

• Domestic related travel allowances up to the amount the Commissioner for Taxation deems reasonable (Taxation Determination 2008/18). A domestic travel allowance is an allowance paid to cover expenses on accommodation, meals and incidentals to the travel, where an overnight stay away from home is involved.

6.13 Travel Insurance The NSW Treasury Managed Fund automatically covers staff members travelling by air under the provisions of Workcover and no other official insurance coverage is allowed.

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CHAPTER 5 – TRAVEL 5.24 6.14 Emergency Assistance When a staff member is travelling in Australia, and is in excess of 160 kms from the staff member’s residence, emergency assistance protection is provided by NSW Treasury Managed Fund that has an agreement with International SOS Australasia Pty Ltd. See Section 5.9 for more information. 7. USE OF PRIVATE MOTOR VEHICLES ON OFFICIAL BUSINESS The allowances in this section are set by the Department of Premier and Cabinet and apply from the date issued by the Department of Premier and Cabinet and as amended by Department of Premier and Cabinet from time to time. They are prescribed under Circular Meal, Travelling and Related Allowances. These expenses can be accessed through the Department of Health Intranet site at http://internal.health.nsw.gov.au/jobs/travel/travel-rates.html. Alternatively, the Department of Premier and Cabinet website contains all Department of Premier and Cabinet Circulars and is located at http://www.dpc.nsw.gov.au. Please note that where particular awards/determinations have specific motor vehicle allowance provisions, those awards/determinations are to take precedence. 7.1 Rates 7.1.1 Official Business Rate The official business rate is only payable where the st aff member is directed to use their vehicle for official business, and specific prior written approval has been obtained from the Employer for the staff member to use their private m otor vehicle with th e prim ary intention that the vehicle is used for employment purposes. In general, private vehicles are to be approved for use by staff members in the performance of their duties when the following conditions are met: • no official vehicle is available; • no public or other transport is available to permit travel within a reasonable time and at a

reasonable cost; • a staff member is unable to use other transport due to disability; • the use of the staff member's private motor vehicle is essential to, or necessary for the economic

performance of the staff member's duties; and • use of a private vehicle where such vehicle is a requirement of the position. It is considered that under normal circumstances staff members would not qualify for the payment of the "official business" rate, as an official vehicle should be made available where possible to the staff member if that staff member is required to travel daily in the performance of the required duties during working hours. It should be noted that the vehicles approved for use primarily for official business need to have the appropriate insurance policy endorsed to indemnify the Employer against legal responsibilities (please see Insurance Requirements). Rates per kilometre according to engine capacity are prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances.

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CHAPTER 5 – TRAVEL 5.25 7.1.2 Transport Rate This rate only applies to staff members employed in the NSW Public Health System, excluding the Ambulance Service of NSW. This rate is to be paid in accordance with the provisions contained in public hospital awards. The transport rate is usually relevant when a staff member is not normally required to travel on a daily basis as part of his/her work, an official vehicle is not available, and the staff member is agreeable to use his/her own vehicle with the approval of the employer. The most frequent incidents of staff members using their own motor vehicle occur when staff members are recalled to duty, however if an award/determination provides for something different, the award provisions should be followed. The current transport rates per kilometre according to engine capacity are prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances. 7.1.3 Casual Journey Rate This rate applies to staff members of the Department of Health as defined in this policy and the Ambulance Service of NSW. The casual rate is the appropriate rate payable in respect of a motor vehicle maintained by the staff member for private purposes but which the staff member has the prior approval of the Employer for occasional travel on official business or other approved travel, subject to the allowance paid for such travel not exceeding the cost of travel by public or other available transport. The casual journey rates per kilometre according to engine capacity are prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances. 7.1.4 Motor Cycle Allowance The allowance for motor cycles/scooters as prescribed in Department of Premier and Cabinet Circular Review of Meal, Travelling and Related Allowances applies in all circumstances. 7.2 Limitations on Payment - Deduction From Allowance 7.2.1 Deductions for Private Use Where a staff member uses a private vehicle for official business, a deduction from the allowance payable for private vehicle usage is to be made to take into account the distance that would normally be travelled daily by the staff member from home to accustomed place of work and return, and any distance that is travelled in a private capacity. 7.2.2 Point Determined as "Accustomed place of work" Where the accustomed place of work of the staff member is not within the typical work area in which the staff member is required to use the private vehicle on official business, distance to and from a point determined within the typical work area is to be adopted as the distance to and from the accustomed place of work for the purpose of calculating the daily deduction.

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CHAPTER 5 – TRAVEL 5.26 7.2.3 Visits to Accustomed Place of Work Where the above usually applies but the staff member is required to attend the accustomed place of work, the distance for calculating the daily deduction is to be the actual distance to and from the accustomed place of work, or, to and from the point determined in the clause above, whichever is the lesser.

7.2.4 Residence Determined as Accustomed Place of Work A staff member's residence may be designated as their accustomed place of work for the purpose of this allowance provided that such recognition does not result in a further amount of allowance being incurred than would otherwise be the case. 7.2.5 Deduction When Reporting to Accustomed Place of Work Each day that a staff member uses a private motor vehicle on official business and during that day reports to the accustomed place of work, a deduction is to be made from the total distance travelled on the day. The deduction is to equal the distance from the staff member's residence to their accustomed place of work and return. 7.2.6 Deduction When Not Reporting to Accustomed Place of Work Each day that a staff member uses their private motor vehicle on official business and does not report to their accustomed place of work, a deduction is to be made of the distance usually travelled to and from the accustomed place of work and return. 7.2.7 Exemption from Deduction Deductions are not to be applied in respect of days where: • staying away from home overnight is involved, including the day of return from any itinerary; • the staff member uses the vehicle on official business and returns it to home prior to travelling

to their accustomed place of work by other means of transport at their own expense; • the staff member uses the vehicle for official business after their normal working hours; • the monthly claim voucher shows official use of the vehicle has occurred on one day only in

any week. Exemption from deduction under this sub-paragraph being exclusive of and not in addition to days referred to in the points above;

• the purchase by a staff member of a weekly or other periodical rail or bus ticket shall, in proper circumstances, provide grounds for exemption from deductions provided that: (i) at the time of purchasing the periodical ticket the staff member did not envisage the use of

their private motor vehicle on approved official business; (ii) the periodical ticket was in fact purchased; and (iii) in regard to train travellers, no allowance is to be paid in respect of distance between the

staff member’s home and the railway station or other intermediate transport stopping place.

7.3 Insurance Requirements No motor vehicle allowance is to be paid to a staff member who uses a private motor vehicle on official business unless certain insurance requirements are met.

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CHAPTER 5 – TRAVEL 5.27 The requirements are: • the motor vehicle must be covered by a policy as required by the Motor Accidents

Compensation Act 1999; and • the staff member must have in force, at the time the vehicle is being used on official business, a

comprehensive policy of insurance or policy of indemnity, to an amount and in a form approved by the Health Service, providing insurance or indemnity against: (i) liability of the Employer and the staff member to pay for loss or damage to property

arising out of the use of the vehicle by the staff member; and (ii) liability of the Employer to pay for loss or damage to the vehicle.

A written statement by the staff member indicating that the Employer would not be liable to pay for any loss or damage to the staff member’s vehicle, or any other vehicle or property, whilst that staff member is using their private vehicle on official business does not suffice as an indemnity. 7.4 Private Vehicles Damaged on Official Business or Other Approved Travel 7.4.1 Reimbursement of Insurance Excess (Policy) Where a private vehicle is damaged while being used on official business or other approved travel, the Employer is to consider applications from staff members for reimbursement of normal excess insurance charges where prescribed by insurers provided: • the damage is not due to gross negligence by the staff member; and • the charges claimed by the staff member are not the charges prescribed by the insurer as

punitive excess charges. Conditions for Reimbursement Reimbursement may be provided where: • the vehicle had been approved for official business; • the accident or damage to the vehicle was incurred while the vehicle was being used on official

business; • the damage has been repaired and paid for, or a claim made and the excess paid to the insurer or

repairer; and • receipts have been provided to substantiate the claim. Maximum Reimbursement The maximum amount that may be reimbursed is the "normal excess" prescribed by the insurer at the time that the vehicle is damaged. "Punitive" excess charges imposed by an insurer because of a poor driving record or the type of vehicle insured shall not be reimbursed. The additional excess imposed by some insurers on inexperienced drivers (or those under 25) is not considered to be a "punitive" excess and shall be reimbursed. If a claim is not made on the insurer eg, to avoid loss of a no-claim bonus etc., the maximum reimbursement is the prescribed excess that would have been paid had a claim been made, or the actual cost of repair, whichever is the lesser.

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CHAPTER 5 – TRAVEL 5.28 7.4.2 Broken Windscreens Conditions for Reimbursement A staff member shall be reimbursed the costs of repairs to a damaged windscreen or replacement of a broken windscreen where: • the use of a private motor vehicle had been approved for official business; • the damage or breakage was sustained in the course of that official business; • the costs cannot be met under insurance policies due to excess clauses; and • the damage is not the fault of the staff member. Maximum Reimbursement The maximum amount to be reimbursed is the cost of replacing the broken windscreen with one of the same type as that broken, or the amount of the prescribed excess, whichever is the lesser. 7.4.3 Replacement Registration Labels The cost of a replacement registration label is not to be refunded where the windscreen of a private motor vehicle is damaged while on official business. 7.4.4 Claims for Reimbursement Claims for reimbursement under this part should be accompanied by sufficient detail for the Employer to assess the claim. 7.5 Use Of Private Motor Vehicles - Temporary Work Locations (TWL) Where approval is given by the employer for a staff member to proceed to a temporary work location for two days or more, approval may also be given for the staff member to take their private car to the temporary work location. If approval has been given, motor vehicle allowances are to be paid in accordance with the schedules outlined below, as appropriate. Official Business Use Required

SITUATION RATE PAYABLE 1st journey to, and last journey from TWL Official Business

Other journeys between home and TWL Applicable Transport or Casual Rate (see 7.1.2 and 7.1.3)

Official business use at TWL Official Business Official Business Use Not Required

SITUATION RATE PAYABLE

All travel to and from TWL Applicable Transport or Casual Rate (see 7.1.2 and 7.1.3)

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CHAPTER 5 – TRAVEL 5.29 7.6 Use of Private Motor Vehicles In Connection With Official Air Travel Private motor vehicles may be used in travelling to and from airports where the air travel has been approved in connection with official business. The approval applies to air travel from Kingsford Smith Airport, Mascot, from secondary metropolitan airports, eg. Bankstown, and from country airports including Wollongong and Newcastle. The following conditions apply to the use of private vehicles for this purpose: • car allowance is paid at the appropriate specified journey or transport rate for the distance

travelled from/to home or headquarters to the airport and return, no daily deduction to be made; • parking fees incurred at the airport may be reimbursed. The use of valet parking must only be

used in exceptional circumstances, eg where staff member has excessive luggage; • the insurance policies on the staff member's vehicle are to meet the specified requirements; • the normal policy in respect of repair costs arising from damage to the vehicle, which are in

excess of insurance cover, will apply. Where a staff member has been allocated an official vehicle, which he/she normally drives, to and from work, he/she should not, other than under exceptional circumstances, use it for the above purpose. Official vehicles should not be left unattended for long periods in parking areas where they are subject to increased risk of damage or theft, and which would deprive the Employer from allocating the vehicle for use by other staff members.

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CHAPTER 5 – TRAVEL 5.30 ATTACHMENT 1

CHECKLIST

(Incomplete applications will be returned to the staff member for completion) Applications for official overseas travel will NOT be considered for approval without all of the below documentation:

The completed application form at Attachment 2 of this policy (2 pages) which includes: Staff Member Details - name, position, classification etc Role and Benefits - role of staff member, benefit to the organisation and staff member etc Details of Travel

- name of conference/study tour, - location/s, - conference/study tour dates, and any travel between cities - total leave dates including dates of departure and return - number of working days required for travel and official leave - Any proposed private leave (private leave is restricted to 1 – 3 days)

Detail of all Travel Costs

- exchange rates - budget breakdown of all fares, registration, accommodation, subsistence (ECA

international allowance rates must be used for subsistence based on the appropriate remuneration level of the staff member – see section 5.7 of this policy), official incidentals

- details of the officer who prepared the calculation of leave and costs - total cost

Source of Funding

- General Fund, Sponsorship, Special Purpose & Trust Fund (AHS only) and/or Personal

Recommendation for General Fund Expenditure

- This application form checked and certified by an appropriate Manager

The Carlson Wagonlit travel (CWT) lowest logical fare quotation. - Economy Class should be used for all official travel overseas - Business class may only be used by staff members whose annual salary exceeds a

Senior Officer Grade 1, 1st year, or those other classifications mentioned at section 3.1 of this policy

A detailed travel itinerary (see Attachment 3A for example)

Written approval for the official overseas travel from the relevant Deputy Director-General or Area Executive.

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CHAPTER 5 – TRAVEL 5.31 ATTACHMENT 2 APPLICATION FOR OFFICIAL OVERSEAS TRAVEL (PAGE 1 OF 2)

SECTION 1: STAFF MEMBER DETAILS

Title: First Name: Surname:

Classification: Position:

Department Division / Health Service:

SECTION 2: ROLE AND BENEFITS

Role of Staff Member on Official Travel (i.e. attending and/or presenting a paper Conference / Seminar): -

Expected benefit to the organisation and staff member’s career development: -

How will information be disseminated throughout NSW Health?

Details of conferences attended in the last two (2) years (Name of Conference and Date/s): -

Please read the following criteria in relation to calculating associated travel costs for official travel days, subsistence and accommodation before completing travel details and associated expenses on the following page: Official Travel: • Relate only to days on which the staff member would otherwise be on duty. Staff members who otherwise work shift work should be

considered day workers. Official travel does not include weekends or personal leave (however described) taken at the staff member’s request.

• Includes those week days where travel occurs between destinations eg travel between official engagements including travel from one country to any other, and the week day period over which the conference is held. Weekends are not to be counted.

• Subsistence: • Is not payable during travel time, or when the departure is not arranged for the first available return flight, or during periods of personal

leave i.e. any normal working day when the staff member is not attending the conference. • Is not payable when weekends are taken as leisure days between the time of arrival and the conference commencement. • Should be calculated from the time the staff member arrives at the overseas destination to the time of departure of the first available

return flight to Australia (having regard to the above exclusions). Employers will need to consider the time of the return flight to determine if any subsistence is payable on the day of departure.

• Is not paid when the staff member requests to take leisure days (however described) for either week days or weekends at his /her request.

• Is to be calculated based on the exchange rate applicable to the country in which travel occurs. Where a staff member is in transit between countries, the applicable exchange rate should be calculated on a proportionate basis.

• Accommodation: • Is payable for the number of nights for which accommodation is actually required while on official travel, including time spent in

travelling between official engagements and/or pending official travel arrivals or departures and where accommodation is required pending departure for the return flight to Australia.

• Costs area not payable where the staff member is taking personal leave or leave without pay during any period of official travel. 24(7/09)

CHAPTER 5 – TRAVEL 5.32 CONTINUED OFFICIAL OVERSEAS TRAVEL APPLICATION FORM (PAGE 2 OF 2)

SECTION 3: DETAILS OF TRAVEL (eg conference, seminar, study tour, visit etc)

Name of Conference / Seminar:

Location: (City) (Country)

From : Conference/Seminar/Study Tour Dates: To:

From : (Depart NSW) Total Leave Dates

To: (Arrive NSW) No. of working days required for Travel

No. of working days required on official travel

No. of private leave days requested Total No. days

SECTION 4: DETAILS OF ALL TRAVEL COSTS Foreign Currency -Exchange rate (eg. DM 1.19) Date of Exchange Rate: (as rate may vary) Conversion in Australian $

Calculation of expenses must include conversion from foreign currency into Australian dollars for Accommodation, Subsistence and Official Incidental expenses. Please attach formal quotes for fares, registration and accommodation.

Type of Expense Foreign currency used

Exchange Rate

Number of nights/days

Rate per night/day

Equivalent in AUD

Fares (Air, Buses, Trains)

Registration

Accommodation (No. of nights @ cost/night)

Subsistence (No. days @ daily rate)

Official Incidentals/expenses

Other

Calculation of leave and costs prepared by (please print): TOTAL AUD $

SECTION 5: SOURCE OF FUNDING ($) General Fund

Special Purpose & Trust Fund (AHS only)

Sponsorship

Personal

Note: Prepayment does not guarantee approval. Even where associated travel costs are being met by sponsorship, General Funds may not be available to meet up front expenses. SECTION 6: RECOMMENDATION FOR GENERAL FUND EXPENDITURE

Travel costs checked by delegated officer: (Name) (Signature) General Fund Expenditure recommended by authorised officer __________________________________ _____________________ (Name and Position) (Signature)

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CHAPTER 5 – TRAVEL 5.33 ATTACHMENT 3: To be completed by staff members wishing to present a paper APPLICATION FOR APPROVAL IN PRINCIPLE FOR OFFICIAL OVERSEAS TRAVEL

SECTION 1: STAFF MEMBER DETAILS

Title: First Name: Surname:

Classification: Position:

Department/Health Service:

SECTION 2: DETAILS OF TRAVEL (eg conference, seminar, study tour, visit etc)

Name of Conference / Seminar:

Location: (City) (Country)

Conference / Seminar Dates: From: To:

SECTION 3: ROLE AND BENEFITS (If presenting a paper)

Provide all relevant documentation regarding the conference, and the scope of the intended paper:

Expected benefit to the organisation and staff member’s career development: -

SECTION 4: DETAILS OF ALL LEAVE TO BE TAKEN (in working days) AND ESTIMATED TRAVEL COSTS

Number of Days Required for Travel to, and Attendance at Conference etc. TOTAL

Estimated cost: All Fares eg Air, Buses, Trains, Registration, Accommodation, Subsistence, Official incidentals and other expenses

TOTAL AUD $

Calculation of leave and costs prepared by (please print):

SECTION 5: SOURCE OF FUNDING General Fund Special Purpose & Trust

Fund (AHS only) Sponsorship Personal

$ $ $ $

SECTION 6: RECOMMENDATION FOR GENERAL FUND EXPENDITURE Amount: $ General Fund Expenditure recommended by authorised officer

______________________________ ___________________________ (Name and Position) (Signature)

(Date) _______________

SECTION 7: APPLICATION APPROVED IN PRINCIPLE ____________________________________________________________________................._________________________ Chief Executive/Director-General ................................................................................................. Date

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CHAPTER 5 – TRAVEL 5.34 Attachment 3A Itinerary for Joe Bloggs Day of Week and Date Details Friday 14/9/09 Depart: Sydney 9.35am

Arrive: Los Angeles 6.10 am Depart: Los Angeles 8.30am Arrive: Atlanta 3.51pm

Saturday 15/9/09 Weekend

Sunday 16/9/09 Attending Conference

Monday 17/9/09 Attending Conference Depart: Atlanta 5.25pm Arrive: New Orleans 6.00 pm

Tuesday 18/9/09 Attending meetings with Medical Oncology Units

Wednesday 19/9/09 Annual Leave

Thursday 20/9/09 Depart: New Orleans 12.55pm Arrive: Los Angeles 5.10pm Depart: Los Angeles 10.15pm

Friday 21/9/09 In transit/Air Travel

Saturday 22/9/09 Arrive: Sydney 6.05am

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CHAPTER 5 – TRAVEL 5.35 ATTACHMENT 4 SIX-MONTHLY REPORT - APPROVED OVERSEAS TRAVEL DATE _______/_______/_______ HEALTH SERVICE/DIVISION OF DoH: ...............................................................................

Name and Title of staff

member (s)

Countries

(Include cities)

Dates, Duration and Purpose of travel

(Role of staff member, name of conference etc)

No. of

days on official leave

No. of

days on private leave

Total Cost

Source of Funds

*

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* i.e. General Fund, Special Purpose &Trust Fund, Sponsorship etc

CHAPTER 5 – TRAVEL 5.36 ATTACHMENT 5

TO WHOM IT MAY CONCERN

STATEMENT ON MEDICAL INSURANCE ARRANGEMENTS APPLYING TO OVERSEAS TRAVEL ON OFFICIAL BUSINESS

This is to certify that (name) (designation) (Health Service) is authorised by the Department of Health, New South Wales, Australia, to travel on official business from (date) to (date) inclusive. If delayed, (staff member’s name) official travel schedule will alter accordingly. During this time, the Department of Health through its Managed Funds Insurance arrangement, if any, will meet (staff member’s name) medical expenses. Details of Coverage are as follows: -

Carrier: NSW Treasury Managed Fund Policy No.: MF 050325-1 Expiry Date: 30 June (Annually) Amount: AUD $1,000,000

Inquiries in respect of medical insurance or any other insurance related matter may be referred to: -

The Fund Manager NSW Treasury Managed Fund Managed Funds Division GIO General Limited GPO Box 2601 Sydney NSW 2000 Australia

Telephone 61 2 8121 3687 Facsimile 61 2 8121 0895

Yours faithfully, Director-General/Chief Executive

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TABLE OF CONTENTS

CHAPTER 6 - MOTOR VEHICLES

USE OF MOTOR VEHICLES WITHIN NSW HEALTH ................................................... 1 1. PURPOSE........................................................................................................................ 1 2. SCOPE............................................................................................................................. 1 3. RELATED GUIDELINES/POLICIES/INDUSTRIAL INSTRUMENTS................. 1 4. DEFINITIONS................................................................................................................ 2 5. CHIEF EXECUTIVE (CE) RESPONSIBILITIES ..................................................... 3 6. ARRANGEMENTS FOR USE OF MOTOR VEHICLES ......................................... 3

6.1 Health Executive Service (SES/SES Equivalent, Non-Award Salary Remunerated Employees and DoH Senior Officers).............................................. 3 6.2 Award Employees (NSW Health Service Employees Only).................................. 6 6.3 Official (Pool) Vehicles.......................................................................................... 9

7. GENERAL PROVISIONS............................................................................................. 10 7.1 Fleet Requirements ........................................................................................................ 10 7.2 Security of Vehicles (Garaging and Safety) .................................................................. 11 7.3 Managem ent and Maintenance ...................................................................................... 11 7.4 Pool Vehicles ................................................................................................................. 11 7.5 Accessories .................................................................................................................... 12 7.6 Written Acceptance of Conditions................................................................................. 12 7.7 Tolls, Parking Fees and Parking Space Levies .............................................................. 12 7.8 Health and Safety........................................................................................................... 13 7.9 Traffic Infringements ..................................................................................................... 14 7.10 What do to in Case of Accidents.................................................................................... 14 7.11 Biofuels and Other Alternate Fuels................................................................................ 15 7.12 Removal of V8 Powered Vehicles from Government Contract..................................... 15 FLEET MANAGEMENT ........................................................................................................ 16 MONITORING VEHICLE UTILISATION .......................................................................... 16 FLEET MANAGEMENT INFORMATION SYSTEM ........................................................ 16

Fleet Management Information System Minimal Reporting Capability .......................... 16 Motor Vehicle Records..................................................................................................... 18

RUNNING SHEETS................................................................................................................. 19 ORDERING OF VEHICLES................................................................................................... 20 REPAIRS AND MAINTENANCE OF MOTOR VEHICLES ............................................. 22 DISPOSAL OF MOTOR VEHICLES .................................................................................... 23 MOTOR VEHICLE NUMERICAL PROFILE ..................................................................... 24

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FRINGE BENEFITS TAX – DEPARTMENTAL MOTOR VEHICLES ........................... 55 APPENDIX 1 CRITERIA FOR ASSESSING PURCHASE OF ADDITIONAL OR REPLACEMENT VEHICLES .......................................................... 60 APPENDIX 2 NEW VEHICLE INSPECTION RECORD............................................. 62 APPENDIX 3 MOTOR VEHICLE HISTORY SHEET ................................................. 63 APPENDIX 4 TREASURY CIRCULAR 99/13 – ALLOCATION OF POOL CAR FRINGE BENEFITS........................................................................ 64

MOTOR VEHICLES 6.1

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USE OF MOTOR VEHICLES WITHIN NSW HEALTH (PD2007_029) This Policy Directive rescinds PD2005_403 and PD2006_033. 1. PURPOSE The purpose of this policy is to set down the principles to be observed by NSW Health in relation to the use of NSW Health motor vehicles by employees in line with the commitment by NSW Health to efficient resource management through effective motor vehicle policies and management procedures. Provisions are incorporated in the Department of Health Purchasing & Supply Manual. 2. SCOPE This policy applies to employees of NSW Health, viz all public health organisations, the Public Health Support Division, the Department of Health, and the Ambulance Service of NSW who have access to official motor vehicles for business use, an official motor vehicle on a private/business arrangement, or who have access to an official motor vehicle for private use. 3. RELATED GUIDELINES/POLICIES/INDUSTRIAL INSTRUMENTS Guidelines Premier’s Department Senior Executive Service Guidelines Policies NSW Health Services Salary Packaging Policy and Procedure Manual as amended from time to time. NSW Premier’s Motor Vehicle Policy as amended from time to time. Premier’s Department Circular 99-15 – “SES Motor Vehicles, Novated Leases” Premier’s Department Circular 2000-70 – “SES Motor Vehicles – Revised Deed of Novation” Purchasing & Supply Manual for NSW Health System (public health organisations) Department of Health Supply Manual (Department of Health & Ambulance Service of NSW) Relevant public health organisation or Ambulance Service of NSW motor vehicle policy, if applicable. Industrial Instruments Salaried Senior Medical Practitioners’ Award and Determination. Public Hospital Nurses’ (State) Award. Health Employees Conditions of Employment (State) Award. Public Hospital (Professional and Associated Staff) Conditions of Employment (State) Award. Public Health Service Employees Skilled Trades (State) Award. Health Executive Service Determination Environmental Health Officers Determination Legislation Public Sector Employment and Management Act (2002).

MOTOR VEHICLES 6.2

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4. DEFINITIONS “NSW Health” means public health organisations, the Public Health System Support Division, the Ambulance Service of New South Wales, and the Department of Health. “public health organisation” (PHO) is an area health service, a statutory health corporation, an affiliated health organisation. “Health Executive Service” (HES) is comprised of the NSW Health SES and SES Equivalent employees. “Chief Executive” (CE) is the head of a public health organisation entity established under the Public Health System Support Division or Ambulance Service covered by this policy and for the purpose of this policy, the Director-General in his/her capacity as Department Head. “employee” is a person employed by NSW Health as defined within this policy (including executives, SES and SES Equivalent employees) “contractor” is a person engaged by NSW Health to perform a specified project or service within a certain timeframe, and who has been given access to a NSW Health fleet vehicle in order to carry out the contract work or as part of the contracted service. “Fringe Benefit Tax” (FBT) is the tax levied on benefits obtained by employees in respect of their employment. “garaging” refers to situations where an employee is permitted to take a NSW Health vehicle home to park in his/her garage or carport or on-street. “Goods and Services Tax” (GST) is the broad-based tax (currently 10 percent) on the supply of most goods and services consumed in Australia. “household” means a family group living in the same domestic dwelling. “novated lease” is a 100 percent private use vehicle acquired privately by an executive or employee in a leasing arrangement that is the subject of an approved deed of novation that enables the vehicle to form part of a remuneration packaging arrangement. “NSW Health fleet” is the mixture of motor vehicles, including those packaged for business/private use, that are required to meet the business needs of NSW Health. “NSW Health vehicle” is a vehicle that forms part of the NSW Health fleet, and includes any vehicle owned or leased by NSW Health. It includes those vehicles defined as being in the NSW Health fleet plus those vehicles acquired under the NSW Health leasing facility and packaged on a 100 percent private basis, but excludes vehicles acquired by individuals through a novated lease. “packaged vehicle” is a vehicle that forms part of an employee’s remuneration package (either as part of a total remuneration package, by way of salary sacrifice, or in accordance with award provisions). “parking space levy” is the charge payable under the Parking Service Levy Act 1992 for parking within specified business districts.

MOTOR VEHICLES 6.3

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“personal use” refers to the use of a NSW Health vehicle for a non-business purpose. It generally includes travel to and from the usual workplace, as well as the carriage of non-government passengers and/or non-business passengers. “pool vehicle” is a general business use vehicle that comprises part of a NSW Health fleet which is not allocated for private use. “private/business” refers to a vehicle packaged as part of a remuneration package on a split basis for both private and business use. Such a vehicle forms part of the NSW Health fleet. “running sheets” are sheets used to log details of all trips undertaken by a pool vehicle and all business trips undertaken by a packaged vehicle (either for a 12-week period if the “representative 12 week period” method is selected, or the full year in all other cases as determined by the Chief Executive). 5. CHIEF EXECUTIVE (CE) RESPONSIBILITIES Chief Executives are responsible for ensuring that: This policy is implemented within their NSW Health organisation and observed by employees.

Probity, accountability and transparency of procedures must be accorded the highest priority. Audit and regular review processes should be put in place to ensure compliance.

Adherence to this policy should contribute significant financial and environmental benefits appropriate monitoring and control exists over vehicle fleets and their use, and that a review of fleet size/utilisation occurs on a regular basis to ensure maximum utilisation, minimisation of changeover costs and minimisation of vehicle numbers for the tasks to be undertaken.

That the vehicle fleet is kept to a minimum necessary to meet operational requirements and that

the fleet is managed in accordance with sound energy and environmental principles. Employees using motor vehicles for work related purposes are properly licensed, and to

encourage employees to observe safe driving practices. Employees are made aware of government policies promoting the use of public transport and

encouraging car pooling. All officers allocated vehicles for private or private/business purposes complete a written

acceptance of the conditions for use of vehicles including the proviso that they accept any future variations made to either charges or conditions of use of vehicles as may be issued by the Department of Health from time to time (see section 7.6 “Written acceptance of conditions”).

6. ARRANGEMENTS FOR USE OF MOTOR VEHICLES 6.1 Health Executive Service (SES/SES Equivalent, Non–Award Salary Remunerated

Employees and DoH Senior Officers) Those employees who have been appointed to positions in the Health Executive Service may package a vehicle using one of the following three options:

MOTOR VEHICLES 6.4

22(5/07)

a 100% private use vehicle through the NSW Health fleet in accordance with Senior Executive Service guidelines;

a business/private vehicle in Government contract at the time of purchase in accordance with

the Senior Executive Service Guidelines. There has to be a genuine business need for a vehicle to be allocated under a business/private arrangement. Where this cannot be justified, the HES employee is entitled to package a vehicle on a 100% private usage basis (either through the NSW Health fleet or on a novated lease basis); or

a novated lease vehicle. Some industrial instruments allow NSW Health employees the option

of accessing a motor vehicle for 100% private use under a novated lease arrangement through salary packaging. A vehicle acquired under a novated lease is not part of the NSW Health fleet. Employees should contact the designated salary packaging contact person of the NSW Health organisation to ascertain whether this option is available and to obtain a copy of the Novated Motor Vehicle Leases: Detailed Information for Interested Officers document. Details regarding novated leases are contained in Premiers Circular 99-15 available at: http://www.premiers.nsw.gov.au/pubs_dload_part4/prem_circs_memos/prem_circs/circ99/c99-15.html

Employees considering a novated motor vehicle lease should obtain their own professional advice in relation to taxation, financial and other aspects of such an arrangement. NSW Health staff are not able to provide advice to employees due to legal considerations. Salary packaging of motor vehicles must be calculated using the statutory fraction method (determined by the Australian Taxation Office) for calculating the Fringe Benefit Tax (FBT) liability and using rates (standing charges and running costs) issued annually by Premier’s Department Circular. Vehicles forming part of remuneration packages for the Health Executive Service must be chosen from within the current State Contracts Control Board (SCCB) contract and comply with any local fleet profile or preferred vehicle policy, unless a novated lease option is chosen. A vehicle acquired under a novated lease is not part of the NSW Health fleet. No Health Executive Service employee is to be allocated a vehicle for commuting purposes unless the cost is charged to his/her package. It is the employee’s responsibility to make their own transport arrangements to and/or from duty each day where an election to take a vehicle is not made. When duty requires that a health service executive needs to use a pool vehicle overnight or at weekends, occurrences are to be reported to the NSW Health organisation Audit Committee. Fleet needs of the individual NSW Health organisation and whether there is a genuine business need will determine whether it is appropriate to allocate a vehicle on a business/private basis to each Health Executive. The size, make and model of vehicle is to be determined according to fleet needs and any relevant local policy, e.g. fleet profile. The grade or classification of the Health Executive has no influence on the selection of size, make and model of the vehicle. Subject to funding requirements the fleet may contain the mixture of vehicles appropriate for the purposes of the NSW Health organisation. The packaging option elected by a Health Executive is to apply for the life of a vehicle, e.g. a vehicle acquired for 100% private use is not to be subsequently changed to a business/private election unless there is a sound and evident need for the vehicle to be utilised for official business, e.g. a change of position role/responsibilities. Officers changing election from 100% private use to a business/private split simply to be provided with free parking is not to be condoned. Executive must undertake to package the vehicle for the full term of the election (i.e. a vehicle is leased for two years must be packaged for two years).

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The estimated number of annual kilometres a vehicle is expected to travel is a crucial factor in determining the useful life of the vehicle, and consequently, the cost to a Health Executive’s salary package (in lease charges or equivalents). Monthly lease charges applicable to a vehicle leased for a period of two years would generally be higher than those for a similar vehicle leased for three years. For this reason, the useful life/lease term of a vehicle packaged by a Health Executive is to be determined by the NSW Health organisation Fleet Manager taking into account past usage patterns where applicable. In other words, the useful life of a replacement vehicle for a Health Executive must accurately reflect past usage. Officers nominating longer terms or lower annual kilometres than reflected in past usage patterns is not to be condoned as this practice will result in additional costs to the NSW Health organisation. NSW Health owned or leased vehicles that are the subject of approved remuneration packaging arrangements for private/business use are to form part of the NSW Health fleet during normal business hours. Health Executive officers allocated vehicles for private use are to ensure other persons authorised by them to use the vehicle are properly licensed and display appropriate plates on the vehicle. This means both provisional and learner drivers. For further information regarding motor vehicles, for example, package types available, tax implications, payment, costing, and novated leases please refer to the SES Guidelines at http://www.premiers.nsw.gov.au/our_library/ses/ses_guidelines 6.1.1 Calculation of Charge Rate Where a NSW Health vehicle is packaged on a private/business basis, the employee is to nominate at the start of any 12 month period, the estimated proportion of private/business usage, and an estimated total distance that the vehicle is expected to travel during the ensuing period. The initial cost to the employee’s package, or contribution will be calculated based upon the estimated figures. The costs to the employee’s package, or contribution will then be adjusted at the end of each review year (or more frequently, if appropriate) following reconciliation between estimated and actual usage i.e. total kilometres travelled and actual private kilometres. Any proposed adjustments are to be agreed with the employee. Any overpayments are returned to the officer, after being adjusted for PAYG taxation, and any underpayments are recovered from the officer, ensuring also that the officer’s PAYG tax liability is adjusted accordingly. Where a Health Executive Service employee has packaged a vehicle on a private/business basis, or has been given the private use of a motor vehicle, and does not maintain running sheets, the cost of the employee’s motor vehicle contribution is to be calculated on a 100% private basis. Officers allocated a vehicle under a 100% private or private/business arrangement are required to meet the cost of cleaning the vehicle. 6.1.2 Trip Recording All vehicles must carry a trip record to monitor usage. For reconciliation purposes, drivers must record details of all occasions when the vehicle is used for official purposes.

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6.1.3 Running Sheets 100 % private vehicles. Employees are to submit monthly running sheets detailing start and finish kilometre readings and fuel and oil purchases (dockets to be attached) for each month. Business/Private vehicles. In the case of NSW Health vehicles that are packaged on a private/business basis, running sheets are to be maintained for all business journeys undertaken throughout the entire year. Employees are required to record all business (official) travel together with details of all fuel and oil purchases (dockets to be attached - dockets do not have to be attached if the NSW Health organisation has a system in place to capture all details on the fleet management system and identify any instance of possible inappropriate use). All instances of usage by employees other than the employee to whom the vehicle is allocated are to be recorded. Running sheets are to be submitted within 5 working days of the end of the month. If running sheets are not forthcoming consideration will be given to adjusting the employee’s business/private split to 100 % private. Where employees do not wish to use their vehicles during periods of leave they are to advise the Transport Section that the vehicle is available for use. Novated lease. Running sheets are not required to be submitted. 6.1.4 Access to Vehicle While on Leave 100% private use vehicles are available and costed for the entire year and automatically available during periods of leave. Health Executive Service employees with a business/private benefit will be able to have access to the vehicle on approved leave up to six weeks per annum (subject to NSW Health requirements for these vehicles to be available for business use by other employees in that period) with the approval of the Chief Executive or delegate. As charges for use of vehicles is on a final year reconciliation for total private kilometres travelled basis, officers can utilise the official petrol cards during periods of leave. 6.2 Award Employees (NSW Health Service employees only) 6.2.1 Access to an Official Vehicle for Business/Private Use Award-covered employees of the NSW Health Services who require the use of an official motor vehicle for official purposes during the normal course of their duties may be offered the allocation of a motor vehicle for private use. Private use of a NSW Health vehicle is not permitted unless such use is authorised by the Chief Executive or delegate, or otherwise provided for under an industrial instrument or in this policy. When the offer is made, it must clearly indicate whether the private use extends to: Travel to and from place of work; Other after hours and general weekend running; Travel during periods of leave.

Private use includes the carriage of non-government passengers and/or non-business passengers.

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Private travel, in general, includes travel to and from home, to the normal place of work, but does not include: Kilometres travelled which are associated with emergency on call arrangements, or the security

garaging of the vehicle; or Kilometres travelled that are associated with an employee performing duties in the field, and

the employee proceeding to their home after completing duty in preference to returning to their normal place of work; or

Kilometres travelled when the employee proceeds to duty directly from home on the following day to a location away from their normal place of work.

Fleet needs will determine whether a vehicle will be allocated on a business/private basis. Fleets are not to be expanded to cover allocations under this clause. Vehicles cannot be allocated on a 100% private basis under this arrangement. When an official vehicle is allocated to an award employee for business/private purposes, it is subject to the following restrictions: The car is not to be driven by any person other than the employee or his/her nominee, being

another member of the employee’s household. This nominee must have a current State driver’s licence which can include Learner or

Provisional licensed drivers. Note: Notwithstanding the above, where specific methods of charging for motor vehicle use for particular classifications of employees have been determined by the Health Administration Corporation prior to November 1997, those approved arrangements and methods of charging for the particular classifications of employees will prevail over the charges and methodology specified in this policy. 6.2.2 Contribution Rate (for Private Usage) Award-covered employees of the NSW Health Service permitted private use of a NSW Health vehicle are required to contribute at a rate determined by the Director-General from time to time. Written acceptance of this must be provided by the employee (refer to Section 7.6 of this policy). Rates effective from 1 July 2007 are as follows:

Up to and including 15,000 private kilometres per annum $2,520 p.a. Over 15,000 private kilometres per annum $4,200 p.a.

The rates are currently based on the SES running cost rates for six cylinder motor vehicles as determined by Premier’s Department. The rates are reviewed each year and advised separately by Information Bulletin. Annual registration, insurance, roadside service arrangements, maintenance and running costs including fuel will be paid by NSW Health. Cost for cleaning of vehicles is to be met by the officer and is not to form a charge against the organisation. The formula for assessment of the rate will be 15,000 or 25,000 kms times the applicable running cost rate per kilometre.

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For indicative purposes only, the assessment of the rate on and from 1 July 2007 is 15,000 or 25,000 kms x 16.80 cents = $2,520 or $4,200. At the start of any 12 month period, employees who have been granted approval to have private use of a NSW Health motor vehicle, are to nominate an estimated proportion of private travel, i.e. less than 15,000 kms, or greater than 15,000 kms. Charges are to be levied each pay cycle. If an employee ceases the arrangement no adjustment is to be made to the rate of charge, e.g. employee nominates the over 15000 kms, ceases the arrangement after 3 months after travelling 5000 private kms - this employee would be required to pay 3 months worth of the $4,200 rate. A pro rata calculation as follows is to be applied:

Annual Rate x Number of days used 365.25

Reconciliation is required on an annual basis to establish that the appropriate contribution rate has been paid, i.e. less than, or greater than 15,000km, and if necessary, the employee must pay the additional contribution or receive a refund, as appropriate. Where it is evident during the year that an employee has nominated an inappropriate annual total kilometre level, the employee is to be contacted with a view to amending the contribution rate during the annual period so that the employee does not have to pay or receive a large adjustment at year’s end. Officers are responsible for the payment of any insurance excess if damage occurs whilst the vehicle is being used for private purposes. The payment by the employee to the public health organisation is payment for a taxable supply, and as such 1/11th is payable by the public health organisation as GST. The rates are not to be grossed up as the running cost rate of 16.80 cents per kilometre used to determine these rates is inclusive of GST. The public health organisation can claim input tax credits on actual running costs (i.e. fuel, tyres, servicing and repair costs). 6.2.3 Access to Vehicles During Leave Approval must be given by the Chief Executive, or his/her delegate, for the car to be used by an employee during any leave period over four (4) working days, subject to a limit of six (6) weeks per annum for annual leave or other type of leave. In granting such approval, the Chief Executive, or his/her delegate, must be satisfied the business needs of the NSW Health organisation will be met during the period the motor vehicle is unavailable. Officers are required to pay for all fuel used during periods of leave greater than four (4) days. The organisation is to determine the most appropriate method of ensuring that employees pay for all fuel used during leave, e.g. recoup petrol card expenditure from employee or inform the employee they are not to use the official fuel card during the period of leave. The applicable annual rate is not to be adjusted when the vehicle is returned to the pool during periods of leave. 6.2.4 Running Sheets Running sheets must be kept for all official business journeys undertaken in NSW Health vehicles. All fuel purchases are to be recorded with dockets being attached. Petrol dockets do not have to be attached to running sheets if the NSW Health organisation has a system in place whereby all particulars are captured on the fleet management system and any instances of possible inappropriate use identified. Running sheets are to be submitted monthly with month end odometer readings specified.

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6.3 Official (Pool) Vehicles Employees may garage a vehicle at their homes: (a) when their duties include a requirement to provide a service in an emergency, or (b) when their duties require them to undertake, prior to the next ordinary working day, other

official duties which require the use of a motor vehicle, or (c) when they will proceed to duty directly from their home on the following day, at a location

away from their normal place of work. (d) where NSW Health lacks suitable overnight secure parking. (In these circumstances employees

who reside in close proximity to the NSW Health facility should be allocated the vehicle.) In respect of (b) and (c) above, consideration is to be made as to whether by giving permission will result in reduced vehicle usage or more effective use of the employee’s time on duty. Ad hoc use of vehicles on official business, where overnight garaging is required, is to be approved in writing by the Chief Executive or delegated person. Where on-going approval is required in an individual (e.g. emergency) or group (eg community nurses) circumstance the Chief Executive or delegated person is to approve. A register of such approvals authorising employees to garage NSW Health vehicles at their home on an on-going basis, is to be maintained and reviewed quarterly by the Audit Committee of the NSW Health organisation. Under no circumstances is transport to and from work to be offered as an inducement to, or the continuation of, employment. During out of hours use no person, other than the authorised employee is to use the vehicle and the vehicle cannot be used for private purposes other than the authorised travel to and from the employee’s residence. All travel is to be recorded. Employees who utilise vehicles under these arrangements are not charged, however, where the travel is considered to be private, e.g. home to headquarters, under the provisions of the Fringe Benefits Act 1986 the travel is a reportable fringe benefit, viz. agencies are required to report the grossed-up taxable value of reportable fringe benefits on the group certificate of each employee whose aggregate taxable value exceeds $1,000 over the FBT year (known as a reportable fringe benefit). This amount is not included in the employee’s assessable income, however it may be included in a number of income tests relating to Commonwealth government benefits eg family allowances, superannuation, Medicare levy. Employees should contact the Australian Taxation Office (ATO) for further information regarding specific benefits which may be affected by reportable fringe benefits. Employees should be made aware of any FBT liability that they may incur through the use of official (pool) vehicles. 6.3.2 Contractors – Access to Pool Vehicles Contractors are not employees of NSW Health, and generally speaking, are not entitled to the same access to NSW Health facilities and resources, including motor vehicles. Only in those circumstances where a NSW Health vehicle is required to carry out the contracted work or as part of the contracted service, may approval be given to a contractor to use an official pool vehicle. Under no circumstances are contractors permitted to use an official vehicle for private purposes.

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6.3.3 Return of Vehicle During Leave Pool vehicles are to be returned to the fleet for any periods of planned leave. In instances of unplanned leave e.g. sick leave, or where the period of planned leave is short, e.g. one (1) day, management may consider that return of the vehicle is not warranted. In these instances the employee is to contact their supervisor to determine whether arrangements are to be made to return the vehicle. 6.3.4 Running Sheets Full details of all travel and fuel purchases (dockets attached) are to be recorded. Running sheets are to be submitted monthly. Petrol dockets do not have to be attached to running sheets if the NSW Health organisation has a system in place to capture all particulars on its fleet management system and identify any instances of possible inappropriate acquisition of petrol etc. 6.3.5 Department of Health Central Administration - Pool Vehicles Employees requiring a vehicle for business use are required to prepare a Request for Motor Vehicle form, which must be approved by an officer of Clerk Grade 9/10 level or above and be submitted to the Transport Officer. Employees are not to approve their own request forms. Request for Motor Vehicle forms are available at the following site (DoH only): http://internal.health.nsw.gov.au/ecsd/ssc/forms/motoreq.pdf The size of the pool vehicle fleet will not generally be large enough to meet peak periods of demand, therefore employees should consider alternative methods of transport and car pooling options prior to requesting a pool vehicle. 7. GENERAL PROVISIONS 7.1 Fleet Requirements Each NSW Health organisation is responsible for the composition of its motor vehicle fleet. Each fleet shall consist of the most efficient and effective vehicles in Government contract necessary for NSW Health to fulfil its purpose. Also refer to Section 7.12 Removal of V8 Powered Vehicles from Government Contract. Chief Executives must ensure that vehicles packaged on a private/business basis, and those vehicles approved for allocation to employees for private use at no direct charge to the employee e.g. emergency on call are integrated as part of the organisation’s fleet, and meet a genuine business need. Careful consideration of this requirement should precede any decision to acquire four-wheel drive vehicles. NSW Health has the right to require any NSW Health vehicle to be available for use by other staff for official purposes. Vehicles are to be available for use by other employees of NSW Health on a daily basis. This availability takes precedence over private use. These vehicles are to be parked at the official premises each day unless the officer is on approved leave. Decisions in relation to fleet needs, access to a vehicle for private purposes, and vehicle type are the responsibility of the Chief Executive, or his/her delegate. Decisions made should be fully documented, and retained on an appropriate file for review by internal audit.

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7.2 Security of Vehicles – (Garaging and Safety) The following applies to NSW Health vehicles being utilised for business purposes (pool cars and business/private mix): During official use vehicles shall be parked at a location convenient to the needs of NSW

Health. When taking vehicles home, employees are to provide secure parking. In general, street

parking or public parking areas are not considered as secure locations to leave vehicles overnight or on weekends.

7.3 Management and Maintenance Identification stickers are to be affixed to all vehicles except where those vehicles are under a 100% private arrangement, on a private /business basis or where the Chief Executive (or delegate) determines otherwise due to unusual circumstances. The Government Fuel and Associated Products Contract (no.366) covers fuel card supply from specified service stations directly to vehicle, bulk and packaged fuel (drums). NSW Health is required to use this contract. If NSW Health organisations have petrol tanks themselves, a system is to be instituted so that a full record of petrol usage is input into the fleet management system. An employee holding a position for which a car is provided has a responsibility, in association with the NSW Health organisation Fleet Manager, to ensure the vehicle is properly maintained. Vehicle maintenance should be undertaken according to the manufacturer’s recommendations to help ensure optimum fuel efficiency, emission performance and return on investment. The fleet manager shall report to the Chief Executive cases where vehicles are returned at the end of use or at the end of the lease period in an unsatisfactory or unclean state. Employees are responsible for: Ensuring that the vehicle is regularly serviced and maintained. Service and maintenance should

be arranged through the fleet manager. Making arrangements for proper garaging of the vehicle or other suitable protection.

The vehicle being kept clean and tidy (inside and outside).

Immediately reporting to the responsible officer of the NSW Health organisation any damage,

including minor damage, to ensure repairs are effected at the earliest opportunity. Employees are required to optimise fuel efficiency and emission performance by ensuring tyres are maintained at recommended pressures, wheels are correctly aligned, fuel tanks are not over-filled, vehicles are not used to carry unnecessary loads, and that good/safe driving habits are observed. All vehicles are to be returned with at least 30% fuel remaining. 7.4 Pool Vehicles Fleet Managers will arrange cleaning of pool vehicles when required. Pool vehicle cleaning costs may be charged to fuel cards with those outlets with vehicle washing facilities. Employees are responsible for returning pool vehicles in a reasonably clean condition, e.g. remove all rubbish etc.

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7.5 Accessories 7.5.1 Accessories Not Charged to Employee Accessories on vehicles are to be limited to those necessary for the safety of the vehicles and/or the reasonable comfort of the occupants with due regard being had to the particular conditions under which the vehicles operate. Purchase of non-standard accessories for pool vehicles or those allocated on a business/private basis are to be approved by the Chief Executive or delegate, e.g. vehicle to be used regularly for country travel could be fitted with driving lights (fog lights), windscreen guards. Unless a strong business cases exists there is no place for a vehicle with non-standard accessories in a fleet. All station wagons are to be fitted with steel cargo safety barriers or barriers that comply with Standard AS/NZS 4034-1992. 7.5.2 Accessories Charged to Employee All accessories (optional extras) such as optional sound systems, satellite navigation systems, sunroofs, towbars (not required for official purposes), baby seats, sports packs etc. may be installed in 100% private vehicles and those allocated on a private/business basis, however, the 100% cost of such alterations, additions will be at the employee’s expense and the employee will forfeit any right to either remove or receive compensation for the non-essential accessory prior to disposal. The fitting of such accessories are to be expressly approved by the Chief Executive or delegate. Personalised number plates are not permitted on NSW Health fleet vehicles including 100% private vehicles (except those vehicles under novated lease). 7.5.3 Accessories - General All fitted accessory items must comply with and be used in accordance with the vehicle manufacturer’s recommendations. 7.6 Written Acceptance of Conditions There must be a suitable written acceptance by the employee acknowledging receipt of the relevant policy statement(s), and accepting the conditions and obligations under the terms of the policy. Written acceptances are required for employees under arrangements 6.1 (Health Service Executives), 6.2 (Award Employees of the NSW Health Service), and for those employees approved on an on-going basis under 6.3 (Official Pool Vehicles). Written acceptance is to include an express acknowledgement by the employee that continued access to a NSW Health vehicle for private use is conditional upon any future variations made to either charges or conditions of use of vehicles determined by the Department of Health from time to time. 7.7 Tolls, Parking Fees and Parking Space Levies 7.7.1 Tolls Tolls incurred on business/official travel can be claimed back by the employee. Any tolls incurred during private travel must be met by the employee concerned. Payment of tolls is not part of the calculated annual contribution by employees.

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7.7.2 Parking Fees For all 100 % private use vehicles (this includes vehicles leased under a novated lease and privately owned vehicles), the cost of parking on a public health organisation leased premises will generally be fully recovered from the employee. A Chief Executive has the discretion to waive this requirement on a case-by-case basis taking into account particular working requirements and conditions, occupational health and safety issues and other matters that the Chief Executive determines are relevant. This includes disability, where applicable. The cost of the parking space used by a NSW Health fleet vehicle that is packaged on a private/ business basis is an expense borne by NSW Health. This is because the vehicle is available for business use during the normal business hours in which it is parked on business premises. However, employees will remain personally responsible for meeting the cost of the Parking Space Levy (where applicable). 7.7.3 Parking Space Levy Employees who have access to a parking space (whether the vehicle is 100% private or split on a private/business basis) are required to meet the cost of the Parking Space Levy where it applies. The following points should be noted: The levy can be met by executives or other eligible employees on a salary sacrifice basis

provided the arrangement is made prospectively. This means the election to salary sacrifice should be arranged before the employee uses the parking space for personal advantage.

Should an exceptional circumstance arise where a non-NSW Health executive employee is

provided with the use of a parking space that gives rise to a personal liability for the Parking Space Levy, payment by the employee should be made from post-tax salary. This payment can be treated as an employee contribution for the purpose of reducing the FBT taxable value in situations where a non-executive has a packaged vehicle.

The Parking Space Levy is exempt from the Goods and Services Tax (GST). This means the

employee should not pay GST on the amount of the levy even where it is treated as an employee contribution for the purpose of calculating the FBT taxable value.

7.8 Health and Safety Employers have a duty of care to provide and supervise a safe system of work under the Occupational Health and Safety Act 2000. This includes an obligation on NSW Health to maintain plant and systems of work that are safe and without risk to health. A vehicle used for business is considered a work place. Each NSW Health organisation must also provide such information, instruction, training and supervision necessary to ensure the health and safety of employees. Vehicles are to be maintained in accordance with the manufacturer’s requirements, and must at all times comply with relevant road transport legislation. All NSW Health vehicles are to carry a First Aid Kit. Smoking is not permitted in NSW Health vehicles.

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Drivers must not use mobile telephones unless a hands-free device is fitted. It is illegal for a driver to use a mobile telephone when driving unless a hands-free device is being used. Under no circumstances should NSW Health vehicles be used to transport hitchhikers. 7.9 Traffic Infringements NSW Health should take appropriate steps to record the identity of a driver of a vehicle in case of accident or where financial and/or points penalties are imposed. The use of running sheets meets this requirement. In the case of vehicles packaged on a private/business basis, the absence of running sheets or other appropriate measures to record business use of such vehicles, will make the employee who has packaged the vehicle liable for any financial and/or points penalties imposed. The driver in control of a vehicle at the time of any offence must pay for all traffic and parking infringements promptly. If NSW Police notifications or reminders are issued in the organisation’s name, the driver’s details must be obtained from the vehicle running records and the Statutory Declaration provided on the reverse side of the fine should be completed and returned promptly to the State Debt Recovery Office. The fine will then be reissued in the nominated driver’s name. This should ensure that the driver of the vehicle and not the NSW Health organisation is fined. Each NSW Health organisation is to monitor fines and incidents to ensure drivers continue to be appropriately licenced. 7.10 What To Do in Case of Accidents A driver involved in an accident is required to stop and render assistance, regardless of whether on official business or not. Employees involved in accidents must comply with all legal and insurance requirements such as obtaining particulars of parties involved and notification of police and the appropriate officer in the NSW Health organisation. The driver must: Stop at the scene; Attempt to make the scene as safe as possible; Render assistance to any person injured; Arrange emergency services as required; Exchange vehicle and licence information with the other driver(s); and Not admit liability.

The Police must be called to the scene of the accident where the following occurs: A person is injured or killed; Any of the drivers involved in the accident fail to stop after the accident; Any of the drivers involved in the accident appear to be under the influence of alcohol or drugs;

or A vehicle involved in the accident has to be towed.

The Police Advice Line for reporting accidents is 131 444.

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7.11 Biofuels and Other Alternative Fuels (Premier’s Memorandum No 2006-05 refers) The NSW Government is committed to the use of biofuels and other alternative fuels as part of the Government’s overall Cleaner NSW Government Fleet Policy. Biofuels such as 10% ethanol blended petrol (E10) and biodiesel are considered a renewable fuel source when produced from agricultural crops, animal fats or cooking oils. All employees (and contractors) who drive Government-owned vehicles, are required to use E10 blends (or other alternative fuels) where this is practicable, available, and cost-effective. All government vehicles are to be issued with fuel cards specifically providing for the consumption of E10.

(Note: E10 may be not be suitable for all Government-owned vehicles, and should not be used if the vehicle manufacturer has stated that the E10 will void vehicle warranties or damage the vehicle.)

The location of fuel outlets that sell E10 blended petrol can be found at the NSW Department of Commerce web site. As at March 2007, the following links can be used: http://www.caltex.com.au/media_files/PressItem.876.1206.pdf http://www.nowwhere.com.au/caltex/austlocator/search.aspx 7.12 Removal of V8 Powered Vehicles from Government Contract (Premier’s Memorandum No. 2006-05 and Department of Health Purchasing and Supply

Manual at page 6.26 refer) In keeping with the decision to remove V8 powered vehicles from the Government contract for the acquisition of Motor Vehicles, the NSW Government has determined that public service staff or executive officers will not be permitted to obtain a V8 powered vehicle under a novated lease arrangement. This decision is in line with the NSW Government’s Cleaner Vehicles Action Plan, of which a key element is a commitment to improve the environmental performance of the NSW Government fleet. Chief Executives therefore are not to enter into any novated lease arrangement for V8 powered vehicles with their staff. ‘Emergency vehicles’ used by an ambulance service are exempted from this policy. All requests for a V8 powered vehicle for exempt categories must be authorised by the General Manager, StateFleet. Clarifying definitions of ‘emergency vehicle’ and exemptions to this policy appear in Premier’s Department Motor Vehicle Policy which can be accessed via Premier’s Department website at http://www.premiers.nsw.gov.au in the ‘Publications’ section under ‘Travel’. Public sector officials who currently have Government-owned vehicles as part of their remuneration package, are encouraged to replace the existing vehicles at the due replacement time with a hybrid vehicle.

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FLEET MANAGEMENT Monitoring Vehicle Utilisation Each area must establish a fleet management system to monitor the usage of each motor vehicle in its fleet with the objective of maximising utilisation, minimising change-over costs and minimising vehicle numbers. It may be undertaken in-house, be negotiated directly with StateFleet (without the need to call tenders) or outsourced to a private sector fleet manager (subject to normal tendering requirements). When considering purchase of an additional vehicle or replacement of an existing vehicle, organisations should include in their assessment the criteria listed at Appendix 1. If an area funded purchase and/or operating costs from external sources and that funding has ceased, any vehicle replacing the original externally funded vehicle should be assessed on the basis of an additional vehicle. Purchased motor vehicles must be depreciated over their estimated total useful life in accordance with AAS4 “Depreciation of Non-Current Assets” subject to materiality. A fundamental element of the Treasury Managed Fund is the adoption of risk management practices by participating agencies. Agencies are responsible the development of programs that best fit their exposures. Drivers and Fleet Managers must ensure that the most economically practicable vehicle among those available is selected for each journey. This will generally be the smallest vehicle able to accommodate the people and goods to be carried in safety and reasonable comfort. Fleet Management Information System Organisations with 10 or more vehicles in their light passenger motor vehicle fleet for a continuous period of six months are to implement a fleet management information system for this fleet. Where areas have implemented a fleet management information system, the system will be capable of providing reports which include, at least, those information items listed hereunder. The system needs to ensure that input tax credits for recouping the GST feeds into the organisation’s business activity statement (BAS). Fleet Management Information System Minimal Reporting Capability 1. Number of vehicles in the fleet for each of the following categories:

Sedans Station Sedans Utilities Four-Wheel-Drive Vehicles Panel Vans Passenger Vans Buses

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2. Individual vehicle information for the asset register will include:

Registration No. Class (either Large, Medium, Small) Make Model Body Type Engine Capacity Number of Cylinders Tank Capacity Allocation to Branch (if applicable) Insurance Classification Forecast Replacement Date Purchase Date Purchase Price

3. Management information reports on the fleet asset register will include:

Listing of outstanding vehicle orders Listing of vehicles due for disposal within a time limit (e.g. 3 months ahead) Listing of vehicles overdue for disposal Listing of vehicles in order of forecast disposal date Listing of out-of-service vehicles awaiting disposal Historical information on motor vehicle disposal (e.g. date, sale price, etc.)

4. Management of Leased Vehicles

Lease details A system of lease management that ensures the organisation avoids penalties and

efficiently ensures that delivery of new vehicles is aligned with the disposal of old vehicles.

5. Management information on fleet utilisation will include:

Individual vehicle utilisation rate (kms/week) - showing model - showing location/program, cost centre

Individual vehicles outside set utilisation limits Fleet utilisation rate (kms/week)

6. Management information on fuel utilisation will include:

Listing vehicles outside fuel consumption limits Listing fills between dates by supplier Listing fills between dates by registration number Listing all fills for a specified vehicle Listing fuel purchase credit cards by registration number Listing total fuel consumption for selected period by fuel type.

There is to be a system to record fuel cards issued and cancelled, including a system of automatically cancelling cards when vehicles are disposed of. The processes followed need to be consistent with Treasurer’s Direction 89/2.

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7. Information on whole-of-life and/or period costs will include:

Maintenance and other costs (e.g. services, scheduled maintenance, breakdown repairs, damage repairs, etc.)

Running costs (fuel, oil, tyres, etc.) Itemised costs for a specified vehicle Summary of life-to-date costs* for the fleet Whole-of-life costs ** (after sale) for a specified vehicle Life-to-date cost per km for a specified vehicle FBT and value of reportable fringe benefits provided to employees It also needs to take into account any requirements of the Government Energy

Management Policy (GEMP). 8. Additional information items which areas would find useful, but are not essential, include

the following:

Budget estimates of replacement schedule for current and/or next financial year(s) Listing of fuel fills between dates by model Listing of average fuel consumption for selected period by model Average life-to-date cost per km for each model in the fleet

* Life-to-date costs include all operating costs incurred since acquisition of vehicles. ** Whole-of-life costs (after sale) include all costs incurred during vehicle operation, depreciation,

opportunity cost (interest costs), etc. Motor Vehicle Records Vehicle History File A separate vehicle history file is to be maintained in respect of each vehicle. The file will usually commence with the authority to order and a copy of the order. All papers, or copies of papers, pertinent to the vehicle, i.e. registration, insurance, maintenance accounts, accident reports, etc., are to be attached to the file. The Vehicle History File will be a valuable source of management information where no fleet management information system is maintained. New Vehicle Inspection Sheet All areas are to complete a new vehicle inspection sheet (the format of which is shown at the end of this section (Appendix 2) for each new vehicle received. Upon delivery of a new vehicle, it is to be thoroughly inspected, inside and out, and road tested at least to the extent of the items listed in the inspection sheet. Any defects are to be recorded and if necessary, the vehicle is to be returned to the supplier for repair and the sheet noted accordingly. The new vehicle inspection sheet is to be attached to the vehicle history file.

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Motor Vehicle Register Where no fleet management information system is maintained, a register should be kept in each area listing every vehicle in the current fleet and showing: registration number make and type engine number chassis number location (Branch, Centre etc.) order number cost received (date) disposed of (date) disposal price number of receipt (issued to auctioneer etc. paying for vehicle) replaced by (registration number) total kilometres travelled on disposal remarks

Where a fleet management information system is maintained only the following need be recorded in the register: registration number replaced by (registration number) total kilometres travelled on disposal

The register eliminates the need for motor vehicles to be placed on inventory sheets. Motor Vehicle History Sheet Where a fleet management information system is not maintained due to the fleet size, a motor vehicle history sheet must be kept for each vehicle and updated on a monthly basis from information obtained from the motor vehicle running sheet. The history sheet should be kept at the front of the vehicle history file. The format of the history sheet is shown at the end of this section (Appendix 3). Note that it is no longer a requirement to complete the columns from “Insurance” to “Total Costs” inclusive, as long as details of all relevant payments are attached to the individual motor vehicle file so that information regarding total costs may be extracted if necessary. RUNNING SHEETS Fringe Benefits Tax For the purposes of assessing the taxable value of car fringe benefits as required by the Fringe Benefits Tax Assessment Act 1986, certain information is to be recorded on running sheets. Where the Statutory Formula method is used to calculate the value of a car fringe benefit or the prescribed period has elapsed for keeping a log under the Cost Basis method, information to be recorded must include the following:

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Vehicle registration number make, model and colour

Journeys date of the journey name of the driver times the journey began and ended odometer reading at the end of the journey destination of journey purpose or purposes of the journey place where garaged overnight (if not at base)

Petrol and Oil date of issue odometer reading at the time number of litres of fuel received type of fuel brand of fuel cost of oil received place of issue means of payment, e.g. petro-credit card, cash, issue docket number, etc.

Where the Cost Basis method is used to calculate the taxable value of a car fringe benefit, for a continuous period of 12 weeks at any time in the first year that fringe benefits tax is payable, the driver must record the following: Vehicle registration number make, model and colour

Journeys time the journey began and ended date the journey began and ended odometer reading at the start and end of the journey distance travelled in the course of the journey places where the journey began and ended purpose or purposes of the journey name of the driver (by whom entries MUST be made) signature of driver date on which the entry is made.

Ordering of Vehicles NSW Health must lease all standard passenger and standard light commercial vehicles through the New South Wales Government leasing facility unless exempted by Treasury. The leasing facility is managed by StateFleet Services, a business unit of the Department of Commerce.

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Should any vehicles be purchased (not leased) they must be included on the agency’s asset register. NSW Health must purchase associated goods and services through contracts, where available, arranged by the NSW State Contracts Control Board (SCCB) unless a specific exemption is approved by Treasury. Standard passenger, standard light commercial and 4-wheel drive general purpose motor vehicles must be replaced in accordance with the requirements of the SCCB Motor Vehicle Contract (no. 653) and the Treasury leasing arrangements. Leased motor vehicles must be accounted for, for financial statement purposes, in accordance with AAS17 “Accounting for Leases. In particular, motor vehicles leased through StateFleet constitute operating leases and must be accounted for as such under AAS17. If an appropriate vehicle for a specific work-related application is not available in contract, NSW Health should seek advice from StateFleet or NSW Supply on alternative procurement options. Where there is an operational need backed by a business case, NSW Health may request to either lease or purchase outright heavy or non standard commercial vehicles (over one tonne capacity) through StateFleet. Motor vehicle associated goods and services, including accessories, repair and servicing, lubricating oils and greases, fuel and disposal services are also available through SCCB contracts. Agencies are required to use these contracts. Vehicles that exceed the luxury car tax threshold set by the Australian Taxation Office cannot be procured through the leasing facility. In light of expensive fuel and running costs and increased greenhouse gas emission levels, V8 powered vehicles are no longer available under the Motor Vehicle Acquisitions contract. V8’s are not to be leased/purchased for staff etc and Chief Executives are not to enter into any novated lease arrangements for V8 powered vehicles for their staff. The exception in respect to NSW Health is where a vehicle is used by an ambulance service and is visibly marked on its exterior for that use and is fitted with a flashing warning light and a variable horn, bell or alarm that can give audible warning of approach. (Any other operational requirement exception can be approved by the General Manager, StateFleet.) Orders are to be placed on contractors for the type of vehicles required, as shown in the contract arranged by the State Contracts Control Board and StateFleet. In areas outside the Sydney metropolitan area, orders are to be placed with dealers who are agents for the company producing the type of vehicle required. Orders should show the name and telephone number of the officers at the Division who may be contacted in regard to enquiries. When the vehicle is available for collection, contact will be made by the dealer (agent) with the officer named in the order requesting that arrangements be made regarding “Third Party” insurance and registration. The following information is to be obtained from the dealer/agent: name and model of vehicle body classification and colour

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horsepower and weight of vehicle engine and chassis numbers number of cylinders class of tyres and wheel base ) trucks only number of axles )

It should be noted that the only persons authorised to approve the purchase of motor vehicles are those officers with a specific delegation to do so. “Third Party” Insurance NSW Health must effect compulsory Third Party insurance with the commercial insurer contracted through the Treasury or in accordance with contract arrangements applicable to vehicles subject to novated leases. The following information is to be provided: engine number where the vehicle is to be garaged

Comprehensive Insurance The Treasury Managed Fund (TMF) will meet in full all claims, exceeding $300, made by third parties for damage to property caused by the operation of NSW Health vehicles and all own damage claims. The $300 limit is a TMF franchise and claims up to that amount will not be accepted by TMF with the responsible body to meet the cost of that claim. Full detail is provided in the Treasury Managed Fund Contract of Coverage at Section E2. Registration Two copies of the registration form must be completed. Form 1 is to be used for motor cars and Form 4 for motor lorries and utilities. Registration is to be in the name of the Health Administration Corporation. Registration is payable on Government vehicles. The original of the registration form, plus the duplicate and triplicate of the Third Party policy are to be taken to the dealer who will arrange for the vehicle to be registered and advise when the vehicle is ready for collection. Repairs and Maintenance of Motor Vehicles Motor vehicle associated goods and services, including accessories, repair and servicing, lubricating oils and greases, fuel and disposal services are also available through SCCB contracts. Agencies are required to use these contracts. Orders for Repairs and Processing of Accounts The Transport Officer or other officer fulfilling that role is to prepare an order for repairs, service, etc. in triplicate - original (white copy) to repairer, duplicate (pink copy) to the driver and the yellow copy to remain in book. When the vehicle has been serviced to the satisfaction of the driver, the pink copy of the order is to be signed by the driver and returned to the Transport Officer to await receipt of the invoice. When the invoice is received it is to be checked with the pink and yellow copies of the order, labour and material costs entered on the pink copy and the pink copy attached to the vehicle history file

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(or a copy of the invoice may be attached to the file). The yellow copy is retained in the order book and invoice number, debit code, total cost and date voucher passed for payment entered thereon. The voucher is to be forwarded to the accounts section for payment. Fuel Supplies - Credit Cards Details of the system of using credit cards for fuel purchases are included in the Accounting Procedures Manual. Disposal of Motor Vehicles It is mandatory that standard passenger, light commercial and four wheel drive general purpose motor vehicles (under one tonne capacity) are retained for a minimum of nine months or 15,000 kilometres and replaced in accordance with lease terms and operational needs. Notwithstanding, the minimum acceptable lease term for vehicles acquired through StateFleet Services is the period in which the vehicle is expected to travel 40,000 kilometres (provided the period is not less than nine months). The replacement criteria for other vehicles are to be aimed at achieving the best long-term return on investment for each vehicle type. Appropriate economic analysis should be regularly undertaken to determine when non-standard passenger and four wheel drive and commercial vehicles above one tonne but less than seven tonne capacity should be replaced. Commercial vehicles of seven tonnes or greater capacity may be retained until the end of their useful economic life. The condition, running costs and use of such vehicles should be reviewed annually. Vehicles are generally to be sold registered, but in some cases there may be a need to sell a vehicle unregistered. Agencies are required to dispose of leased vehicles in accordance with any policies and procedures as determined by the leasing facility. This includes compliance with any instructions issued by StateFleet relating to the condition of vehicles at time of sale. The law requires all registered vehicles that are offered for sale at auction have a RTA Safety Inspection Report (“pink slip”). Vehicles sold at auction without a pink slip must be sold unregistered. Vehicles disposed by insurance company write-off may be subject to a registration rebate. On receipt of a new vehicle the replaced vehicle must be submitted promptly for sale. On no account are replaced vehicles to continue in service as additional vehicles unless specifically authorised by State Health. Tenders An advertisement giving details of the car, where and when it can be inspected and how and when tenders will be accepted is to be placed for two consecutive weeks in the local newspaper and the papers in surrounding districts. Payment is to be accepted only in the form of cash or a bank cheque and paid to the local Public Moneys Account for transmission to the Treasury.

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On receipt of payment in full the vehicle is to be handed over to the purchaser after the number plates and registration label have been removed. Number plates are to be returned promptly to the Roads and Traffic Authority. Auction Advertisements giving details of the vehicle, where and when it can be inspected and how and when it will be auctioned are to be placed two weeks running in the local newspaper and the papers in surrounding districts. The advertisements are only to be placed after arrangements have been made with a local auctioneer to auction the vehicle. Auction to be on the basis that the highest bid will not necessarily be accepted but will be submitted for acceptance on completion of the auction. Acceptance of the highest bid to be authorised by the Tender Committee, having regard to current prices for vehicles. Payment and delivery to be as in section on tenders. OFFICERS ARE TO ENSURE THAT NRMA MEMBERSHIP CARDS, MOTOR VEHICLE RUNNING SHEETS, PETROL CARDS, IDENTIFICATION STICKERS ETC. ARE REMOVED FROM VEHICLES BEFORE DISPOSAL. Equity in Vehicles The change-over charge on an individual car will not be charged to the individual’s package, if the holding period is served. Holding Period (now lease period and penalties apply in some cases) The current holding period of Government vehicles is two years or until the vehicle has travelled forty thousand kilometres, whichever occurs sooner. This policy will remain in force until otherwise revised based on commissioned studies of optimal holding periods. Motor Vehicle Numerical Profile Introduction The information in this section provides those with responsibility for Motor Vehicles in public health organisations with specific directions on the implementation of the Numerical Profile, audit, recommendations on the timing of audits, training and accreditation and future issues. If you have any queries regarding the attached information, please contact the Corporate Governance and Risk Management Branch of the Department of Health. What does the Numerical Profile measure and how is it used? A Motor Vehicle audit using the Numerical Profile measures the existence of motor vehicle policies, procedures and systems in five main areas of the workplace:

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1. Adm inistration 2. Meeting Service Needs 3. Occupational Health, Safety & Security 4. Vehicle Utilisation 5. Acquisition and Disposal The Numerical Profile does not measure motor vehicle management in minute detail under these main areas, but is focused on best practice. A Numerical Profile at a health facility will provide management with a report showing percentage scores for each area evaluated, as well as a percentage score for the facility as a whole. In addition, the Numerical Profile provides management with clear steps for improvement in order to achieve an improved score. Management may conduct as many audits required to monitor improvements and increase standards and scores. However, one audit per year is considered adequate for these purposes. Who is responsible for ensuring the Implementation of the Numerical Profile? The profile is a guide for management to use if they want to assess the adequacy of the management of their vehicle fleet. It is not compulsory, however, it is a tool for Chief Executives to use in achieving best practice. Who can conduct a Numerical Profile audit? The Numeric Profile audits may be conducted by a local survey team selected either from the facility under review or another facility within the area health service or under any other arrangement that is considered appropriate. How is the Numerical Profile Implemented? The Department recommends that wherever possible, trained surveyors conduct Numerical Profile audits. This will ensure that both the auditor and management are assured of an objective approach to the measurement of motor vehicle management in a health care facility. When should Numerical Profile audits be conducted? All health care facilities in NSW Health should, at minimum, be audited yearly. Additional workload for practitioners: It is important for Chief Executives to recognise the additional workload that the practice of assisted auditing will incur. The conduct of audits will incur expenditure that is to be borne by the area being audited. THE NSW DoH MOTOR VEHICLE NUMERICAL PROFILE CONDUCTING THE AUDIT In order to uniformly measure motor vehicle management performance, the DoH in conjunction with representatives of the health system has developed the Motor Vehicle Numerical Profile.

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The Numerical Profile measures three aspects: 1. The existence of motor vehicle:

Policies Procedures Systems

2. The awareness of such policies, procedures and systems in the workplace. 3. Their application in the workplace. 4. The delivery of reasonable outcomes as to best practice in motor vehicle management. The Profile delivers:

a simple, comprehensive measure of motor vehicle management performance feedback to managers the identification of critical areas for improved performance the identification of specific improvement plans.

The Numerical Profile has a possible score of 530 points, consisting of five sections, each worth varying points that are weighted according to their relevance to providing best motor vehicle management. Each section comprises a number of parts relevant to that particular topic. The parts are each rated separately as either A, B, C, or D and are weighted relative to other parts of the profile in each section. The Overall Assessment Sheet provides a graphic indication of performance by section. Assessors have been instructed to determine gradings on a “hard but fair” basis. This ensures a consistent approach to grading throughout the Department. Accordingly, where a criteria for a grade is not absolutely attained, the lower grading is assigned. The Profile is not designed so that a health care facility passes or fails should it achieve a score above or below 50%. As a guide, a health care facility with a good motor vehicle management program should score above 65%. POINTS IN CONDUCTING THE NUMERIC PROFILE 1. Do not take people’s word for functions that have to be or are undertaken. Verify where

possible with formal documentation and discussion with relevant personnel, e.g. transport staff, management, etc.

2. Allow sufficient time to complete the audit. Do not rush or take short cuts as this will result in

an inaccurate numeric profile. 3. Promote and conduct the audit as a positive, pro-active exercise wherein there is an exchange of

ideas to develop strategies for improvement. 4. Complete notes progressively so as to provide a comprehensive assessment and guide to future

improvement strategies.

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5. Reports should be completed as soon as possible, e.g. 1 month and findings discussed with management. Strategies should be developed to implement improvements and determine target dates and follow-up audit timings.

6. The numeric profile may be used to demonstrate improved performance and outcomes as part

of the EQUIP program. PARTS NOT APPLICABLE Where parts of the numerical profile are not applicable due to particular local circumstances, (e.g. no patient transport) then the overall total points score (530) should be reduced by that part that is not applicable. How to Score The Numeric Profile incorporates a base method for scoring viz. 1. A straight score basis with no attachments assessment criteria, e.g. MEETING SERVICE NEEDS

III Service Provision

Standard Achieved and

Score D No evidence of fleet configuration having been assessed to meet service

needs.

D-0

C Some evidence of fleet configuration meeting service needs and

reviews apparent.

C-5

B There is evidence that the number and type of vehicles reflect the

current services provided and that there are monitored and reviewed when there is a change in service provision.

B-25

A As well as B, the fleet configuration meets all requirements of the

Motor Vehicle Fleet Policy regarding utilisation for business use.

A-40

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OTHER COMMENTS The officer undertaking the audit should prepare comments for management in respect to matters that whilst not necessarily pertinent to conducting the numeric profile do have an effect on the efficient running of the cleaning service in a health care facility. A page is included titled “Other Comments” at the back of the numeric profile package.

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MOTOR VEHICLE FLEET NUMERICAL PROFILE REPORT FOR

SCORE: %

ASSESSMENT NUMBER:

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MOTOR VEHICLE FLEET NUMERICAL PROFILE REPORT

HOSPITAL LOCATION DATE OF ASSESSMENT ASSESSMENT CONDUCTED BY TELEPHONE NUMBER PRINCIPAL CONTACTS Should you have any queries regarding this Report please do not hesitate to contact Assessor at the Area Commercial Services Department on (02)

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CONTENTS 1. ASSESSMENT CRITERIA 2. INDIVIDUAL SECTION FINDINGS TABLES 3. OVERALL ASSESSMENT SHEET 4. STANDARD QUESTIONS FOR CONDUCTING REVIEWS

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RISK MANAGEMENT NUMERIC PROFILE

MOTOR VEHICLE FLEET POLICY SECTOR LEVEL

NB: “DEFINITION OF DRIVER” = Any employee required to drive a health service vehicle. 1.0 ADMINISTRATION

I MOTOR VEHICLE FLEET POLICY

Standard Achieved and Score

D No written statement of Motor Vehicle Fleet Policy.

D - 0 C There is a written Motor Vehicle Fleet Policy that conforms with DoH

policy.

C - 5 B In addition to C, the Motor Vehicle Fleet Policy has been distributed to

departments. Managers, supervisors and employees are aware of their responsibilities within the policy.

B - 10 A In addition to B, the policy is reviewed annually and any changes

implemented. Responsibilities of managers, supervisors and employees are emphasised. A system is in place to monitor compliance with the policy.

A - 25

II RECORDS

Standard Achieved

and Score D No evidence that required motor vehicle records are being maintained,

e.g. history file, register, inspection sheets, history sheet.

D - 0 C All required records exist.

C - 10 B In addition to C records are up to date.

B - 30 A In addition to B records are regularly reviewed and action taken on

anomalies identified.

A - 50

III ALLOCATION


D There is no policy on the allocation of vehicles.

D - 0 C A policy exists for the allocation of vehicles.

C - 5 B In addition to C regular reviews are undertaken to ensure that only

officers authorised to be allocated vehicles have been.

B - 10 A In addition to B rates of charge are verified regularly for private usage.

A - 20 Administration Score /95 % Score for Administration %

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2.0 MEETING SERVICE NEEDS

I PATIENT TRANSPORT


D No criteria or assessment of vehicles to meet patient transport needs.

D - 0 C There is a set criteria or assessment made to determine that patient

transport vehicles meet client and service needs regarding size, safety, communications, infection control, transport equipment and running costs.

All patient transport vehicles are uniformly identified as per Area policy. Regular maintenance safety checks are carried out by the drivers. These checks are documented and follow up action is noted.

C - 30

B As well as C, regular reviews are conducted regarding utilisation against

service and client needs, with services already provided by other Sectors being considered.

B - 45

A As well as B, findings of the review are documented and follow up action

is taken and noted.

A - 65

II COURIER SERVICES (includes Group Services)


D There is no evidence that courier and cartage vehicles meet service needs

regarding size, safety, infection control, communications and running costs.

D - 0

C Courier and cartage vehicles meet service needs regarding size, safety,

infection control, communications and running costs and there is evidence that assessments have taken place.

Courier timetables are widely published and available to all staff. Regular maintenance safety checks are carried out by drivers. These checks are documented and follow up action is noted.

C - 30

B As well as C, regular reviews are conducted regarding service provision

and timetables to ensure the highest level of efficiency in keeping with the total Area courier service.

B - 45

A As well as B, findings of the reviews are documented and follow up

action is taken and noted.

A - 65

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III SERVICE PROVISION


D No evidence of fleet configuration having been assessed to meet service

needs.

D - 0 C Some evidence of fleet configuration meeting service needs and reviews

apparent.

C - 5 B There is evidence that the number and type of vehicles reflect the current

services provided and that these are monitored and reviewed when there is a change in service provision.

B - 25

A As well as B, the fleet configuration meets all requirements of the Motor

Vehicle Fleet Policy regarding utilisation for business use.

A - 40

Meeting Service Needs /170 % Score for Meeting Service Needs %

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3.0 OCCUPATIONAL HEALTH & SAFETY

I MOTOR FLEET DRIVER SAFETY

D. Little attention is given to OH&S aspects of motor vehicle activity.

D - 0 C. All drivers have a current driver’s licence and a check is undertaken at

least annually to ensure currency. Written safety rules/instructions given to all drivers.

C - 10

B. In addition to C, fleet loss control activity is integrated into OH&S

program, e.g. motor vehicle accidents should be treated as any other work accident, i.e. recorded, investigated, remedial action identified and implemented.

B - 30

A. In addition to B, efforts are made to regularly check the competency of all

drivers. All heavy vehicle drivers given an annual driving check by appropriate check driver. Defensive driver training provided.

A - 40

II CONDITION/CARE OF VEHICLE FLEET


D No regular inspections of vehicles and service details.

D - 0 C Some inspections of vehicles and service details but not regular and not

documented. Some vehicles serviced regularly over the warranty period by the dealer. Defects are fixed within a reasonable time from the date of reporting. All accident insurance matters are referred to the Area Commercial Services Department on the required claim form and within a reasonable time from the date of accident.

Responsibilities of drivers are clearly written, distributed and reinforced. All vehicles carry identification stickers. All vehicles carry instructions to drivers in the case of an accident.

C - 10

B In addition to C, a documented system is in place for recording of regular

inspections, defects and service details of all vehicles. Inspections include cleanliness of interior and exterior of the vehicle. All vehicles regularly serviced over the full warranty period by the dealer. All new vehicles inspected in and new Vehicle Inspection Sheet used.

B - 20

A In addition to B, a system of recording follow up action taken after each

inspection or report of defect is in place.

A - 30

Occupational Health & Safety /70 % Score for Occupational Health %

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4.0 VEHICLE UTILISATION

I USE OF VEHICLES


D There is no system for review of vehicle utilisation.

D - 0 C A system is in place to review vehicle utilisation and on a time basis (see

example methodology attached). Running sheets are regularly reviewed to identify areas of abuse.

C - 20 B In addition to B, vehicle if required to be driven home because of no

secure overnight parking are only driven by those persons who live closest to the centre. Vehicles are rotated regularly from high to low kilometre usage areas.

B - 40

A In addition to B, the regular utilisation reviews are acted upon and

reported to Senior Management.

A - 60

II MOTOR VEHICLE POOL SYSTEM


D Vehicles are not pooled and there is no system for recording daily vehicle usage.

D - 0 C A system for control and daily use of vehicles is in place but not utilised

for all vehicles. Vehicles are garaged in secure off street areas.

C - 10 B A system for control and daily use of vehicles is in place and used for all

vehicles. A notation is made for vehicles garaged overnight away from the unit.

B - 25 A In addition to B, all vehicles managed by the unit are available for pool

use. There is evidence that the driver’s licence status is checked on a regular basis.

A - 45

III RUNNING SHEETS

Standard Achieved

and Score D Running sheets not completed.

D - 0 C Running sheets in approved format are completed.

C - 30 B In addition to C, regular checks of running sheet data for compliance with

policy. Supervisor or designated officer signs all running sheets as evidence of checking.

B - 40 A In addition to B, follow up action is taken with drivers regarding

compliance with the policy and follow up action is documented.

A - 60 Vehicle Utilisation /165 % Score for Vehicle Utilisation %

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METHODOLOGY 1. Vehicles to be separated into personal allocation and pool vehicles. 2. Sample period of two months motor vehicle running sheets to be examined by dividing each

day in half and determining how each vehicle was used for that half day, viz.

i) used on official business, even if only for 2 hour, the vehicle is to be shown as being utilised for the half day;

ii) not used at all; iii) not used in the half day, but used as transport from the office to the officer’s home and

vice a versa. If, however, the officer used the vehicle the following morning or previous evening directly in the field on official business the occasion would not be included in the percentages of purely office to home private usage, but would be included in point (i) above.

NB Home to office or office to home is not to be counted as official usage.

with percentages being calculated as to:

A. % of half days vehicles used on official business; B. % of half days vehicles used as transport to and from officers’ residences as purely

private usage. 3. Utilisation rates of vehicles to be tallied and divided by a standard of 70% to determine number

of vehicles that should comprise a particular area’s fleet size.

There exists no standard measure to determine when a vehicle should be allocated, however, 70% official usage has been used over the past ten years during audits and also in a previous Statewide motor vehicle survey conducted in the mid seventies.

Seventy percent is considered a conservative standard to use as the basis for the allocation of an official vehicle, i.e. used on official business 31 half days out of possible 44 in a standard month or 32 days in a 5 day week.

Limitations to Methodology Motor vehicle running sheets possibly not assessable due to unsatisfactory completion.

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5.0 ACQUISITION AND DISPOSAL

I ACQUISITION AND DISPOSAL


D There is no policy as to who can approve the acquisition and disposal of

vehicles.

D - 0 C The local policy states which officer can approve acquisition and disposal

of vehicles.

All light commercial vehicles are monitored for usage and recommended for replacement at 40,000 klms or 2 years, whichever occurs first. Use of trucks and buses is reviewed regularly for economy and appropriateness to service needs.

C - 10

B In addition to C, there is evidence that vehicles approved for replacement

have been assessed on a utilisation basis as to whether they warrant replacement.

B - 15

A In addition to B, i) a report outlining the reasons for approval for

replacement, which fall outside the policy, is provided with the request for replacement; ii) evidence that disposals and acquisitions are performed on a best value basis in line with Departmental policy, e.g. trade-ins, detailing etc.; iii) accessories are purchased in line with DoH policy.

A - 30

Acquisition & Disposal /30 % Score for Acquisition & Disposal %

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NUMERICAL PROFILE ASSESSMENT

FINDINGS TABLE LOCATION: DATE:

MOTOR VEHICLE FLEET

ISSUE

FINDING

RATING AND COMMENT 1) Adm inistration

2) Meeting Service

Needs

3) Occupational

Health & Safety

4) Vehicle

Utilisation

5) Acquisition and

Disposal

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1.0 ADMINISTRATION

ISSUE

FINDING

RATING AND COMMENT 1.1 Motor Vehicle

Fleet Policy

1.2 Records

1.3 Allocation

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2.0 MEETING SERVICE NEEDS

ISSUE

FINDING

RATING AND COMMENT 2.1 Patient Transport

2.2 Courier Services

2.3 Service Provision

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3.0 OCCUPATIONAL HEALTH & SAFETY

ISSUE

FINDING

RATING AND COMMENT 3.1 Motor fleet driver

safety

3.2 Condition/Care

of Vehicle Fleet

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4.0 VEHICLE UTILISATION

ISSUE

FINDING

RATING AND COMMENT 4.1 Use of Vehicles

4.2 Motor Vehicle

Pool System

4.3 Running Sheets

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5.0 ACQUISITION & DISPOSAL

ISSUE

FINDING

RATING AND COMMENT 5.1 Acquisition &

Disposal

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MOTOR VEHICLE FLEET NUMERICAL PROFILE

OVERALL ASSESSMENT

SCORE SHEET ADMINISTRATION

D

C

B

A Motor Vehicle Fleet Policy

Records

Allocation

Percentage score %

MEETING SERVICE NEEDS

D

C

B

A Patient Transport

Courier Services

Service Provision

Percentage score %

OCCUPATIONAL HEALTH & SAFETY

D

C

B

A Motor Fleet Driver Safety

Condition/Care of Vehicle Fleet

Percentage score %

VEHICLE UTILISATION

D

C

B

A Use of Vehicles

Motor Vehicle Pool System

Running Sheets

Percentage score %

ACQUISITION AND DISPOSAL

D

C

B

A Acquisition And Disposal

Percentage score %

Overall Percentage Score %

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STANDARD QUESTIONS FOR FLEET AUDITS Practitioners Guide

1.0 ADMINISTRATION 1.1 MOTOR VEHICLE FLEET POLICY

- Does your Organisation have a Motor Vehicle Fleet Policy which includes local issues

- Has the policy been distributed to all Departments

- How are staff made aware of the policy and their responsibilities within the policy

- Is the policy reviewed and redistributed annually

- Are responsibilities of managers, supervisors, and employees emphasised when the reviewed policy is distributed

- How does the Organisation monitor compliance with the policy

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1.2 RECORDS

- Does the organisation have:

i) New Vehicle Inspection Sheets (Attached “A”) ii) History sheets or a computer system that provides same information

(Attached “B”) iii) Motor Vehicle Register with required information (Attached “C”)

- How up to date are records.

- Does anyone review records to identify possible abuse and/or anomalies, e.g. high repair costs, low kilometres - high litres.

1.3 ALLOCATION

- Is there an established policy as to who can be allocated vehicles for:

i) private usage

ii) needs basis

iii) garaging

- Are current rates of charge being levied for personal allocation.

- Are officers paying for petrol and oil during periods of leave and is there a system in place to ensure such usage is detected.

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2.0 SPECIAL SERVICES 2.1 PATIENT TRANSPORT/DESIGNATED COURIER SERVICES

- How does the Organisation determine what is the most suitable vehicle to meet the needs of the particular service (eg how are reviews of the service conducted)

- How are patient transport vehicles identified (eg what signage is used and is it consistent with the Area Policy requirements)

- Are regular maintenance safety checks of vehicles and equipment (such as fire extinguishers, seat belts, indicator lights, stretchers etc.) carried out by drivers or other responsible staff. These must be documented and show evidence of follow up action with the driver.

- Is utilisation of vehicles assessed against service needs (how is this done eg documented reviews)

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3.0 OCCUPATIONAL HEALTH & SAFETY 3.1 MOTOR FLEET DRIVER SAFETY

- Is a register maintained of all approved drivers, showing licence details

- Is the register reviewed and updated annually

- Are written instructions or a handbook provided to drivers

- Is there a formal driver orientation programme in place

- Do performance appraisals include a declaration from drivers regarding the current status of their licence

- Have all patient transport drivers attended a driver training course

- Have skills and experience of patient transport drivers been checked (eg has the supervisor accompanied the employee in the respective vehicle/s prior to that employee being required to transport patients/clients)

- Are patient transport driver’s skills checked when a new vehicle is purchased (eg to ensure that the driver is familiar with the new vehicle)

- What percentage of registered drivers have attended and passed a defensive driver training course

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3.2 CONDITION/CARE OF VEHICLE FLEET

- Do you conduct formal, regular checks of vehicles regarding service details, cleanliness, damage, water, oil etc (must be written evidence ie checklist signed by Senior Management)

- Do all your vehicles carry identification stickers

- Do all vehicles carry instructions to drivers in case of accidents

- Are all vehicles serviced over the warranty period by the Dealer

- What system is in place to follow up on reported defects (ie from checklists)

- What system is in place for notifying the Area regarding insurance claims

- Does your policy contain a statement regarding the care of vehicles by employees and action to be taken for non compliance

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4.0 VEHICLE UTILISATION 4.1 UTILISATION AND SERVICE PROVISION

- What system is in place for recording vehicle usage

- Does the system include monitoring of occasions of service, business and private klms, reasons for use, destinations etc., e.g. several vehicles travelling simultaneously to the same location.

- How is this information used (eg to check utilisation and service provision and rotation of vehicles)

- What criteria is used to determine where pool vehicles are garaged (eg given to an employee living closest to the centre)

- Are Area guidelines for utilisation used when considering approval for replacement vehicles

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4.2 MOTOR VEHICLE POOL SYSTEM

- What system is in place to monitor daily use of vehicles (eg diary, software programme etc)

- Where are on site vehicles garaged (eg locked compound)

- Where is it noted that a vehicle is garaged away from the unit (eg in diary, software package - what information is noted eg suburb, who)

- Are all vehicles available for pool use (if not which ones are not and why)

- Are random checks of the status of a driver’s licence checked (eg when a vehicle is picked up)

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4.3 RUNNING SHEETS

- Are Area approved running sheets used for all vehicles

- Are all running sheets checked for compliance with the Area policy (eg completed in full, maintained in a clean and tidy condition, they are legible and evidence of checking such as supervisors signature)

- Is follow up action taken with drivers who do not complete running sheets fully and correctly (is this action documented)

- Is the data entered onto the computer/manual system

- Are running sheets forwarded timely

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5.0 FLEET CONFIGURATION 5.1 ACQUISITION AND DISPOSAL

- What system is in place for acquiring and disposing of vehicles (eg approval, review of business use etc)

- Are all vehicles (except trucks) recommended for replacement at 40,000 klms or two years

- What system is in place for reviewing the use and appropriateness of trucks and buses (ie service needs analysis)

- Are vehicles assessed against the utilisation criteria (in the policy) prior to recommendation and approval to replace/purchase

- Has the Area an evaluation sheet to determine whether vehicles should be replaced

- If a vehicle’s utilisation falls outside the policy, is there a report outlining the reasons for replacement provided with the request for replacement

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3. FRINGE BENEFITS TAX – MOTOR VEHICLES (PD2005_531) See Appendix 4 of this section for details of Treasury Circular 99/13 re Allocation of Pool Car Fringe Benefits. The Premier’s Department Circular No. 99-29, dated 20 July 1999, alerted all employees of the implications to the changes to the fringe benefits tax (FBT) arrangements. As from 1 April 1999, employers are required to distribute certain fringe benefits on an individual employee basis and record the “grossed up” value on employee’s Group Certificates where the aggregate taxable value exceeds $1,000. The amount on Group Certificates is known as the “Reportable Fringe Benefits Amount”. Reportable fringe benefits include, amongst other things, private use of pool vehicles. As the definition of “private use” has been considerably extended by the Australian Taxation Office, it is in the best interests of all officers who use pool vehicles, to refer to the attachment headed “Instances where use of a vehicle is considered private”. Any queries in relation to private usage of pool vehicles should be directed to your local Transport Officer. Officers should contact the Australian Tax Office or consult their tax consultant for advice on their personal circumstances.

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INSTANCES WHERE USE OF A VEHICLE IS CONSIDERED PRIVATE EXAMPLES – CAR AVAILABLE FOR PRIVATE USE 1. Travel between home and a person’s regular place of employment or business, is ordinarily

private travel, eg the use of a vehicle after working overtime. 2. The travel between home and work is generally private travel (as indicated in Example 1). This

is also the case whether a person has one or more work places. However, if the “alternate workplace” is not actually a place of work of an employee, but is somewhere they are travelling as a business trip, the travel will be considered to be business travel.

To show the difference, assume a Doctor works at hospital X 3 days each week and clinic Y 2 days each week, both the travel from home to Hospital X and home to clinic Y will be considered to be private travel on the basis that it is home to work travel.

However, if another Doctor generally works at Hospital X 5 days per week but travels to Clinic Y irregularly on an as-needed basis or only once per month for a specialist clinic, the trip from home to clinic Y (and return) will be considered business travel.

3. An employee takes a car and parks it at the airport and travels interstate, carrying the keys with

him/her. The car, is deemed to be in his/her control and is hence private use. 4. Travel from work to home (and return in the morning or for the regular work hours) will be

considered to be private travel notwithstanding the only reason the employee has the car is that they are on-call or stand-by.

The travel from home to work when a person is called in is only considered to be business travel if the employee commences duty at the time they receive the call. The ATO in a ruling cites as an example a Doctor who is on-call and is called in and commences to issue instructions and “take charge” at the time of receiving the call. This would be business travel. However, if an IT employee is on-call and is called in , and they do not “take charge” until they arrive at the work site, then the travel from home to the work site will be private travel.

5. Where an employee has approval to work at home and has to travel to an office/workplace

which is not his/her place of work then travel from home to the office will be business travel.

If, however, an employee has approval to work at home 4 days out of every week and then attends an office the remaining day of every week then the travel to the office on that one day will be private in nature.

6. The use of a vehicle to make deliveries or collections on the way to or from work is considered

private travel, eg pick-up or drop-off mail or take a vehicle to be cleaned.

To clarify this point further, if an employee performs substantial duties on the way to or from work (for example attends a meeting) rather than just deliveries or collections, the ATO have accepted that the entire journey from home to the meeting and then onto the office will be considered to be business travel. This would also apply to the trip from the office to the place of performance of substantial duties and onto home would also be considered to be business travel.

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This is the case even if the distance travelled does not increase over what would have been the distance travelled if they had travelled directly from home to work.

7. Where an employee takes a vehicle to travel to a country location for work purposes and travel

to a restaurant for dinner would be considered as business travel. 8. Further examples of when taking a vehicle for travel would be considered business travel would

be:

Work to home – when the only reason the car was provided was to enable the employee to use the car for business travel the next day (and the employee does not usually have access to a car).

Home to work – when the only reason the car was provided was to enable the employee to

use the car for business travel and the car is returned the morning after the completion of the business travel (and the employee does not usually have access to a car).

When the employee is considered to be an Itinerant Worker:

Travel is a fundamental part of the employees work;

The employee has no fixed place of work or has a “web” of work places;

The employees work involves continued travel from one work site to another.

A deduction may be allowable for the cost of transport between home and work if an

employee’s home is a base of operations or the transport expenses are attributable to carrying bulky equipment.

There may be uncertainty of location;

Home is a base of operations.

Further clarification for establishing where an employee is an itinerant worker can be gleaned in more exact detail from ATO Taxation Ruling 95/34.

An employee cannot be construed to be itinerant unless they meet all of these requirements.

During a business trip for business related travel, including travel to obtain meals etc.

NOTE - This list is not conclusive and other travel will be considered on the circumstances.

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APPENDIX 1

CRITERIA FOR ASSESSING PURCHASE OF ADDITIONAL OR REPLACEMENT VEHICLES

1. How many kilometres are expected to be travelled annually? On how many days per year and

for how many trips per year might the vehicle be used? On what basis were these assessed? 2. What alternative methods of transport or conveyance have been considered, e.g. public

transport, Government Courier Services, pool vehicles, taxis, hire vehicles? 3. If vehicles are to be used for transportation of documents/materials, has the case been referred

to the Government Courier Service? What was the result? 4. What is the normal load expected to be carried in the vehicle in terms of personnel and

equipment? 5. Is the vehicle to be pooled? 6. If not to be pooled, what areas of work/activities are involved? 7. How regularly will the vehicle be used to convey an officer (or officers) to and/or from home

and workplace? 8. Where is the vehicle to be garaged? 9. If cost savings are submitted as an argument for supply of an additional vehicle or replacement

with a different type of vehicle, consider the following:

current contract price of new vehicle plus any operational accessories required;

will the vehicle be required indefinitely? If not, for how long?

fuel cost based on consumption figures available from Department of Energy and NRMA;

cost of insurance (comprehensive and third party). Fringe Benefits Tax, maintenance

after warranty, e.g. servicing, etc.;

cost of replacement parts outside warranty, e.g. battery, tyres, etc.;

cost of garaging the vehicle -

during working hours; outside working hours;

in the event that the area uses resale value as part of its assessment, the value should be

based on information provided by the Government Supply Department.

(Note: It is the net return, i.e. after sale price less detailing and auction fee which should be compared with replacement cost.)

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10. If the additional or replacement vehicle is required to supplement existing vehicles used in similar circumstances, e.g. pool vehicles, the total distance travelled each year for each existing vehicle should be considered, not the average distance travelled. The number of trips made per year and number of days used per year is also required (for each vehicle) to enable assessment of the correct use of the entire pool.

11. Are private vehicles currently being used and an appropriate kilometrage allowance being paid

in relation to this activity? 12. If yes, what kilometrage has been travelled annually? 13. If no, will private vehicles be utilised with payment of an allowance is an official vehicle is not

provided? 14. If the vehicle is for an existing activity, how was the work for which it is intended carried out

previously? 15. If the additional vehicle is required for a new activity, is relevant policy documentation

available to verify approval of the activity? 16. Have any activities of the organisation been made redundant and, if so, what became of any

vehicles used in connection therewith? 17. When was the last time the organisation reappraised its overall vehicle situation? What

methodology was used? 18. Is the organisation’s funds allocation sufficient to meet purchase and operational costs of

additional or replacement vehicles?

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APPENDIX 2

NEW VEHICLE INSPECTION RECORD

DETAILS Reg. No Make/Model Engine Size - c.c Engine No Chassis No Vehicle replaced Keys (nos.)

CHECK LIST Lights Head Tail Stop Park High/low

beam

Blinkers

Reverse Dash Interior

Other Electrical

Horn Wipers/washers Radio Access Heater/Air cond. fan

Dash warning lights

Mechanical Steering

Footbrake Handbrake Clutch Seat belts

Door/boot locks

Tools Jack Spare wheel

Fluid levels Oil

Brake Battery Radiator W/Washers

General condition

Body Paint Glass Chrome Trim

Vehicle supplied as ordered

Fire extinguisher

Sun visor Weather shield

Mud flaps

Prot. strips

Lock. petrol cap

Other

Road test Engine

Gearbox Brake Clutch Speedo

Blinkers cancel

Remarks

Inspected by:

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APPENDIX 3 MOTOR VEHICLE HISTORY SHEET Registration no Comprehensive insurance Vehicle Third Party insurance Project NRMA no Appropriation no Petrol voucher books Location Purchased Disposed of Month

Speedo reading

Total km.for month

Petrol - litres

Av. Km. Per litre

Insur.

$

Repairs or service including tyres and batteries

Cost of repairs/ service

$

Operating

costs $

Cost per month

$

Total costs

$

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APPENDIX 4

TREASURY CIRCULAR 99/13

ALLOCATION OF POOL CAR FRINGE BENEFITS

Summary: As part of the Commonwealth Government’s overall tax reform program “A New Tax System” amendments were made to the Fringe Benefits Tax (FBT) Act 1986 and the Income Tax Assessment Act 1936 to give effect to the reporting of certain fringe benefits on group certificates. Where a reportable fringe benefit is provided exclusively to a single employee, the allocation of the benefit is straightforward. However, any shared benefit requires special treatment. The allocation of pool cars to the recipients of the benefit raises quite complex issues. Following consultation with major agencies, the attached Policy and Guidelines Paper, Reportable Fringe Benefits Applicable to use of Pool Cars has been developed. This Guide is to be adopted by those agencies lodging their FBT Return through Treasury applicable for the current and subsequent FBT years. This Guide may be adopted by other Government agencies. The policies and procedures established in the Guide are supported by an Add-In Module for the FBT Software implemented for the 1998/99 FBT Annual Return. REPORTABLE FRINGE BENEFITS APPLICABLE TO USE OF POOL CARS - OFFICE OF FINANCIAL MANAGEMENT - POLICY AND GUIDELINES PAPER PREFACE The Policy and Guidelines Paper for Reportable Fringe Benefits Applicable to Use of Pool Cars has been developed to assist agencies in complying with the additional requirements imposed by the Commonwealth for providers and recipients of fringe benefits. The 1999 amendments to the Fringe Benefits Tax (FBT) and Income Tax legislation require that certain reportable fringe benefits amounts must be disclosed on individual employees’ group certificates. The allocation of shared benefits such as pool cars, raises quite complex issues and has been a matter of significant concern to agencies, especially from an industrial relations perspective. The purpose of this Policy and Guidelines Paper is to define a policy for the allocation of shared car benefits to be adopted by those agencies lodging their FBT return through NSW Treasury, applicable for the current and subsequent FBT years. This policy may be adopted by other Government agencies.

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CONTENTS Preface Executive Summary Transferred Vehicles Pool Vehicles Introduction Policy Logbook Records Request Procedure Add-on Software Module Software Procedure Reducing the Allocated Value

Appendices A Cents per kilometre ranges and rates B New minimum standard logbook C Vehicle Request form D Fuel expenses declaration E Sy stem Diagram EXECUTIVE SUMMARY As part of the Commonwealth Government’s overall tax reform program “A New Tax System”, amendments were made to the Fringe Benefits Tax Act 1986 and the Income Tax Assessment Act 1936 to give effect to the reporting of fringe benefits on group certificates. From the year ended 30 June 2000, all employers, including State Government agencies, are required to report the grossed-up taxable value of reportable fringe benefits on the group certificate of each employee whose aggregate taxable value exceeds $1,000. The threshold amount applies to the FBT year 1 April 1999 to 31 March 2000. Where a benefit is provided exclusively to a single employee, the allocation of the benefit is straightforward. However, any shared benefit requires special treatment. The allocation of pool cars to the recipients of the benefit raises quite complex issues and has been a matter of significant concern to agencies, especially from an industrial relations perspective. The recently introduced FBT software provides considerable assistance in complying with this legislative requirement for single user items. Following research of options for the reasonable and equitable sharing of pool cars taxable values, a specific add-on module has been commissioned to provide agencies with an effective and efficient means of complying with the legislative requirement to allocate 100% of the taxable value to recipients of the benefit provided.

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The software initiative supports this Policy and Guidelines Paper, which documents the policy and procedures to be followed by agencies for the allocation of pool car benefits. The complexity of this issue arises from the interaction of the FBT and Income Tax legislation with potential penalties for non-compliance in either regime. The policy to be adopted by NSW Government agencies is based on a cents-per-kilometre allocation throughout the FBT year. At year end, an equalisation factor will be applied to all benefit allocations to eliminate any variance between the amount calculated for pool car benefits in the annual FBT return and the amounts allocated to individual employees. Agencies will find these procedures of benefit as a least cost method of making a ‘fair and reasonable’ allocation of the taxable value of pool cars to recipients of benefits and ensuring the appropriate group certificate disclosure. INTRODUCTION Recent amendments to the Fringe Benefits Tax (FBT) legislation require employers to report the grossed up taxable value of the aggregate fringe benefits provided to each employee or associate of that employee on the employee’s group certificate - where the aggregate taxable value per employee/employer exceeds $1,000. The introduction of FBT software for those agencies lodging their Annual Return through NSW Treasury, has facilitated this process by collating each category of benefit on a per employee basis. However, the allocation of shared benefits to employees raises many issues. The legislation provides little guidance beyond requiring 100 per cent allocation on a ‘fair and reasonable’ basis. The purpose of this Policy and Guidelines Paper is to define a policy for the allocation of shared car benefits to be adopted by those agencies lodging their FBT return through Treasury, applicable for the current and subsequent FBT years. This policy may be adopted by other agencies. Shared car benefits can occur through three fundamental events: 1. Where a packaged vehicle is returned to the agency by one employee and is then transferred

to another employee as part of a package; 2. Where a packaged vehicle is used as a ‘pool’ vehicle by other employees of an agency; 3. Where a ‘pool’ car is provided to two or more employees for intermittent usage which may

have a private use component. In each instance, it is appropriate to ensure the valuation method, which results in the lower tax liability, is used for the Annual FBT Return. This amount is then to be allocated to individual employees.

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Many methods have been advanced to allocate the taxable value of pool cars to individual employees. In some cases methods advanced do not fully allocate the taxable value or allow for unfair allocation results. The taxable value of a shared fringe benefit must be allocated to those employees to whom the benefit has been provided. Thus the appropriate allocation method includes only those employees who have benefited from the use of a car. TRANSFERRED VEHICLES POLICY Car benefits associated with salary packages essentially have a high private use percentage, often 100 percent. The calculation of FBT liability for packaged cars must be based on actual data as distinct from the estimates used in establishing the package. An assumed private/business ratio is not applicable when calculating the taxable value. Actual private/business use must be substantiated by statutory record keeping. Where a vehicle is transferred from one employee to another during the FBT year or transferred between agencies (for example in the case of a restructure) the taxable value must be calculated for the whole year using the valuation method yielding the lower taxable value. The resulting taxable value is then to be allocated based on the individual private use percentage: days available for private use - for statutory formula method; OR private kilometres travelled - for operating cost method.

SOFTWARE PROCEDURE In the agency entity car benefit workpaper, enter one row for each user of the vehicle. If the selected method is statutory formula, enter the days applicable to each user of the vehicle

in the ‘DAYS FOR PRIVATE USE’ column. The software will then calculate separate components of the taxable value, equal to the total had there been only one user of the vehicle.

If the selected method is operating cost, pro-rata the private kilometres travelled between the

users of the vehicle, based on the odometer readings applicable to each user and the log of business kilometres provided by that user.

Note: the correct ratio equals (private kilometres of individual) / (total kilometres of vehicle) This process will result in the same aggregate taxable value for the shared benefits that would have resulted from a single entry for the vehicle.

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Total kilometres =

20,000 private

9,000

User A (1/4 - 30/11)

12,000

5,000

User B (1/12 - 31/3)

8,000

4,000

Total costs = 3,132.66

Taxable value

1,409.70

User A (3132.66 * 0.25)

783.17

Example:

User B (3132.66 * 0.2)

626.53

Note: the correct ratio equals (private kilometres of individual) / (total kilometres of vehicle). This process will result in the same aggregate taxable value for the shared benefits that would have resulted from a single entry for the vehicle. Remember that all agencies lodging return with NSW Treasury are part of the same employer. Therefore if vehicle moves between agency only one annual value should be calculated. POOL VEHICLES INTRODUCTION Where an agency holds a motor vehicle that is a car for FBT purposes, and that vehicle is used as a ‘pool car’ the fringe benefits tax legislation requires that the ‘Shares of different employees must total 100% of taxable value’. Subsection 5F (5) states: If: a. the fringe benefit was provided in respect of the employment of 2 or more employees; and b. each of those employees has an employee’s share of the taxable value of the fringe benefit; the sum of those shares must equal the taxable value of the fringe benefit. Where the agency uses a packaged vehicle as a pool car during the day, it is assumed that any such use should be business. This would align with the business/private split concept used in estimating the salary package. However, if the vehicle is used by another employee overnight, there would be a private benefit to be allocated. The frequency of use by alternate employees would define the method of allocation. For one off occurrences, the method described under TRANSFERRED VEHICLES should be used. For multiple occurrences/users the method described below for POOL VEHICLES should be applied. The policy and procedures prescribed below generally refer to a pool of cars held by an agency which are not allocated to an individual employee. They also apply to packaged vehicles used as pool cars, where there is significant private use by alternate employees.

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The ATO have recently confirmed that it will accept that 100% of the total taxable value of the ‘pool of cars’ being attributed between the various recipients of car benefits provided by an agency to its employees. This is significant because in many government agencies, an individual employee may access a wide range of vehicles during the FBT year. Allocating proportional shares of individual employee usages of many vehicles becomes more manageable if the requirement to allocate 100% of the taxable value of the benefits provided applies to the total pool rather than each vehicle. While generally the Operating Cost method (which relates only to private kilometres travelled) is expected to yield the lower taxable value and allocation to employees, the Statutory Formula method may yield a lower taxable value where total kilometres travelled is high, say over 40,000. However, the Statutory Formula method results in higher allocation to employees because under this method two day’s benefits are deemed to be provided when the vehicle is parked overnight at or near the employee’s residence, even where no private kilometres are travelled. Given the emphasis placed on allocating pool car benefits to employees, each agency must record detailed log entries to enable this requirement to be met. This greater emphasis on keeping log book records necessarily implies that the Operating Cost method can be calculated for every vehicle. POLICY For each pool car, the taxable value on which the agency pays fringe benefits tax must be calculated for the whole year using the valuation method yielding the lower taxable value. In the case of pool cars, private usage per employee will be allocated on the basis of private kilometres travelled, using a separate software procedure. The rate per kilometre will vary across a range based on vehicle size, defined from time to time by schedule. See Appendix 4.1. As application of such a method would not precisely allocate 100% of the taxable value, the variance at year end, increase or decrease, will form the basis of an equalisation factor to be applied to all benefit allocations. Data is to be collected on private kilometres and days available for private use in the short term. While some consideration must be had for allocating according to the method adopted for the annual return, this concept is rejected on the basis of the differential treatment of employees between methods. Even where the Statutory Formula method yields a lower taxable value, this can only reduce the total allocation across all employees under a cents per kilometre basis, rather than incurring a benefit where an employee takes a vehicle home but no private kilometres are travelled. The content and maintenance of logbook recordings are essential aspects to full compliance with legislative requirements and to ensuring that a reasonable and equitable allocation of benefits across recipient employees is achieved. LOGBOOK RECORDS For FBT years up to and including 31 March 1999, the ATO’s view was that logbook records must include the following details for each business journey: the date(s) on which the journey began and ended; the odometer readings at the start and end of each journey; the kilometres travelled; the purpose of the journey.

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The standard logbook in your Fringe Benefits Tax Manual has no scope to record details of private journeys. For years 1 April 1999 to 31 March 2000 and forward, the standard logbook format will be expanded and must include the following additional information:

days available for private use private kilometres business kilometres, and the purpose of the journey will relate to the business journey.

It may be appropriate also to have some form of coded entry for regular forms of business travel, to maintain a single page logbook. Once the software is implemented, monthly entry of logbook records is required. The new minimum standard logbook is at Appendix 4.2. It is imperative that accurate and complete logbook records in a consistent format are maintained to substantiate the procedures adopted. Failure to do so will incur additional tax liability for the agency and increased allocation to group certificates for the employee. REQUEST PROCEDURE The legislative requirement for disclosure of reportable fringe benefits on employees’ group certificates places additional significance in fully documenting the process of usage of pool cars. All agencies are required to have a Vehicle Request procedure in place to regulate access to pool cars. A sample Vehicle Request form is provided at Appendix 4.3. This form is the basis of an agreement between the employer and employee regarding each use of a pool car and ensures the employee acknowledges the potential group certificate impact of using a pool car. ADD-ON SOFTWARE MODULE To facilitate an efficient and effective allocation of pool car usage, a specific module has been developed as an add-on for the FBT Software implemented in the 1998/99 FBT year. This module is to record each usage incident. The module allows each employee usage of each pool vehicle to be aggregated and valued progressively through the FBT year. The value allocated during the year is based on a cents-per-kilometre rate and accordingly is only indicative of the final value for the FBT year. However, the reporting facility will allow year to date values to be provided to employees. Agencies will also be able to obtain progress reports to assist in managing some aspects of pool car usage. Assigning cents-per-kilometre values to usage in this manner cannot precisely allocate 100% of the actual taxable value of the pool cars. On an annual basis, an equalisation factor is to be applied across all benefit allocations. The equalisation factor is derived from the year-end variance between total taxable value for the pool cars and total allocated to employees, increase or decrease.

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While FBT Simplifier maintains the ability to produce a single grossed-up taxable value per employee for group certificate reporting purposes, the pool car data is recorded and processed under a separate “pool car entity” inside the existing software and a “pool car calculator” sitting outside Simplifier. The employee and vehicle data may be imported to the add-on module or entered manually. Usage incident data is entered via a dialog box as below. In some agencies, it is anticipated that there will be a very large volume of data to be entered in this new module. A copy of the external software module can be distributed to the fleet administration area for input of logged usage and later imported back to the main system. This does not constitute an additional ‘entity’ for licence agreement purposes. SOFTWARE PROCEDURE When first accessing the Pool Car Module, additional set up procedures are required. With the original implementation of FBT Simplifier, users established each entity they required by importing the ‘treasury.fbt’ entity - not adding a new entity. This entity is a template with specific public sector customisation. In the same way users will need to import an additional entity for each existing entity using the template ‘poolcar.fbt’, naming the pairs of entities appropriately to allow ease of identification. From this point, all benefit categories, except for pool cars, will be entered into the major entity. Pool car details for calculating each car’s taxable value and grossed-up taxable value will be entered into the pool car entity. The external Pool Car Calculator is set up using the following functions: 1. im port/add employees 2. im port/add cars 3. set up vehicle categories 4. assign a category to each car.

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Pool car usage is entered through the dialog box shown on page xx. Usage details required include: Employee identity (can be selected from drop down list) Car registration No. (can be selected from drop down list) Assign the dates over which the employee has use of the car Enter private kilometres travelled and private use days from logbooks. An additional function will accommodate entering employee contributions to reduce the taxable value recorded. As indicated, the external Pool Car Calculator can be distributed to fleet operations in several locations. The data from distributed regions can then be consolidated into the Pool Car Calculator at the agency’s head office. Year end reporting requires three steps as follows: 1. At the end of the year (or whenever reporting is required) the pooled car entity is activated

and the “Total Pool Data” report selected from the standard reports in the car workpaper. The output data is then fed into the Pool Car Calculator.

2. In the Pool Car Calculator, the “Create FBT Simplifier report” option is selected and data

from step 1 entered. A file will be created for importing in the next step. 3. In the Major entity, import the file created in step 2. From this entity the FBT Return and the

Report file for export to Payroll can be produced. Interim reporting can be obtained in the Pool Car Calculator for private kilometres and values per car/per employee. REDUCING THE ALLOCATED VALUE The legislative amendments requiring employers to report the grossed up taxable value of benefits provided, on an employee’s group certificate will impact each employee differently depending on his/her personal circumstances. Where an employee is likely to be adversely affected by the reportable fringe benefit amount on his/her group certificate, one avenue available to reduce the taxable value of the benefit, especially car benefits, is to make an employee contribution out of after tax dollars towards the running costs of the vehicle. A ‘recipients contribution’ is defined in the Act, in relation to a range of benefit types, to mean the amount of any consideration paid to the provider or to the employer by the recipient or by the employee in respect of the provision of the recipients benefit, reduced by the amount of any reimbursement paid to the recipient in respect of that consideration.

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This means that should an employee make a cash contribution, or pay for some of the costs associated with running the vehicle, for example petrol, tyres, etc, provided the employee is not reimbursed for these costs, the contribution can be deducted from the taxable value of the specific benefit provided to that employee. The employee must supply documentary evidence of the expenditure, such as a receipt, to the employer. In the case of petrol and oil costs a declaration from the employee will be sufficient for this purpose. An approved format for this declaration is provided at Appendix 4.4. Note: A recipient’s contribution must be out of after-tax dollars. Therefore, the FBT salary sacrifice amount included in packaged arrangements is NOT an employee contribution because it is paid out of pre-tax dollars.

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APPENDIX 4.1 In arriving at a cents-per-kilometre rate for a range of vehicles, reference was made to the rates applied by the ATO in allowing deductions to taxpayers, and the rates applicable to public sector package arrangements. A mean position has been adopted with consideration for simplicity of application.

Category 1

4 Cylinder Cars

30 cents per kilometre

Category 2

6 Cylinder Cars


Category 3

8 Cylinder Cars 4WD - 1 Executive Cars


Category 4

4WD - 2


As indicated in the policy document, these rates are set to give an indicative value to pool car usage. Applying a range of rates across various capacity of vehicles is in line with ATO expectations. At year end the application of an equalisation factor will adjust the benefit allocations to reflect a 100 per cent allocation of the total pool value to recipients of benefits.

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APPENDIX 4.2

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APPENDIX 4.3 VEHICLE REQUEST FORM - page 1 I request the use of a departmental motor vehicle to undertake official duties in behalf of

(AGENCY NAME) Driver Details:

(COST CENTRE)

(NAME) (PHONE) REQUIRED FROM - time am/pm - date

UNTIL - time am/pm - date Official duties

(DESTINATION) Call-out/Stand-by Duties

(DESTINATION) Employee Certification I am aware of and agree to abide by departmental policy in regard to overnight use of this vehicle. I am aware that by taking a vehicle overnight that the FBT payable for this trip will be recorded by Administration Services against my name and may also be recorded on my group certificate. I hold a current motor vehicle driver’s licence. The vehicle will be used for official departmental use only. The vehicle will only be driven by the nominated officer. All necessary steps will be taken to protect the vehicle from damage and theft. Any variation to details in this request form will be reported to Administration Services as soon as possible.

Employee’s signature Date Manager’s Approval I certify that this Motor Vehicle request is for official business only and the information contained herein is accurate.

Manager’s signature Date

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APPENDIX 4.4

Fuel expenses declaration

I, declare that

(Employee’s full name)

expenses of $ (amount in figures)

were incurred by me during the period from ....../....../ in respect of registration number Signed Date

If the employee is responsible for all fuel and/or oil costs, a declaration based on a reasonable estimate derived from the total kilometres travelled, average fuel costs and fuel consumption will be acceptable. In these cases the declaration should be extended as follows:

I also declare that the total kilometres travelled during the period was

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TABLE OF CONTENTS

CHAPTER 7 – RECEIPT, CUSTODY, AND ISSUE OF STORES 7.0 Introduction .............................................................................................................. 7.1 7.1 Inspection prior to unloading ................................................................................... 7.1 7.2 Unloading ................................................................................................................. 7.1 7.3 Inspection after unloading........................................................................................ 7.1 7.4 Receipt .................................................................................................................... 7.2 7.5 Receiving of Sterile Consumables ........................................................................... 7.3 7.6 Pharm aceuticals ....................................................................................................... 7.3 7.7 Perishable ................................................................................................................. 7.4 7.8 Equipm ent ................................................................................................................ 7.4 7.9 Consignm ent/Loan Stock......................................................................................... 7.4 7.10 Goods Found Damaged After Acceptance............................................................... 7.6 7.11 Short or Incorrect Supply......................................................................................... 7.6 7.12 Sy stem Receipt ........................................................................................................ 7.7 7.13 Storage .................................................................................................................... 7.7

7.13.1 Warehouse ............................................................................................... 7.7 7.13.2 Stock Rotation.......................................................................................... 7.7 7.13.3 Stock Level............................................................................................... 7.8

7.14 Environment – Warehouse ...................................................................................... 7.8 7.14.1 Receiving Dock ........................................................................................ 7.8 7.14.2 Receiving Dock Signage .......................................................................... 7.8 7.14.3 Storage Area............................................................................................ 7.8 7.14.4 Storage Area Signage .............................................................................. 7.8 7.14.5 Floors Storage Area Signage .................................................................. 7.9 7.14.6 Containers ............................................................................................... 7.9 7.14.7 Shelving ................................................................................................... 7.9

7.15 Environment – Hospital Ward................................................................................. 7.9 7.15.1 Storage facilities ...................................................................................... 7.9 7.15.2 Containers and Shelves ........................................................................... 7.10

7.16 Returns .................................................................................................................... 7.10 7.17 Issue of Stores.......................................................................................................... 7.11

7.17.1 General issuing arrangements................................................................. 7.11 7.17.2 Picking..................................................................................................... 7.11 7.17.3 Issue of Stores Which May be Harmful ................................................... 7.12 7.17.4 Issue of Sterile Stores through Community Nurses ................................. 7.12 7.17.5 Issue of Sterile Stores Directly by Company Representations................. 7.13 7.17.6 Issue of Sterile Stores by Engaging Courier Services ............................. 7.13 7.17.7 Issue of Uniforms and Protective Clothing ............................................. 7.13 7.17.8 Materials Safety Data Sheets................................................................... 7.14

7.18 Delivery ................................................................................................................... 7.14 7.18.1 Transportation ......................................................................................... 7.14 7.18.2 Containers and Trolleys .......................................................................... 7.14 7.18.3 Condition of Equipment........................................................................... 7.14 7.18.4 Outer Shippers......................................................................................... 7.15 7.18.5 Small Packages........................................................................................ 7.15 7.18.6 Vehicle Conditions................................................................................... 7.15 7.18.7 Sterile Consumables in Transport ........................................................... 7.15

7.19 Occupational Health & Safety................................................................................. 7.15 7.20 Security .................................................................................................................... 7.16

7.20.1 Access to the Warehouse ......................................................................... 7.16 7.20.2 In and Around the Warehouse ................................................................. 7.16

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7.20.3 Protecting People and Property Manual................................................. 7.16 7.21 Reporting ................................................................................................................. 7.17 7.22 Asset Register.......................................................................................................... 7.18 7.23 Receipt of Goods and Services – Tasks, Risks and Controls .................................. 7.19

7.23.1 Task: To ensure that services and materials received and related information are processed and promptly made available to appropriate sections or stores ............................................. 7.19

7.23.2 Task: To ensure purchase or service orders not filled on a timely basis are investigated. ............................................................................. 7.19

7.23.3 Task: To completely and accurately document goods received and goods returned.................................................................................. 7.20

7.23.4 Task: To accept only items or services that were properly ordered....... 7.20 7.23.5 Task: To accept only services and materials that meet purchase order

specifications ........................................................................................... 7.20 7.23.6 Task: To ensure that all materials transferred from the

receiving activity to other activities are recorded ................................... 7.20 7.23.7 Task: To safeguard goods received. ....................................................... 7.21 7.23.8 Task: To ensure that vendor, inventory and purchase

order information is accurately updated to reflect receipts .................... 7.21 7.23.9 Task: Notify service providers promptly of substandard

performance or return rejected items promptly....................................... 7.21 7.23.10 Task: Completely and accurately document all transfers

to and from storage.................................................................................. 7.22 7.23.11 Task: Appropriately requisition all goods to be transferred .................. 7.22 7.23.12 Task: Maintaining safe working conditions and storage of

hazardous materials ................................................................................ 7.22 7.24 Stock Balances......................................................................................................... 7.23

7.24.1 Internal Spot check of Stock Balances..................................................... 7.23 7.24.2 Stocktaking .............................................................................................. 7.23 7.24.3 Certification of the existence and good order and condition

of all stock held........................................................................................ 7.23 7.25 Recommended Receipt of Stores Flow Chart .......................................................... 7.25 7.26 Guidelines for Consignment Stock .......................................................................... 7.26

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7.0 Introduction Included in this section are policies and procedures to be followed in the receipt and issue of stores procured by facilities. A Recommended Receipt of Stores Flow Chart based on these policies and procedures is provided at Section 7.25. Of particular note for all staff are the control tasks and risks associated with receipt of stores as detailed at Section 7.23 Receipt of Goods and Services – Tasks, Risks and Controls. 7.1 Inspection prior to unloading Prior to unloading, all goods are to be inspected to ensure integrity and condition of shipper/cartons by: a) Checking for watermarks and carton swelling which could indicate that a non-waterproof

container has been wet; b) Checking the package seals of sterile consumables to ensure that the seals are intact and the

contents not contaminated; and c) Close inspection of all goods if there is reason to suspect that transport was unsatisfactory. Goods are to be rejected if they do not satisfy this inspection. If goods are rejected then: d) Evidence is to be gathered to support findings, and e) Delivery dockets are to be noted with findings. In accepting or rejecting goods, care should be taken during their inspection since damaged or contaminated goods and packages may create an occupational health and safety issue. 7.2 Unloading During unloading: a) proper unloading mechanisms must be used in line with Occupational Health & Safety

guidelines applying to or applied within the Public Health Organisation; b) documentation and containers should be checked thoroughly to ensure items/cartons listed on

the acknowledgement of receipt correspond with those actually received; c) the form of receipt should be endorsed appropriately (e.g. one carton damaged – subject to

check) if the packages were damaged in transit but not rejected (see 7.1 Inspection prior to unloading); and

d) any differences between documentation and goods delivered or indications of damage to those goods should be brought to the attention of the appropriate officer.

7.3 Inspection after unloading After unloading goods are to be: e) segregated into appropriate categories, e.g. general, sterile, chemicals, perishables, etc; f) placed in a manner that ensures safe processing and avoids cross-contamination: and

• off the ground; • on a dedicated clean pallet; or • on a dedicated clean trolley; or • on racking.


c) the goods are sterile consumables, treated as provided in the Guidelines for Storage and

Handling of Sterile Consumables (available at http://www.hp.health.nsw.gov.au - for further details see the note immediately below).

Note: The Guidelines for Storage and Handling of Sterile Consumables provides detailed information concerning the storage of sterile consumables. This document reflects the coordinated efforts of the NSW Health Working Party for the Implementation of Section 9 - Australian/New Zealand Standards 4187 (AS/NZ 4187). It is intended that these guidelines be adopted uniformly, however, it is understood that some requirements may not be immediately achievable. Therefore, it is highly recommended that this document be utilised as a guide by those responsible for the handling and storage of sterile consumables to work towards compliance with AS/NZ 4187, specifically Section 9.

d) the goods have been damaged, placed in a separate area (ie quarantine) and their condition

reported to an appropriate officer, the officer is to:

• examine the condition of the damaged goods; • contact the Supplier and determine appropriate action;

• gather and document evidence (eg register onto NSW Health Procurement (HP) Quality

Reporting System); • notify the customer and/or the Purchasing Department of the outcome of these actions,

i.e. replacement or re-order; and • monitor progress until matter is resolved.

7.4 Receipt Receipt of Mixed Clinical Items When a variety of clinical items are ordered and delivered in a single container, e.g. box or carton, the container should be clearly marked to indicate the mixture. Physical Receipt - Following the Initial Inspection Following the initial inspection, the items are: a) unloaded and placed in appropriate holding areas, e.g. sterile or chemical; b) matched against the attached paperwork (eg the delivery Docket); c) checked in detail to ensure that the quantity and description match those recorded on the

Delivery Docket or form of receipt and Official Order (this checking usually requires boxes/cartons/packages to be opened and the contents individually checked); and

d) Identified as Stock or Non-stock. Stock Item (Goods stored in the Warehouse) - Following identification as Stock Item If items are identified as Stock Items then the: e) item location in the warehouse is noted from the Official Order or Computer System; f) item is physically transferred into that location within the warehouse; g) officer accepting the items records that the quantity has been received, signs the paperwork and

returns the paperwork to the “Receivals Area”; and h) details of the receipt are recorded in the appropriate Computer System.

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Non-stock Item (All other goods received but not stocked in the Warehouse) If items are identified as Non-Stock Items then: q) the Recipient/Cost Centre is identified from the Official Order; r) the details of the receipt are recorded in the appropriate Computer System and delivery

paperwork printed; s) pending delivery to the appropriate site the items are quarantined by the type, e.g. sterile,

chemicals, and pharmaceuticals, with Computer System delivery paperwork attached; t) the item is delivered to Recipient/Cost Centre; u) the delivery paperwork is signed as received by an authorised person in the Dept/Cost Centre; v) the signed copy is returned to warehouse to be utilised for confirmation of receipt and filing;

and w) after identification, the pharmaceuticals are to be immediately transferred to the Pharmacy or

other designated Pharmaceuticals storage area (see section 7.6 Pharmaceutical). 7.5 Receiving of Sterile Consumables Sterile consumables are to be separated from used linen, garbage and other perishable consumables. The following areas are to be established if space is available: x) an inspection area - a space dedicated for inspections to check the condition of deliveries prior

to unloading, e.g. to check the integrity and condition of boxes, subject to the notes immediately below:

Notes:

i) If sterile consumables are delivered with excessive dust or dirt on the containers, these

consumables are to be rejected and the supplier notified. ii) Stores/warehouse personnel should avoid damaging inner packaging that maintains the

sterile status of sterile consumables, eg when using Stanley knives to open packaging. iii) Inspection should be conducted in such a way that, if damage exists, cross contamination

is prevented. b) a temporary storage area - a space in or adjacent to receiving areas for the temporary storage of

received sterile consumables whilst they are recorded, examined and when necessary, externally cleaned; and

c) a quarantine area - a space dedicated as a quarantine area to separate damaged consumables

where possible that will enable the isolation of all faulty/damaged sterile consumables. The quarantine area is to be signed as such and have a simple visible demarcation line if possible, e.g. painted lines on floor.

7.6 Pharmaceutical Managers responsible for pharmaceuticals must ensure that: d) an Authorised Person takes receipt of delivery from the Supplier; e) the Authorised Person ensures that all drug deliveries are accompanied by an invoice or

delivery advice and the goods received are checked against both the facility order form and delivery documentation by name and quantity (to ensure the received pharmaceuticals were actually ordered);

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23(9/08)

f) a record system that is compliant with PD2007_077 Policy On The Handling of Medication In

New South Wales Public Hospitals is maintained for all pharmaceuticals received by the pharmacy and that any deficiencies in the Schedule 8 and Schedule 4 Appendix D drugs register are reported in accordance with that Policy Directive; and

g) orders for drugs of addiction are signed by:

• a pharmacist who is employed at the hospital and countersigned by the chief pharmacist of the hospital or his or her nominee who is a pharmacist employed at the hospital, or

if only one pharmacist is employed; • the pharmacist who is employed at the hospital and countersigned by either the chief

nurse or the medical superintendent of the hospital, whoever is determined to have this responsibility by the hospital’s chief executive; or

if no pharmacist is employed; • a registered nurse in charge of a ward of the hospital and countersigned by either the

chief nurse or the medical superintendent of the hospital, whoever is determined to have this responsibility by the hospital’s chief executive.”

7.7 Perishable Authorised Personnel: h) take receipt of delivery of perishable stores from Supplier; i) check all items listed on the delivery documentation against goods received; and j) store the perishables into proper location/storage. 7.8 Equipment Authorised Personnel: k) take receipt of delivery of equipment from Supplier; l) check all items listed on the delivery documentation against goods received; and m) deliver equipment from receiving dock department in original packaging (where possible). If equipment is delivered direct to site for installation or weight/size reasons, the project manager or department head responsible for the equipment: n) Takes responsibility for correct delivery and sign delivery paperwork to be returned to

receiving dock; and o) If necessary calls for an expert technician to carry out installation and testing. 7.9 Consignment/Loan Stock (see Guidelines at Supplement 1) Consignment (ie loan) stock may only be accepted if the stock is under an appropriately signed and stamped written Agreement between the supplier (the consignor) and the Public Health Organisation. The Public Health Organisation supply manager and the manager of the unit wanting the supply should both sign the Agreement unless the Agreement is signed at a higher level. A copy of the Agreement should be available to staff receiving the stock.


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The Agreement must in relation to stock levels: (a) specify the level of stock of the consignment and its maintenance, eg by written imprest

schedules that that may be changed by written agreement the Public Health Organisation and the supplier;

(b) specify the period of retention of the consignment stock; (c) specify the storage conditions, e.g. in a clean and secure environment , and as set out on

product packaging; (d) specify how the supplier is be notified of the use or sale of any consignment stock, eg within 48

hours by an official purchase order for that used stock; (e) specify arrangements in relation to ordering or returning goods; (f) specify the responsibility of the Public Health Organisation for stock shortages, e.g. that it is to

be charged for all such shortages at the agreed list price of the date on which the storage is notified; and

(g) specify that the consignment stock remains the property of the supplier and shall be insured by

the supplier; in relation to inspections (h) specify the right of the supplier to regularly audit consignment stock with oversight by an

authorised officer(s) of the Public Health Organisation; (i) specify that the Public Health Organisation shall allow the supplier’s insurance

representative(s) to make inspections, oversighted by an authorised officer(s) of the Public Health Organisation; and

(j) specify that the Public Health Organisation may not accept goods it would not accept following

inspections if it were buying directly, eg damaged or old goods, damaged packages, as provided in sections 7.1 Inspection prior to unloading, 7.2 Unloading and 7.3 Inspection after unloading;

in relation to indemnities (k) specify that the supplier indemnifies the Public Health Organisation and the NSW Department

of Health (under a continuing indemnity that shall survive the termination of the Agreement) against liability, loss, damage, cost, expense or tax incurred in connection with or suffered by the supplier as a result of loss, damage, etc. to consignment stock;

in relation to termination (l) specify that the supplier shall have the right to withdraw any consignment stock at any time, 7

days after written notification is provided to the Public Health Organisation’s Authorised officer; and

(m) specify that the supplier may terminate the consignment arrangement at any time;

CHAPTER 7 – RECEIPT, CUSTODY AND DELIVERY OF STORES 7.6 in relation to stocktakes (n) specify the manner of stocktakes, eg that Authorised Personnel of the Public Health

Organisation and the supplier shall conduct stocktakes of consignment stocks at least three times per annum, with stocktake counts being notified to the other party and any discrepancies resolved by recount and/or by implementation of relevant terms and conditions of the Agreement.

The receiving Authorised Personnel (e.g. Supply Manager) must: (a) take receipt of directly delivered consignment stock from the supplier; (b) check all items listed on the delivery documentation against goods received; (c) document used items, then invoice and arrange replacement by the supplier, or invoice and

arrange the return of unused items to the supplier (Specific arrangements may vary at each site - refer note at the end of section 7.9 Consignment/Loan Stock); and

(d) ensure that the goods are accepted and treated within the terms of the Agreement. The Public Health Organisation must take responsibility for the application of terms and conditions of consignment Agreements in the supply of stores. Note: Procedures for the receipt of consignment and sterile loan stock may vary and are currently dependent on individual “Public Health Facilities” guidelines and policies, existing structures and arrangement/agreement with Suppliers. 7.10 Goods Found Damaged After Acceptance When a carton, package, etc which on receipt appears to be undamaged is opened and found to have damaged contents, the Authorised Personnel is to: (a) examine the package and contents for evidence to identify how damage may have occurred; (b) docum ent evidence; (c) hold package pending further investigation (sterile consumables are to be quarantined); (d) report to the appropriate officer; and (e) advise supplier of details. Follow-up actions may include:

(a) further documentation of evidence (eg register onto the HP Health Quality Reporting System); (b) notification to the customer and/or the Purchasing Department of outcome, i.e. replacement or

re-order; and (c) monitoring of progress until matter is resolved. 7.11 Short or Incorrect Supply When delivery is incorrect: (a) docum ent evidence; (b) report to the appropriate officer; (c) advise supplier of details;

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(d) hold package pending further investigation (sterile/patient consumables are to be quarantined); and

(e) hold and wait for the replacement or the balance of the short supply or its return as per supplier instructions.

7.12 System Receipt Receipts are to be: (a) entered into material management systems according to existing Public Health system

protocols; and (b) if bar code receipts, processed according to existing Public Health barcode systems. 7.13 Storage 7.13.1 Warehouse Goods received into a warehouse shall: (a) be stored off the ground; (b) be stored in a dust-controlled environment at health care facilities; and if sterile consumables, (a) be stored under the higher standards discussed in the Guidelines for Storage and Handling of

Sterile Consumables. Further information on this Guideline is available as a note to section 7.3.d of this document.

In “Hospital Wards” & “Community Nurse Vehicles” goods are to be: (a) stored according to manufacturer’s storage recommendations; and if sterile consumables, (a) stored under the higher standards discussed in the Guidelines for Storage and Handling of

Sterile Consumables. Further information on this Guideline is available as a note to section 7.3.c Inspection after Unloading.

7.13.2 Stock Rotation Stock is to be rotated: (a) on a “first in first out basis” to ensure stock held does not reach “use by” or “expiry date”

limits; and if sterile consumables (a) in accordance with AS/NZ 4187 – Section 9 (For further information on this standard see 7.3.c

Inspection after Unloading.


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7.13.3 Stock Level Stock levels are to be constantly monitored and revised as required to prevent overstocking, stock shortages or obsolescence. 7.14 Environment – Warehouse 7.14.1 Receiving Dock The following conditions must apply at receiving docks: (a) docks are to be undercover, protected from all weather conditions, kept clean and maintained in

such a way as to protect deliveries from all possible elements that may the integrity of deliveries; and

(b) receiving of sterile and patient care consumables must be separate from used linen, garbage and other perishable consumables. Dedicated areas for segregation of goods shall be allocated (where space is available). Such areas must be clearly marked and maintained according to standards. (For further information, refer to the Guidelines for Storage and Handling of Sterile Consumables. Further information on this Guideline is available as a note to section 7.3.d of this document.)

7.14.2 Receiving Dock Signage So that all goods are delivered and received intact and undamaged, and to reduce the incidence of incorrect deliveries, ensure that there are: (a) notices on the dock area about delivery and receipt times, including direction boards/arrows

addressing access throughout the site; (b) clear warning(s) discouraging the leaving/dumping of deliveries without proper receiving by

stores/warehouse personnel; (c) clear statement(s) waiving responsibilities for dumped deliveries and the consequences; and (d) clear notice(s) for delivery vehicle engines to be turned off immediately upon arrival at the

receiving dock area. 7.14.3 Storage Area The storage area is: (a) to protect goods from (or minimise exposure to) dust, dirt, rain, direct sunlight, extreme heat

conditions, e.g. such as caused by direct sunlight, electrical motors or air conditioning units; (b) to be kept free from insects and vermin; (c) if space is available, to provide for the separation of sterile items from non-sterile items; and (d) to be arranged so that goods are stored off the ground, preferably on dedicated clean pallets or

racking. 7.14.4 Storage Area Signage Shelves are to be: (a) clearly marked with goods details/barcode labels to promote easy/accurate picking and

eliminate unnecessary handling or wrong picking.


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7.14.5 Floors Storage Area Signage Floors are to be: (a) kept clean and tidy on a daily basis; and. (b) filter vacuumed or damp mopped. Note: the use of brooms or blowers are to be discouraged as their use spreads dust in the warehouse. 7.14.6 Containers To reduce the risk of contamination: (a) cartons/shipper packaging are to be in a clean undamaged state prior to delivery to the ward

area; (b) inner cartons when used for dispensing in the ward area should be discarded when empty and

not refilled; and (c) outer cartons/shippers should not be used for dispensing individual items since they are a

source of contamination. 7.14.7 Shelving To ensure safety, accessibility and maintenance of goods in usable condition: (a) shelves should be regularly maintained to ensure that dust and other materials/elements that

may affect goods integrity are minimised; (b) if available, shelves to be used should be open freestanding racks with walkways of sufficient

width between them, to enable stores/warehouse personnel to move freely between racks to enable stacking and picking;

(c) if available, racking/shelves to be used are in good condition and burr free; (d) if available, racking/shelves should keep sterile consumables off the ground and not too close to

the ceiling, i.e. 250 mm off the ground and 440 mm from the ceiling; and (e) if possible, when shelving needs replacement, they be replaced with open dust-free

shelves/baskets. Note: the use of dusters is to be discouraged since dusters spread dust through the warehouse. 7.15 Environment - Hospital Ward 7.15.1 Storage facilities Storage facilities in the hospital ward environment should: (a) be specifically dedicated for patient supplies only and not located with cleaning materials or

food items or adjacent to a hand basin; (b) be temperature and humidity controlled to maintain the internal environment, i.e. well

ventilated and with a constant temperature of between 22 degrees to 24 degrees Celsius, with relative humidity from 35% to 68% (advise should be sought if temperature ranges falls under and/or exceed the recommended range.);


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(c) have the temperature in the Ward storage area regularly monitored; (d) have sealed windows (ie cannot be opened) and tinted to block direct sunlight on consumable

items; (e) have lighting flush with the ceiling to prevent accumulation of dust wherever possible; and (f) be arranged so that sterile and non-sterile consumables are kept separated (although they may

be stored within the one area). 7.15.2 Containers and Shelves To ensure safety, accessibility and maintenance of goods in usable condition: (a) containers should be made of a non-porous smooth surface material able to withstand regular

washing; (b) storage shelves and bins should be at a minimum of 250mm from the floor and 440 mm from

the ceiling; (c) if more than one type of item is kept in one container, appropriate dividers must be utilised; and (d) inner cartons when used for dispensing in the ward area should be discarded when empty and

not refilled. Responsibility for storage bins, containers and shelving should be clearly identified to ensure: (a) regular cleaning of bins; (b) rotation of sterile consumables; and (c) regulation of supply quantities and identification of slow moving, out of date or damaged sterile

consumables. 7.16 Returns (a) Return of Goods Official Notice or approved Request to Return to Stores/Warehouse Document is to be forwarded to the stores department prior to or with the return of goods. An authorised stores/warehouse officer is to review and accept or reject the return according to the Notice or Document. If approved the MMS is to be updated accordingly. (b) Return of Sterile Consumables Returned sterile consumables must be in original unopened packaging and clearly displaying manufacture dates with no evidence of exposure to adverse conditions. Previous storage and handling condition of the returned sterile consumables is to be established prior to acceptance. (c) Quarantine Area Returned sterile consumables are to be kept in a quarantine area until inspected or approved for return/credit by the authorised Stores Officer.


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7.17 Issue Of Stores 7.17.1 General issuing arrangements When issuing stores: (a) a correctly approved requisition or appropriate picking slip should be obtained for all stores

issued (irrespective of whether the stores are issued directly after receipt from supplier or from stock);

(b) details of all issues from stock should be entered onto the MMS. (c) restricted substances, including drugs of addiction, should be correctly accounted for as

required by the Poisons and Therapeutic Goods Act 1966 and regulations. In particular, a person who has possession of drugs of addiction at any place must keep a separate register (a “drug register”) at that place. The drug register is to be in the form of a book whose pages are consecutively numbered, are so bound that they cannot be removed or replaced without trace, and contain provision for the inclusion of the particulars required to be entered in it. Separate pages of the register must be used for each drug of addiction, and for each form and strength of the drug. For drugs of addiction, these conditions are met generally by the use of Form 8 books and, within wards, Form 9 books to record receipt and issue of those drugs.

Note: clause 5.8 of the Accounts and Audit Determination provides further information concerning stores. 7.17.2 Picking Picking should be conducted under suitable conditions. In particular: (a) picking areas are to be kept clean, dust and draught minimized; (b) picking spaces should be adequate and organised to permit suitable and effective picking,

separation, identification and repacking; (c) picking procedures should be documented for:

• the utilisation of clear plastic bags and other accessories used in picking (e.g. sealed/labelled/labelled sterile stock);

• the regular cleaning of picking equipment, i.e. containers, trolleys, shelves, etc. Containers should be cleaned and dried before every use;

• separate picking and packing of sterile consumables. Picking slips are produced via the Material Management System (MMS). This automated system usually produces picking lists that separate sterile from non-sterile consumables and/or orders items according to item locations. (a) Stores personnel are to pick the correct items/correct quantity of items from the storage

locations in the order as listed on the picking slip (Where possible a double-checking mechanism should be in place for Quality Control).

(b) Upon completion of the picking process, documentation is marked as “completed”, dated, signed and despatched to the customer.


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(c) Items should be packed appropriately to ensure safety and deliverability, in particular, care should be taken to ensure that sterile consumables are not be packed with items that may affect their integrity.

Note: if quantities picked are not consistent with quantities stipulated on the pick slip, the Stores personnel are to note the discrepancy and to advise the appropriate Authorised Stores Officer before delivery is confirmed on the MMS. 7.17.3 Issue Of Stores Which May Be Harmful Some stores may be potentially harmful or injurious to persons and care should be taken when these are issued. In particular, the following matters require attention. (a) Disinfectants, fly sprays, powders for the destruction of vermin, and some cleaning agents

should be issued only to a responsible person and care taken to correctly label the containers in which the issue is made. Empty plastic jars and containers that may later be returned to suppliers must not be used to store such items.

(b) Where deliveries are carried to wards and kitchens, foodstuffs must be not be issued together with cleaning agents, disinfectants, laundry issues, etc.

(c) As some cleaning agents, such as soda ash, soap powders, etc. resemble in appearance such foodstuffs as baking powder, salt, cake and pudding mixtures, cornflour etc. broken bags and containers should be distinctly labeled.

(d) Potentially harmful stores are never to be put into inappropriate containers (e.g. putting disinfectant into cordial bottles).

7.17.4 Issue Of Sterile Stores Through Community Nurses Community Nurses issued with stores for patients that they visit should be aware that the Department considers as best practice the following matters when transporting and storing sterile consumables. (a) Storage temperature and humidity requirements should be as stipulated in section 9.4 of AS/NZ

4187 – 2003 (see section 7.3. c Inspection after Unloading for further information). (b) Sterile consumables should not be left in motor vehicles for an extended period, e.g. overnight

or weekends, to avoid affecting their integrity. (c) If storage of sterile consumables at home becomes necessary, appropriate containers that

maintain product integrity should be used, e.g. easily cleanable impermeable containers with fitted lids.

(d) Appropriate carrying devices that maintain the integrity of sterile consumables and that can be easily maintained and cleaned should be used when transferring sterile consumables from the motor vehicle to the patient’s home.

(e) Sterile consumables should never be left where they can be exposed to direct sunlight. (f) Sterile consumables left in patients home and no longer required must be discarded and not

returned to stores. (g) Vehicles should be maintained in a clean and dry state and in accordance to the Public Health

Organisation’s Vehicle policy. (h) Damaged stock should not be used, e.g. where there are visible sign of loss of integrity. (i) Work practices and stock control should enable the segregation of clean and dirty items. (j) Correct hand hygiene should be maintained. (k) Measures to reduce overstocking, wastage and poor stock rotation should be determined and

reviewed as necessary. (l) Regular reviews of best practice should be conducted.


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7.17.5 Issue Of Sterile Stores Directly By Company Representatives In instances where stores are ordered and requested to be delivered direct, company representatives should be made aware of the following elements for consideration as part of the delivery process: (a) storage temperature and humidity requirements as stipulated in section 9.4 of AS/NZ 4187 –

2003; (b) the use of impermeable containers preferably with fitted lids that can be easily cleaned is

recommended: handbags, briefcases or similar items should not be used; (c) excessive exposure to direct sunlight should be avoided; (d) correct hand hygiene should be maintained; and (e) any samples presented should be clearly identified as “sample only - not for patient use”. 7.17.6 Issue Of Sterile Stores By Engaging Courier Services Courier companies should be clearly advised of the importance of maintaining integrity of sterile consumables during transport as listed in Section 7.17.4 Issue Of Sterile Stores Directly By Company Representatives. (a) It is recommended that agreements with agencies include the above as Key Performance

Indicators. (b) Suppliers should ensure that courier agencies selected are involved in the achievement of

overall best practice. 7.17.7 Issue Of Uniforms And Protective Clothing The issue of uniforms and protective clothing for male and female staff is the responsibility of the delegated officers. Upon the old article being presented to the issuing officer, the issuing officer should ensure that: (a) all replacements will be on a one-for-one basis; (b) the old article is rendered unusable and converted to rags (which should if practical be disposed

of using an existing contract for the collection of clean used rags) or otherwise disposed of, as applicable;

(c) if replacement of a missing article is sought, the officer concerned has given a written statement regarding the loss to the appropriate Officer and that appropriate Officer has approved the issue of the replacement; and

(d) an individual record of issues of uniforms and protective clothing is maintained, unless the Public Health Organisation adopts a policy of “standard uniform issue”.

Note: Although most issued clothing may have a life of at least twelve months under normal wearing conditions, some items such as footwear may need to be replaced more frequently. Cessation of employment The Public Health Organisation should ensure that processes are in place to enable the return of uniforms when employment ceases.

CHAPTER 7 – RECEIPT, CUSTODY AND DELIVERY OF STORES 7.14 7.17.8 Materials Safety Data Sheets In receiving and issuing stores that are/have hazardous substances, the Occupational Health and Safety Regulation 2001 Part 6.4 (Use of Hazardous Substance) must be strictly followed. In parti0cular, the requirements for Materials Safety Data Sheets (MSDS) must be followed. The requirements of the Regulation in relation to MSDS are that: (a) a separate MSDS must be obtained for each substance supplied; (b) each MSDS must be readily accessible to an employee; (c) any MSDS must not be altered; (d) all relevant MSDS must be included in the Public Health Organisation’s register of hazardous

substances.

Note: At the time of printing of this section, Health Procurement (HP) is progressing the acquisition of a central licence for the use of software to access the MSDS. Contacting the HP on this matter is recommended. 7.18 Delivery 7.18.1 Transportation When transporting within a health care facility or to another establishment: (a) special consideration must be given to maintain the integrity of goods coming from stores; and (b) sterile consumables must be treated with utmost care to ensure that their sterile state is not

compromised. 7.18.2 Containers and Trolleys Delivery of supplies should use: (a) dedicated containers and trolleys; and (b) trolleys/tubs/containers/bins specifically labelled as belonging to the specific Public Health

Organisation - Supply Section, to prevent use for other purposes. If transporting sterile consumables: (a) suitable sealable plastic bags, containers or bins must be used to prevent dust or damage to

packages; and (b) sterile consumables may be repacked into clean undamaged cardboard boxes/containers,

provided a new clean sealable plastic liner is used for each load. 7.18.3 Condition of Equipment Containers and trolleys should be: (a) regularly cleaned with warm water and neutral detergent and allowed to dry before re-use, as

determined by the Department’s Infection Control policy and the Domestic Services Cleaning policy of the public Health Organisation; and

(b) cleaned as required but at least weekly.

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CHAPTER 7 – RECEIPT, CUSTODY, AND ISSUE OF STORES 7.15

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7.18.4 Outer Shippers Consumable items may be transported to the requester in a sealed outer shipping container provided it is clean and undamaged. 7.18.5 Small Packages Small packages of should be given special care to prevent damage. 7.18.6 Vehicle Conditions Transportation vehicles for transporting supplies: (a) should be well maintained to prevent weather damage, prevent dust and be able to protect and

maintain the integrity of goods; (b) used to transport sterile consumables between facilities be covered or enclosed and kept free of

debris; (c) should be regularly cleaned (utilising the recommended neutral detergent with warm water)

under a documented cleaning program; (d) should be subject to an environmental check at least monthly with adequate records kept; and (e) should not be used for purposes other than transporting clean items, e.g. not for the

transportation of contaminated materials. 7.18.7 Sterile Consumables in Transport Sterile consumables when picked or being transported are not to be: (a) exposed to the elements (e.g. left in trucks, vans, etc overnight or for prolonged periods); nor (b) exposed to contamination and/or mixed with:

• detergents, cleaning agents, batteries, stationery and fresh and perishable food items etc.; • items that may penetrate and contaminate them; or • placed directly on the floor of the trucks or vans, but placed in dedicated clean pallets or

trolleys. Should a vehicle be carrying sterile consumables be involved in an accident, then the integrity of the sterile consumables should be reviewed. 7.19 Occupational Health & Safety Under the Occupational Health And Safety Act 2000 and the Occupational Health And Safety Regulation 2001, employers and employees have a responsibility to ensure a safe and healthy working environment. The Department of Health is strongly committed to its responsibilities in relation to Occupational Health And Safety (OH&S) and actively promotes initiatives in relation to the objects of the NSW Occupational Health And Safety Act 2000. In particular, the Department seeks: (a) to ensure a safe and healthy working environment (an environment that includes work practices

and equipment maintenance and use); (b) to ensure effective arrangements for the use, handling, storage and transport of all products and

substances; and (c) to provide information, instruction, training and supervision for employees to ensure health and

safety at work.


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Employees of the Public Health Facilities also have responsibilities in relation to ensuring a safe and healthy workplace. These responsibilities include: (a) cooperating with the employer in relation to the development and implementation of a safe and

healthy workplace; (b) reporting any hazards, hazardous situations or accidents to a supervisor, OH&S committee

member or OH&S representative; (c) being aware of emergency procedures; and (d) using protective clothing and equipment in the manner specified in the work procedures, in

training or by the supplier. 7.20 Security 7.20.1 Access to the Warehouse Access to the Warehouse should: (a) restrict normal entry and exit to the store to only one door that the Supply Officer is able to see

the door from his/her office; (b) ensure that emergency exit doors only open from the inside and have an alarm that activates

when opened; and (c) ensure that only authorised persons are allowed in the store areas. 7.20.2 In and around the warehouse The warehouse is a secure area. To ensure security, store personnel should: (a) examine garbage removal devices to prevent stock articles being transported from the

warehouse area; (b) ensure that stocks are stored in secure areas that are not easily accessible to unauthorised

persons; (c) lock ward goods so that they only accessible to the Nurses or Unit Manager or their delegate(s); (d) ensure goods delivered to facility areas are not left in accessible places or in vehicles left

unattended; (e) immediately place goods received into a secure area; and (f) conduct regular cyclic counts of stocks. Note: Any suspicious items should not be touched or opened and be immediately reported to Security for appropriate handling. 7.20.3 Protecting People and Property Manual The section of the Protecting People and Property Manual (see pages 20.5 & 20.6) should be adhered to that addresses: (a) staff access to stores, and the proximity of change rooms and staff parking facilities to store

areas; and (b) the issue of stores in commercial sizes.

CHAPTER 7 – RECEIPT, CUSTODY AND DELIVERY OF STORES 7.17 7.21 Reporting

When quality issues or product concerns are encountered at each Public Health Facility and after it has been appropriately dealt with in accordance to the Public Health Facility local guidelines/ procedures, the matter should be lodged onto NSW Health Procurement Health Quality Reporting System (HQRS). The central system that is accessible via the HP Website http://internal.health.nsw.gov.au/business/HP/ is provided for the exclusive internal use of health services with the following conditions.

(a) Access to the HQRS is restricted to Authorised Users only. Authorised Users are required to

either be a member of the Clinical Product Managers Networking Group or the Clinical Equipment Procurement Working Party or complete an extensive training session provided by the NSW Health Procurement – Supply Infrastructure Team.

(b) Authorised Users accessing the HQRS to view entries do so as a guide/reference only.

Information or advice from the HQRS should not be used as the sole reason for conducting or not conducting business with Suppliers.

(c) Authorised Users should acknowledge that events or activities that result in Quality Reports

being submitted might be directly relevant to specific Health Service/Supplier environments or to the specific use of the product. These factors may or may not be consistent in other sites. Because of possible inconsistencies, Authorised Users should use the HQRS as a guide or for reference, as stipulated in section 7.21.b Reporting immediately above.

Special note: Information entered onto the HQRS is confidential and specific for internal NSW Health use only. Users are expected to take reasonable care and responsibly report concerns, with full consideration of the fact that information is shared with all NSW Health sites. (a) The Health Service advise their Suppliers at all times that the Quality Reporting details that

they supply are to be entered onto the statewide system, a system that is accessible by all Health Services and subject to all of the above conditions.

The HQRS may be used to forward quality concerns/reports to the following organisations. (b) State Procurement (Department of Commerce)

Quality issues reported are those concerning state contract items that require the attention and action of State Procurement. State Procurement attention or action is required after an attempt to satisfactorily address the matter with the supplier has failed.

(c) Health Procurement (NSW Health) Quality issues reported are those referred to in section 7.21.e State Procurement (Department of Commerce) immediately above and any other quality issues and concerns.

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(d) Therapeutics Goods Authority

Quality issues reported are those determined as in contravention of the Therapeutic Goods Act 1989.

Note: The Therapeutic Goods Administration (TGA) is a unit of the Australian Government’s Department of Health and Ageing and is responsible for administering the provisions of the legislation. The TGA carries out a range of assessment and monitoring activities to ensure therapeutic goods available in Australia are of an acceptable standard. At the same time the TGA aims to ensure that the Australian community has access, within a reasonable time, to therapeutic advances.

The Therapeutic Goods Act 1989 and related Regulations and Orders set out the requirements for inclusion of therapeutic goods in the Australian Register of Therapeutic Goods (ARTG), and advertising, labelling, product appearance and appeal guidelines. Some provisions such as the scheduling of substances and the safe storage of therapeutic goods are covered by relevant NSW legislation, eg the Poisons and Therapeutic Goods Act 1966 and regulations.

The HQRS may also be used to: (e) alert other Health Services of potential difficulty with a product; and (f) forward urgent alerts/notices of a product concern to other sites (system users). Note: As a duty of care, it is the responsibility of product users within the Health Service to utilise the mechanisms available to alert others (users or potential users) to product concerns that may bring harm and/or expose patients and Health Service personnel to risk or injury. Since the HQRS provides these reporting capacities, the sender of the alert should: (g) ensure that the HQRS conditions of use are fully noted prior to initialising a product alert; (h) ensure that the statement describing the alert conveys a true and accurate description of the

product concern, including the description of the incident that led to the event or encounter; (i) ensure care is taken when describing such an incident to ensure that there are no ambiguities or

possibilities of reader misinterpretation; and (j) remind recipients of the alert about the conditions of use of the system, particularly in reference

to points covered under section 7.21.c Reporting. 7.22 Asset Register Asset Registers maintained by Finance Departments and Equipment Registers maintained by Support Departments (such as Facilities or Biomedical Engineering Departments) serve differing purposes. (a) Financial Asset Register

Items considered to be “Assets” as defined by the Finance Department should have details entered into the financial Asset Register. This registration can be performed by:

• receiving Dock staff at time of receipt; • an Asset Manager; • finance Department Staff; and • maintenance/biomedical staff at time of delivery


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(b) Maintenance/Biomedical Equipment Register Items requiring tracking or maintenance should have details entered in the relevant database by the Support Department’s staff at the time of request.

(c) Tagging (bar-coding)

Tagging (bar-coding) requirements vary between Finance and Support departments. Finance may tag a whole system whereas Support Department may tag all the subassemblies. Efforts should be made to avoid duplicate tags. If single tags are not possible then the Finance and Support Departments must use differing number ranges or identifiers.

7.23 Receipt of Goods and Services – Tasks, Risks and Controls The receiving function relates to the physical receiving of goods or services, inspections, and the collection and passing on of relevant information for the payment of accounts. Various tasks, risks and associated control procedures are examined below. Should there be any tasks, risks and control procedures not addressed below, these should be considered at a senior level within the organisation. 7.23.1 Task: To ensure that services and materials received and related information are

processed and promptly made available to appropriate sections or stores (a) Risk - Plans and schedules are not communicated to those performing receiving activities, or do

not clearly identify when or where services or materials are needed.

This risk may be controlled by the following procedures:

• specifying the services and materials needed, and their locations, on plans and schedules; • communicating all plans and schedules to those performing the receiving activities; • submitting summarised service and material requirements periodically to those managing

the receiving activities; • maintaining material routing instructions for received items; • providing non-routine service or material routing instructions to those performing the

receiving activities; and • monitoring, recording and reporting service delivery problems.

(b) Risk - Information on services or materials received is not entered into the information system

accurately or on a timely basis.


• maintaining procedures for promptly updating payables and stores records; • matching dates on receiving information and stores information and follow up as

appropriate; and • periodically verifying that prenumbered receiving documents have been entered in the

information system. 7.23.2 Task: To ensure purchase or service orders not filled on a timely basis are investigated (a) Risk - Purchase or service orders are lost or not forwarded to assist receiving activities.


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• using prenumbered purchase and service orders; and • investigating missing documents.

(b) Risk - Due date information is not available.

This risk may be controlled by the following procedure:

• maintaining open purchase order information in a manner that facilitates identification of purchase orders remaining unfilled past the due date.

7.23.3 Task: To completely and accurately document goods received and goods returned (a) Risk - Loss of receiving reports or lost shipping records


• using prenumbered purchase and service orders; and • investigating missing documents.

7.23.4 Task: To accept only items or services that were properly ordered (a) Risk - Purchase order information is not made available to receiving activities.


• comparing services and materials received to properly approved service or purchase orders and rejecting services or materials not properly ordered; and

• monitoring, recording and reporting instances of invoices presented for payment when services or materials were accepted without a valid service or purchase order.

7.23.5 Task: To accept only services and materials that meet purchase order specifications (a) Risk - Purchase order specifications are unclear.


• maintaining current lists of specifications for inspecting and testing goods or evaluating service requirements; and

• verifying specifications or requirements with purchasing or other appropriate personnel. 7.23.6 Task: To ensure that all materials transferred from the receiving activity to other

activities are recorded. (a) Transfer procedures do not require preparation of supporting documentation.

This risk may be controlled by the following procedure:

• requiring documentation of transfer of materials from receiving to other activity areas (eg stores).


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(b) Transfer documentation may be lost.


• prenumbering documents to assist in identification during searches; • investigating the reasons for missing documents; and • counting periodically stores or materials on hand, comparing the counts with stores or

materials records and investigating any differences. 7.23.7 Task: To safeguard goods received. (a) Inadequate physical security over goods received.


• placing goods in secure areas • maintaining facilities and following security processes, such as ensuring only one door is

available for access; and • advising higher management of any need for better security and necessary security

procedure improvements if appropriate. 7.23.8 Task: To ensure that vendor, inventory and purchase order information is accurately

updated to reflect receipts. (a) Receiving information may be lost.


• prenumbering documents to assist in identification during searches; • investigating the reasons for missing documents; and • periodically identifying and investigating open service or purchase orders.

(b) Receiving information may be entered inaccurately in the information system, or may not be

timely.


• periodically verifying accuracy of vendor, inventory and open service or purchase order information;

• periodically ensuring information is being entered into the information system on a timely basis; and

• monitoring, recording and reporting accuracy and timing problems. 7.23.9 Task: Notify service providers promptly of sub standard performance or return

rejected items promptly. (a) Inadequate or untimely inspection or review of service or items received.


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• monitoring, recording and reporting inspection and review problems • determining reasons for any inadequacies/untimeliness, and reviewing and revising

processes to ensure that inspections and reviews are adequate; and • adhering to appropriate procedures for inspection and review.

7.23.10 Task: Completely and accurately document all transfers to and from storage. (a) Incomplete or inaccurate information regarding materials transferred to or from storage.


• refusing transfer without complete and accurate documentation and using software that requires complete data;

• ensuring that transfer documentation accompanies all transfers; and • ensuring that stores or other activities personnel verify materials and quantities received.

(b) Transfer documents may be lost.


• using prenumbered transfer documents to assist in identification if lost; • investigating missing documents; • periodically counting materials, reconciling with stores records; and • investigating differences between counts of material and stores records.

7.23.11 Task: Appropriately requisition all goods to be transferred (a) Theft, loss or mislaying due to inadequate transfer or requisition procedures.


• transfer materials only on the basis of a properly approved requisition; and • monitoring, recording and reporting problems arising through transfer or requisition

processes. (b) Safety and accountability issues arising through inadequate transfer or requisition procedures.

These risks may be controlled by the following procedure:

• ensuring that the locations of goods are documented, enabling rapid location in the event of safety issues being detected.

7.23.12 Task: Maintaining safe working conditions and storage of hazardous materials. (a) Inadequate consideration of safety and storage arrangements


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These risks may be controlled by the following procedure:

• developing, reviewing, implementing, and monitoring compliance with, policies consistent with Occupational Health and Safety (OHS) and other pertinent laws and regulations;

• following up reported safety concerns; • maintaining appropriate procedures for handling and storing hazardous materials, eg as

indicated by manufacturers’ instructions; and • ensuring adequate training is provided to employees on the handling of hazardous

materials or working in a hazardous environment. 7.24 Stock Balances 7.24.1 Internal Spot Check Of Stock Balances Cyclical spot-check of a percentage of stock should be performed by store staff in addition to other stock checks, such as those conducted for management. These checks should be performed weekly or fortnightly and be limited to a sample of the store contents. The stores officer checking the stock balances should: (a) record that the check has occurred (eg by initialing computer printouts or stock cards) (b) maintaining a spot check register in the store; and if an item shows consistent discrepancies, (c) conducting, or arranging for, a thorough investigation of the discrepancies. 7.24.2 Stocktaking Because it reveals what is actually in a store, stocktaking is an important aspect of stores management. It is recommended that the following should be performed: (a) spot checks as specified in section 7.24.1 Internal Spot Check Of Stock Balances; (b) a cyclical monthly check of about ten (10) percent of stores by the facilities Management,

ensuring correct procedures are maintained; (c) initialing and dating of relevant computer printouts or stock cards by the checking officer and

recordings maintained of the items checked and, if found, discrepancies; (d) if a discrepancy is discovered or where circumstances warrant it, an investigation is to be made; (e) any approvals given to adjust stock balances are to be noted on records/stocksheets; (f) if discrepancies are excessive or recurrent or where circumstances warrant the matter is to be

referred to the facilities Management; (g) a complete stocktake is to be undertaken near the end (ie 30 June) of each financial year unless

external audit agrees that other measures of effective stock control exist; and (h) the complete stocktake includes all stock in stores except expensed stores issued, i.e. those

stocks recognised as brought into use by various Public Health Organisation cost centres. 7.24.3 Certification of the existence and good order and condition of all stock held At 30 June each year a certificate is to be completed, dated and signed by the appropriate Officer in the following terms:


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“I certify to the existence and good order and condition of all stock held within the store.” The certificate is to be retained for audit/inspection.


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7.25 Recommended Receipt of Stores Flow Chart

INSPECT AFTERUNLOADING

VISIBLEDAMAGE?

QUARANTINEDETAILEDINSPECTION IFAPPROPRIATE

ITEMS OK?

Yes

ITEMS OK? No

No

STOCKITEMS?

PLACE INDESIGNATED

HOLDING AREA

No

INSPECTION BYEND USER

INSPECT PRIORTO UNLOADING

VISIBLEDAMAGE?

REJECTDELIVERYYes

No

DELIVERY TOREQUESTING

DEPT

RETURN TOSTORES

DETERMINE IFSTOCK ITEMS

GOODSDELIVERED

Yes

No

ITEMS INTOSTORAGE FOR

PICKINGYes

ACCEPT ITEMSFOR USE

Yes

CONTACTSUPPLIER TODETERMINE

ACTION


SUPPLEMENT 1

GUIDELINES

For

CONSIGNMENT STOCK

Version 0.3 [Draft]

19 December 2005

NSW Health Procurement

PO Box 1770 Chatswood NSW 2057

Web: http://www.pp.health.nsw.gov.au

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HEALTH PROCUREMENT

A Division of Health Support


Authorisation NSW Health Peak Purchasing Council Secretariat prepared this report on behalf of Tenders & Contracts Officers / Managers Networking Group [TCNG] Clinical Product Managers Networking Group [CPMNG]

For additional information or comment please contact

Valentino Bulaon: [email protected]

Document Control

Version Description Author Date 0.1 Consignment Stock Guidelines -

Draft HPPC 21 July 05

0.2 Consignment Stock Guidelines – Draft 2

HPPC 28 July 05

0.3 Consignment Stock Guidelines – Draft 2

Health Procurement

19 Dec 05

Document Distribution Tenders & Contracts Officers / Managers Networking Group [TCNG] Clinical Product Managers Networking Group [CPMNG] Clinical Equipment Procurement Working Party Supply Chain Reform Project Managers

Acknowledgements

Bruce Cornwell, Sydney South West AHS Maureen Kable, Sydney South West AHS Wayne Davis, Northern Sydney Central Coast AHS Gary Sly, Department of Health David Wilkinson, Department of Health NSW Treasury Managed Fund

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SECTION 1 – GENERAL INFORMATION 1. INTRODUCTION 2. DEFINITION 3. SHARED RISKS & BENEFITS 4. AGREEMENT CONSIDERATIONS 4.1 The Terms & Conditions of the Agreement 4.2 Responsibilities of the PHO 4.3 Responsibilities of the Supplier 5. OTHER CONSIDERATIONS 5.1 Inventor y Systems 5.2 Staff Processing 5.3 When Consignment Agreement is Not Recommended SECTION B – APPENDICES Appendix 1 – Terms and Conditions Appendix 2 – Sample Indemnity Form (Revised)


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SECTION A – GENERAL INFORMATION 1. INTRODUCTION The purpose of this guideline is to assist Public Health Organisations [PHO] in the establishment of consignment agreements. Although agreements in place may vary in accordance to Supplier offers, this guideline attempts to list the key elements to consider when establishing such agreement. Notes: All PHO should ensure that consignment agreements are in accordance with policies and procedures as stipulated in the “Purchasing and Supply Manual for Area Health Services, District Health Services and Public Hospitals” Procedures for the receipt of consignment and sterile load inventory may vary from one PHO to another, and may be dependent on local policies and existing business practices. 2. DEFINITION Consignment stock is inventory that is in the possession of the PHO, but is still owned by the supplier. In other words, the supplier provides inventory to the PHO (in their ward storage facility or central supply stores) and allows the PHO to consume directly from that stock of inventories. The PHO purchase the inventory only as the inventory is consumed, the next consignment order is placed or on the passing of a pre-determined period after delivery. 3. SHARED RISKS & BENEFITS The key benefit to the PHO is that capital is not tied up in inventory. However, this does not mean that there is no inventory carrying costs, as costs related to storing and managing the inventory are to be accounted for. Consignment creates a condition of shared risk whereby the supplier risks the capital investment associated with the inventory, while the PHO risks dedicating storage space for the inventory. This also creates a condition of shared benefit because neither the supplier nor the customer will benefit until the inventory is consumed. This shared-risk / shared-benefit condition will often be enough to convince a PHO to stock the inventory. There is a potential side benefit to consignment inventory in that some shared information that results from the consignment process could be useful to the supplier in their inventory management. This information may be integrated into the Supplier’s production planning systems. 4. AGREEMENT CONSIDERATIONS 4.1 The Terms & Conditions of the Agreement Both the Supplier and the PHO need to clearly understand the terms of the agreement [Refer to appendix 1]. Other elements that should be considered but are not limited to:


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Real-time sales or period-end sales Time limit (must be purchased or returned within specified period) What is the freight policy? What is the return policy, including credit from supplier on return of goods? Confirmation of responsibility for damage or loss while in customer’s possession, in reference

to NSW Health policy What are the Insurance implications? How and when is data exchanged? What data is exchanged? How are miscellaneous transactions processed? Cycle count adjustments, Obsolete inventory

4.2 Responsibilities of the PHO a. Ensure that the Terms & Conditions of the agreement are fully understood by both the PHO and

the Supplier b. Maintain the integrity of consignment inventory as specified by the manufacturer while stored

at the PHO storage facility. c. Departments within PHO (who normally hold consignment inventory) should ensure that an

“official agreement” with the consignor is in place before accepting consignment inventory. This is normally arranged through the central Supply Department.

d. Only the PHO authorised personnel may take receipt of direct delivery of consignment inventory from the Supplier.

e. Receipts of consignment deliveries are in accordance with PHO policies, e.g. all inventory listed on the delivery documentation are checked against inventory received.

f. Consignment inventory used is documented by an PHO Authorised Officer. This will enable replacement and invoicing by the Supplier. In other arrangements, unused inventory is returned to the Supplier and used inventory is invoiced accordingly. Arrangements may vary at each site.

4.3 Responsibilities of the Supplier

a. Ensure that the Terms & Conditions of the agreement are fully understood by both the PHO and

the Supplier b. Agrees to indemnify the PHO and the NSW Department of Health per the agreed terms and

conditions. [Refer to appendix 1 and appendix 2] Note: at the completion of the agreement the inventory may [depending on the terms of the agreement] either be returned to the Supplier or will be paid for and owned by the PHO. In either case the Supplier will no longer be responsible for indemnifying the PHO.

c. Ensure that consignment inventory is supplied in accordance with manufacturer’s recommended

transport, storage and handling policies/ procedures/guidelines. d. Only Supplier Authorised representatives are assigned to deliver consignment inventory to the

PHO. Delivery is to be in accordance with the PHO preferred methods. e. Consignment inventory delivered is fully documented, i.e. in such a way that it facilitates easy

crosschecking by the PHO against the list of inventory per the agreement.


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5. OTHER CONSIDERATIONS 5.1 Inventory Systems The nature of consignment inventory is that “change of ownership” is unrelated to the shipment / receipt processes. This is contrary to the basic design of most inventory / accounting system’s transactional processes. Because of this, most inventory systems do not handle consignment inventory very well. This forces some PHO to manage consignment inventory with manual off-line processes. Not only is this time consuming, but it also creates opportunities for errors as the additional transactions necessary for consignment inventory can be complicated and are highly dependant on accurate information sharing. If this process is not monitored closely, reconciliation of consignment inventory can be a difficult exercise. Note: as systems improve the facility to handle consignment inventory may improve in time, i.e. State build of Oracle or use of systems such as Supply Scan. The inherent manual process will then be addressed. 5.2 Staff Processing There needs to be detailed documentation and training for staff in the management of consignment inventory. 5.3 When Consignment Agreement is Not Recommended When demand is reasonably known and stable, consignment inventory is not recommended.


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SECTION B – APPENDICES Appendix 1 – Terms and Conditions Level of Consignment Inventory The level of consignment inventory is to be maintained as per the formal pre-determined

quantities. Any changes to quantities must be agreed between the PHO and Supplier in writing. [Quantities are normally listed as Imprest schedules]

A stocktake of the consignments inventory is to be carried out at least three (3) times annually

by the Supplier. The PHO and the Supplier must sign off the resulting count and records kept for year-end reporting and audit purposes.

Outside the scheduled stocktake, the Supplier may request to audit the consignment inventory

on a regular basis at a time convenient to the PHO.

Storage The consignment inventory must be stored in a secure and clean environment and within the

guidelines as set out on the product packaging. Consumption The PHO must notify the Supplier of consignment inventory usage within 48 hours, or within a

period as determined between the PHO and the Supplier, and Provide the Supplier an official purchase order to facilitate replacement of used consignment

inventory. The PHO must pay accounts in accordance with the terms and conditions of the agreement.

Period In general, the PHO may retain the consignment for a period of one year or for a period as

determined between the Supplier and the PHO. Ownership The consignment inventory remains the property of the Supplier and shall be insured by the

Supplier. The PHO shall allow the Supplier’s insurance representatives to make periodic inspections at a

mutually convenient time. Any inspections should be effected under appropriate supervision.


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Insurance and Indemnity The Supplier agrees to indemnify the PHO and the NSW Department of Health against liability,

loss, damage, cost, expense or tax incurred, in connection with or suffered by the Supplier as a result of damage to consignment inventories. This indemnity shall be a continuing indemnity and shall survive the termination of the agreement.

The above indemnity may not be applicable if the following conditions are established:

a. Breakages to consignment inventory resulting from storage in environmental conditions outside

those noted in the packaging and / or as per the recommended storage conditions stipulated by the manufacturer

b. Breakages to consignment inventory resulting from deliberate misuse or mishandling by PHO staff.

Withdrawal from the agreement The Supplier may withdraw the consignment inventory seven (7) days after a written notice is

provided and officially received by the PHO Authorised Officer. The PHO may terminate the consignment agreement with no penalty incurred, fourteen (14)

days after a written notice is provided and officially received by the Supplier’s Authorised representative.

Variations to pricing The Supplier must advise price variations at a minimum (30) thirty days before any increase /

decrease is to be effective. This advice may vary for some specialist items. Deliveries of Consignment Inventory must be in accordance with the PHO policies and

procedures.


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Appendix 2 – Sample Indemnity Form [Revised]

[Original copy courtesy of Sydney South West Area Health Service]

HEALTH PROCUREMENT


This “SCHEDULE TO INDEMNITY AGREEMENT FOR CONSIGNMENT STOCK ON LOAN” made on___/___/___ between_________________________________Public Health Organisation] and_ __________________________________________ [Supplier] Background Information: The Public Health Organisation [PHO] has agreed to accept consignment inventory of the goods as supplied by the Supplier on the terms and conditions stipulated below:

Definitions:

Goods – means the goods specified in the schedule and any other property supplied by the Supplier on loan to the Health Service under this agreement. Public Health Organisation [PHO] – any NSW Health body corporate, department or body into which it may be merged or subsumed or which may replace it and its successors and assigns. Supplier – means the party whose details are specified in the schedule and his/her/its executors, administrators, and successors and permitted assigns, as the case may be.

Terms & Conditions:

1. The supplier shall deliver and install “with reasonable care” (where needed / required) the

goods at the PHO premises at the beginning of the loan period and to remove the goods from the PHO premises at the end of the period.

2. The PHO and Supplier may agree in writing to extend the loan period or complete another

Indemnity Agreement. 3. The PHO may direct the Supplier to remove the goods at any time.


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4. If the Supplier does not remove the goods at the end of the said period, the PHO may, after the expiration of 28 days from the end of the loan period, and at the Supplier’s expense, have the goods removed from the PHO premises and returned to the Supplier’s premises.

5. The Supplier reserves the right to withdraw the consignment inventory at any time subject to 14

(fourteen) days notice. 6. The Supplier shall advise any price variations thirty days before implementation. 7. The Supplier shall provide training for PHO staff and all information necessary for the safe

storage, handling and use of the goods on loan. 8. Subject to point 7, the PHO shall utilise the goods with reasonable care. The PHO shall store

the goods in a secure and clean environment. 9. The level of inventory of the consignment shall be maintained as per formal schedules (sample

form attached). Any changes to these schedules shall be agreed between the parties. 10. The initial Consignment inventory delivered shall be jointly checked and agreed by

representatives of the Supplier and the PHO. 11. The Supplier shall carry out a stocktake of the consignment inventory at least three times

annually. The count shall be agreed with the PHO Authorised representative. 12. During the loan period, the PHO shall give the Supplier reasonable access to the goods for the

purpose of audit of goods held on consignment. The PHO reserves the right to deny access if deemed appropriate.

13. The PHO shall notify the Supplier of use of any consignment goods within 48 hours, or such

other period as determined between the PHO and Supplier. The PHO shall supply an official purchase order for replacement of the consignment goods used. Accounts shall be paid in accordance with the normal terms and conditions of the PHO.

14. The Supplier agrees to indemnify the PHO and the NSW Department of Health against liability,

loss, damage, cost, expense or tax incurred, in connection with or suffered by the Supplier as a result of damage to consignment inventories. This indemnity shall be a continuing indemnity and shall survive the termination of the agreement.

15. The above indemnity may not be applicable if the following conditions are established:

Breakages to consignment inventory resulting from storage in environmental conditions outside those noted in the packaging and / or as per the recommended storage conditions stipulated by the manufacturer

Breakages to consignment inventory resulting from deliberate misuse or mishandling by PHO staff.


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16. The Supplier shall indemnify the PHO in regards to any claims, which arise as a result of negligence for any injury to persons (including death) or any damage to any property that may arise from manufacture, servicing, transport, or installation of the goods, or any other negligence of the Supplier.

17. The Supplier shall remain the owner of the Goods throughout the term of this agreement and

shall keep the goods insured on an industrial Special Risk basis or better during the period of the loan. The PHO shall allow the Supplier’s insurer reasonable access to inspect the goods.

18. The Supplier shall take out and keep in force, during the life of the agreement a Broad Form

Contractual Third Party Limited Insurance in the amount of not less than $20 million in respect to each and every occurrence and unlimited in the aggregate for any one period of cover. A certificate of currency(s) for the policy(s) shall be made available to the PHO on demand.

19. The Supplier shall keep accurate details of the serial and other identification markings on the

Goods. 20. The Supplier acknowledges and agrees that nothing in this agreement creates any obligation on

the part of the PHO to:

a. Purchase the Goods from the Supplier or any distributor of the Supplier; b. Purchase goods similar to the Goods from the Supplier or any other seller or to request

expressions of interest or tenders for the purchase of such goods; c. Include the Supplier in any selective tender for acquisition of any product; d. Treat the Supplier favourably or give the Supplier any advantage or credit in any

expression of interest, tender or other procurement procedure; e. Provide any information concerning the PHO or its procurement procedures to the

Supplier. 21. The Supplier warrants and agrees that:

a. The Goods are fit for the purpose for which they are to be used by the PHO, the Goods

comply with all relevant quality and safety standards and are approved for use by all necessary authorities;

b. The Goods, if used according to the manufacturer's or Supplier's specifications, shall not cause injury or death to any person and shall not damage or destroy any property of the PHO or any person.

c. The PHO may attach additional requirements to this generic form if / when deemed appropriate.


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SCHEDULE TO INDEMNITY AGREEMENT FOR CONSIGNMENT STOCK ON LOAN

Loan start date: Loan end date: Description of Consignment Stock:

Manufacturer Supplier Item Number/s: SUPPLIER: Signed on behalf of the Supplier: _______________________________ Name:

Position:

Supplier:

Date:

Address:

ABN Contact Details Phone: Email:

Fax: PUBLIC HEALTH ORGANISATION [PHO] Signed on behalf of the PHO: ___________________________ Name:

Position:

Health Service:

Date:

Contact Details Phone: Email:

Fax: Signed by Witness: ___________________________ Name:

Position:

Date:

HEALTH PROCUREMENT


TABLE OF CONTENTS

CHAPTER 8 - DISPOSAL OF SURPLUS, OBSOLETE AND UNSERVICEABLE STORES (EXCLUDING MOTOR VEHICLES)

8.1 GENERAL..................................................................................................................... 8.1 8.2 DECISION TO DISPOSE............................................................................................ 8.1 8.3 ESTIMATE THE VALUE........................................................................................... 8.1 8.4 APPROVAL OF DISPOSAL....................................................................................... 8.2 8.5 METHOD OF DISPOSAL........................................................................................... 8.2 8.5.1 Goods with No Value...................................................................................................... 8. 2 8.5.2 Goods valued at up to $1500 .......................................................................................... 8.3 8.5.3 Goods or Groups of Like Items (valued at over $1,500 but not exceeding $150,000) ... 8.3 8.5.4 Goods Valued Over $150,000......................................................................................... 8.5 8.6 DISPOSAL BY A THIRD PARTY ............................................................................. 8.5 8.7 PREPARING GOODS FOR DISPOSAL................................................................... 8.5 8.8 GENERAL..................................................................................................................... 8.6 8.9 DISCLAIMER POINTS............................................................................................... 8.6 APPENDICES 8-A AUCTION...................................................................................................................... 8.7 8-B SCOPE OF ENGAGEMENT (By Third Party Provider)......................................... 8.9 8-C ENGAGING INTHESHED ASSET MANAGEMENT P/L...................................... 8.10 SUPPLEMENT 1 – Management of Surplus Equipment ............................................................ 8.11 SUPPLEMENT 2 – Non-Disclosure Agreement......................................................................... 8.12 SUPPLEMENT 3 – Authorisation............................................................................................... 8.13 SUPPLEMENT 4 – Sample Letter Seeking/Accepting Quote .................................................... 8.14

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CHAPTER 8 – DISPOSAL OF SURPLUS, OBSOLETE AND UNSERVICEABLE STORES (EXCLUDING MOTOR VEHICLES) 8.1

8.1 GENERAL As with the acquisition of goods or services, the disposal of goods must achieve value for money. The disposal process is to be conducted in an efficient, effective and transparent manner to ensure probity and fairness. Note: Health Support has established a State Contract through the State Contract Control Board that enables Health facilities to access the services of a third party for the disposal of surplus and unserviceable stores/equipment. Although the use of this third party is not mandatory at this stage, health organisations are encouraged to explore this option where there is likely to be benefits. This service includes re-deployment/re-use through-out the Health system, sale, donation to registered missions and appropriate disposal/destruction in accordance to Health waste management policies. The use of the above third party may be the most cost effective means of dealing with surplus stores and is subject to the terms and conditions set by the State Contract Control Board and any additional conditions that may be set individually by each facility. Access to the above third party eliminates the need for each facility to individually release a tender for this service if the use of a third party is the option chosen to dispose of surplus stores/equipment – refer section 8.6. The use of the abovementioned third party satisfies the requirements stipulated in section 8.5, as the said requirements will be managed by the third party on behalf of the engaging Public Health Organisation. 8.2 DECISION TO DISPOSE Goods identified as potentially suitable for disposal should be assessed by the responsible officer to determine that the goods are appropriate for disposal. Common criteria used for this purpose include: • no longer required; • unserviceable or beyond economic repair; • technologically obsolete and operationally inefficient; • surplus to current or immediately foreseeable needs; and • part of an asset replacement program. (* note section on Trade In) 8.3 ESTIMATE THE VALUE An accurate valuation of the goods assists in selecting the most appropriate method of disposal, and identifying the necessary level of approval. The value of a good is dependent on the market; and the perceived advantages of the good to buyers in the market. All disposal actions require an assessment and certification of the value of the goods by an appropriately skilled person. It is recommended that a registered valuer independently assesses, and recommends the most appropriate means of disposal for any goods that may have a high sale value.

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8.4 APPROVAL OF DISPOSAL A business case for disposal action should be prepared for consideration and approval by the Chief Executive or his/her delegated officer. The business case should include: • Reasons for disposal • Estimation of realisable value • Consideration and recommendation of the best method of disposal The approving officer must be satisfied that the chosen method of disposal is commensurate with the value of the goods, and that it reflects the appropriate level of competition. The disposal method chosen must be appropriate to the nature, quantity and location of the goods, and promote fair and effective competition to the greatest extent possible.

All officers involved in the disposal process should be aware of their obligations under the Code of Conduct to act impartially, ethically and to avoid any conflict of interest. Note: All approvals must be retained on file for audit purposes. 8.5 METHOD OF DISPOSAL The optimum method of disposal is influenced by the estimated value of the goods/equipment as shown in the following categories: 8.5.1 Goods with No Value Any item deemed to have no value or unserviceable stores and equipment beyond economical repair may be destroyed, recycled or disposed of in an appropriate and environmentally friendly manner. Unserviceable equipment beyond economical repair and having no scrap value should be certified as such and then disposed of in the most efficient manner given the nature of the goods and environmental aspects. All Public Health Organisation identification marks are to be removed. The Chief Executive or delegated officer can approve the donation of obsolete and unserviceable/expired stores (including medical supplies) and equipment to charitable organisation’s in both Australia and overseas provided all other avenues for disposal have proven unsuccessful. Verification is required of the organisation’s charitable status. Public Health Organisation’s are to offer equal opportunity to charities to benefit from the donation of obsolete/unserviceable goods, equipment etc. to ensure equity. It is reasonable for the donor to consider the relative economy, effectiveness and efficiency of the proposed use of the items by the recipients in making decisions to donate. Disposal of Obsolete Working Computers The NSW Government’s ReConnect.nsw Computer Program exists to enable the donation of redundant government Agency computers to not-for–profit organisations and disadvantaged individuals. Public Health Organisations are to consider the ReConnect.nsw Computer Program as the preferred option in the disposal of owned redundant computers. Guidelines for participation in this program are available through the Agency Resource Centre of the OIT website http://www.oit.nsw.gov.au/pages.asp?CAT=805&ID=1001 22(5/07)


8.5.2 Goods Valued at up to $3,000

Goods valued at up to $3,000 per item or group of items **where the low value does not warrant the expense of extensive advertising should be disposed of by either : • Acceptance of written proposals • Negotiated sale Where considered prudent, a reserve price should be set as the minimum offer that will be accepted. Where reserve prices are established or where items are priced for sale, the officers determining the prices, should remain independent of and apart from the bidding process. Such officers should be aware of the Organisation’s Code of Conduct concerning impartiality and conflict of interest.

If an item or group of items which has been valued at under $3,000 attracts an offer in excess of ten (10) per cent of the $3,000 limit the individual making the offer is to be advised that the procedures applying to goods valued over $3,000 but not exceeding $250,000 are to be followed, e.g. 3 quotes required etc. Assets should not be disposed of in a way that excludes participation of members of the public or which provides an unfair advantage to staff. The low value of the items being disposed of generally does not allow expensive advertising. However, within the limit of funds available for that purpose, the availability of the items being disposed of should be advertised as widely as possible. This may be by way of “For Sales” notices placed on notice boards visible to both staff and visitors to the Hospital. Notices should show that enquiries and applications to purchase are welcomed from the general public. In all cases individuals purchasing items are to be made aware that items are for purchase and removal with all faults, if any and that the vendor will not be responsible for any defect. The approving officer is to certify that values determined and prices obtained, for items or groups of items are fair and reasonable.

8.5.3 Goods or Groups of Like Items **Valued At Over $3,000 but not exceeding $250,000 Transfer to another Public Health Organisation or Ambulance Service

Public Health Organisations having surplus or obsolete stores exceeding an estimated realisable value of $3,000 per item or group of items** must initially advise all Public Health Organisations through Health Procurement Bulletin Board system located at http://internal.health.nsw.gov.au/business/hp . The HP Bulletin Board was established to allow a Public Health Organisation to advertise full details of surplus goods across NSW. Once new entries are lodged, an email notification is sent to all registered users. Conversely, a Public Health Organisation may advertise for their need to obtain certain good from other Public Health Organisation’s surpluses. Public Health Organisations can also contact and negotiate direct with other prospective recipient Public Health Organisations.

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The Public Health Organisations with the surplus stores shall deal directly with interested Public Health Organisations wishing to obtain such stores to negotiate a mutually agreed cost to transfer the stores.

If after 3 months listing with Health Procurement, stores have not been acquired by another Health Service, the stores shall be disposed of by either: • Obtaining 3 written quotes - The procedures described in Chapter 2 of this manual should be

followed. The NSW Department of Commerce will from time to time provide lists in its monthly circular, of parties interested in quoting for used items in a variety of categories such as furniture, white goods, etc. Public Health Organisations should contact these companies in addition to advertising the availability of goods for disposal in local media.

In country areas local dealers, known interested parties, etc., should be canvassed. Examples of letters to be used when seeking or accepting quotes are shown as Supplement 4 of this Chapter.

• Tender Action - By undertaking complete tendering procedures as described in Chapter 3 of this

Manual. • Auction - Goods may be disposed of by auction. If this option is used the procedures described in

Appendix 8-A should be adhered to. • Trade In - Trading in surplus goods can be an efficient means of disposal, and a convenient way to

upgrade equipment. However, unless undertaken appropriately, this method may not provide the best financial return to the Health Service. An officer who is authorised to make purchases to the gross value of the transaction must approve the trade-in and purchase strategy.

Often, the purchase price may have been inflated to offset the trade-in value offered by the supplier. Explore the option of separately selling the surplus goods and using the revenue to offset the purchase cost of the new equipment, as the net cost for the upgrade may be lower than the trade-in and purchase offer.

In all cases, whether offers are written or oral, prospective buyers are to be informed that goods/stores are: 1. fo r purchase and removal with all faults, if any and that the vendor will not be responsible

for any defect; 2. goods should also be collected by the purchaser within a reasonable time, e.g. seven (7) days,

and payment is to be made by cash or bank cheque on or before collection.

The Chief Executive or his/her delegate, where practicable, is to certify that prices obtained for items or groups of items are fair and reasonable.

• Unsuccessful Disposal Action - If no quotations, tenders or bids are received, surplus stores may

be disposed of in accordance with Section 5.1 Stores with No Value. Alternately stores may be destroyed, recycled or disposed of in an appropriate and environmentally friendly matter under the supervision of a responsible officer who must certify the performance of the action.

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8.5.4 Goods Valued Over $250,000

If the estimated value of the goods exceeds $250,001, the disposal must be referred to Department of Commerce (NSW Procurement Contracting Services) for the invitation of tenders/auction approval action. Area Health Services, Children’s Hospital Westmead and Ambulance Service of NSW have been granted interim accreditation and may undertake disposal activities of goods (excluding real property, such as land and buildings) up to a value of $100 million without reference to the Department of Commerce. Affiliated health organisations can tender to dispose of surplus or unserviceable goods themselves. The public health organisations must refer proposed disposal of goods of this value to the Procurement and Contract Services, Asset and Contract Services Branch, Department of Health for advice prior to the invitation of tenders or auction.

• Tendering - By undertaking complete tendering procedures as described in Chapter 3 of this Manual; or • Auction - Goods may be disposed of by auction. If this option is used the procedures described in

Appendix 8-A should be adhered to. 8.6 DISPOSAL BY A THIRD PARTY Health Support has established a State Contract through the State Contract Control Board that enables Health facilities to access the services of a third party called “InTheShed Asset Management Pty Limited” [“InTheShed”]. The service is available through a “Standing Offer Agreement” for a period of three years, from November 2006 to November 2009, with an option to extend up to 2011 through twelve months extensions subject to performance & needs reviews. A “Guide to Engaging INTHESHED Asset Management P/L” and the copy of the SCCB agreement is available from the Health Support (Procurement) website located at http://internal.health.nsw.gov.au/business/hp, (click the link to the library)

While it is expected that all disposals will be arranged through the service provider there may be circumstances where disposals are undertaken directly. In these cases the delegations detailed above apply. Note that although the provider’s name denotes the provision of asset management, the above engagement is limited to the scope as stipulated in section 4.2 “Services that may be offered – Scope of Engagement”, Appendix 8-B. 8.7 PREPARING GOODS FOR DISPOSAL A check is to be undertaken that goods to be disposed of do not contain material that is not intended for disposal. Neglecting to check may result in legal liability and embarrassment to the public health organisation. Examples of material that should be removed before disposal include: • Stationery – particularly printed stationery, which could be misused; • Software - unauthorized transfer could breach license agreements; • Classified information contained in hard or floppy disks; • Records, files papers or whiteboards containing information which, if disclosed, could breach privacy

legislation, and/or cause embarrassment or problems for the disposing organisation; • Environmentally sensitive or hazardous stores. If goods are of a hazardous or polluting nature the

disposal must be undertaken in a responsible manner, which is consistent with the relevant regulations and procedures. Reference should be made to the Waste management Guidelines in Section 4 of the Occupational Health, Safety and Rehabilitation Guide or contact can be made with the NSW Environmental Protection Authority; and

• Public Health Organisation identification marks e.g. logo, name.

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8.8 GENERAL • **For the purpose of this section like items are those broadly grouped into a similar category, i.e.

furniture, electronic goods (televisions, video recorders, etc.), white goods, computers, tool/ machinery, marine (boats, including outboard motors), office equipment, medical goods (including consumables).

• All details regarding disposals are to be held on file pending audit. The file number or

reference number is to be cited on all records where adjustments are made due to disposals, viz. stock cards, inventory sheets, asset registers, etc.

• All proceeds from sale other than as shown in paragraph 4 are to be recognised in the

General Fund. • Receipts for the sale of assets (excluding inventory items) that do not qualify for formal accounting

recognition in terms of the “$5,000/useful life exceeding two years” policy are to be recognised as Other Revenues.

• Receipts from the disposal of assets assigned a monetary value within the Statement of Financial

Position are to be offset against the written down value with the difference formally recognised as a Gain/Loss on Disposal. Use of the moneys is to be locally determined unless expressly advised otherwise by the Department.

• If goods are to be disposed of as a job lot, (ie multiple items of a dissimilar nature) the value of the

lot is the relevant figure. If the goods are to be disposed of as individual items, then the value of each item is the limit used to determine the appropriate method of disposal.

• Any changes to the disposal process, terms or conditions must be communicated to all potential

participating parties as soon as possible. 8.9 DISCLAIMER POINTS • In all cases, whether offers are written or oral, prospective purchasers are to be made aware that

items are for purchase and removal with all faults, if any and that the vendor will not be responsible for any faults.

• Defects should be brought to the buyer’s notice before entering into the contract. This should be

evidenced in writing. • The contract should include a statement to the effect that - “All conditions, warranties and liabilities

implied by statute, common law or otherwise are excluded.” • A disclaimer in the form of the undermentioned is to be completed and signed by the recipient:

“The RECIPIENT by accepting the goods listed in the attached Schedule releases and indemnifies the Health Service against all actions, suits, claims, liabilities or demands whatsoever arising out of or in connection with the acceptance of the goods by the RECIPIENT or by the subsequent use of the goods by any third party.” In lieu of “RECIPIENT” the name of the recipient is to be substituted. 22(5/07)


APPENDIX 8-A AUCTION Sale by public auction should be considered for surplus goods and equipment where it is anticipated a public demand exists for the items. Further considerations are the costs associated with sale at auction (e.g. transport) in relation to the expected realisable revenue and whether alternative disposal methods (e.g. tender) may realise higher returns. Auction sales may be held at auctioneers premises or on site where reasonable quantities of goods exist. Deciding on an Auctioneer Competitive quotes should be obtained from auctioneers on a commission basis. It must be clearly conveyed to the auctioneer the commission must cover all charges such as auctioneers fees, advertising, insurance, cataloguing, cost of premises, all labour, administrative fees and miscellaneous charges (including financial transaction fees). No charges above the agreed commission should be paid. When selecting an auctioneer the following issues should be considered: (A) The auctioneer is properly licensed under the Auctioneers and Agents Act of 1941. (B) The auctioneer operates in a professional manner and has a good reputation. (C) The auctioneer has a suitable premises. (D) The auctioneers premises is suitable located. (E) The auctioneer provides an undertaking that the auction will be conducted in accordance with the

provisions of the Auctioneers and Agents Act 1941 and regulations thereof. Transfer of Goods to the Auctioneers Premises Under normal circumstances it is the responsibility of the area health service or hospital etc. to arrange transport of goods to the auctioneers premises. This may be done, given the size/number or value of the items, by: (i) Area health services or hospitals own transport if available/appropriate; (ii) Courier, (see contract 630); (iii) Cartage contractor (see contract 616); or (iv) Private Furniture Removalist, competitive rates should be obtained from at least three firms for

transport of furniture items under these circumstances. Documentation Itemised lists or dockets should be prepared in quadruplicate. (i) One copy to the carter. (ii) One copy to the Auctioneer as his record of items for sale. (iii) One copy, receipted by the Auctioneer, is returned to the health service as proof of delivery to

auction and for reconciliation of proceeds. (iv) One copy remains with the health service as a permanent office record. 22(5/07)


Auctioneers Responsibilities The auctioneer will be required to: (i) Attach labels/stickers to the items identifying the area health service or hospital to which each piece

of equipment belongs. (ii) Assist the area health service or hospital to set reserves for each or any item if required. (iii) Allow a representative of an area health service or hospital to attend the auction to oversight the

process and record bids. (This may be appropriate if large receipts are anticipated.) (iv) Within 7 days of the auction provide an itemised account of all items sold or passed in. Transaction

advice should include the realised sale price for each item, total realised sale figure, commission deducted (in accordance with agreed figure) and cheque.

(v) Advise of items passed in and provide advice as to whether to re-list the items or dispose of the equipment in some other manner.

The Area Health Service/hospital/Ambulance Service then reconciles the proceeds schedule with their records to ensure all items are accounted for.

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APPENDIX 8-B SCOPE OF ENGAGEMENT (By Third Party Provider) “InTheShed” when engaged for the disposal of surplus equipment may offer the following services:

a) Storage/warehousing of surplus equipment [temporary and/or long term] b) Survey of equipment [Serviceability management] c) Repair of unserviceable equipment d) Cataloguing of surplus equipment e) Management of equipment disposal in accordance to agreed Public Health Organisation policies,

this includes:

• Redistribution to other NSW Health Public Health Organisation • Marketing, sales and/or auction of equipment suitable for resale • Transfer of equipment deemed unsuitable for resale or transfer to approved charities • Indemnification

Note: “InTheShed” has been authorised by Health Procurement, Health Support to utilise the existing “Health Procurement Bulletin Board System” to advertise surpluses identified at each project.

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APPENDIX 8-C ENGAGING INTHESHED ASSET MANAGEMENT P/L “InTheShed” may be engaged by contacting: Phil Clare InTheShed Asset Management P/L Mobile Number 0438 524747 P.O.BOX 16 RED ROCK, NSW 2456 Email: [email protected]

Authority/Agreement The Standing Offer Agreement enables each Public Health Organisation to establish individual agreements with “InTheShed” based on internal requirements but limited to the scope of the above engagement. This agreement should include the following:

Scope of the project Service fees – each Public Health Organisation that engages “InTheShed” is to negotiate and

agree on service fees/cost structure.

Notes on fees: a) Estimation of “cubic metres” may not be accurate where department opt to utilise the project as

an opportunity to “spring clean” b) Tip fees, destruction of equipment and hazardous waste disposal will be the Public Health

Organisation’s expense and will be costed at current commercial rates. c) Storage utilising central warehousing will be costed at current commercial rates.

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SUPPLEMENT 1 MANAGEMENT OF SURPLUS EQUIPMENT This agreement is to cover the period …………..and …………………… between: InTheShed Asset Management Pty LTD. And …………………………………………….Health Service/Public Health Organisation This agreement is governed by the terms of agreement between InTheShed Asset Management Pty Ltd. and the State Contract Control Board. Additional terms & conditions as agreed by both parties are listed below or attached on a separate sheet and signed by both parties. If none is listed or attached, it denotes that both parties agreed that additional terms and conditions are not required. SIGNED, On behalf of InTheShed Pty Ltd Signature____________________________________ Print Name:__________________________________ Date: __/__/__ SIGNED, On behalf of _________________________Public Health Organisation/Health Service Print Name:__________________________________ Date: __/__/__

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SUPPLEMENT 2

NON-DISCLOSURE AGREEMENT1 THIS AGREEMENT IS BETWEEN _________________________________ AND Intheshed Asset Management P/L (“Intheshed”) IT IS AGREED AS FOLLOWS: (A) Whilst “Intheshed” is in the process of managing surplus equipment in accordance to the agreement with the Public Health

Organisation, certain information of a confidential nature may need to be disclos ed or exposed in order that “Inthes hed” may use such information to complete the scope of the agreement.

(B) The Public Health Organisation is willing to disclose/expose such information on the basis that the information is protected

in the manner set out below. 1. Definitions

In this Agreement the following expressions shall have the following meanings:

The “Public Health Organisation” refers to the NSW Health Service/Organisation as identif ied in the first part of this agreement.

The "Purpose" shall include all discussions between the Public Health Organisation and “Inthe shed” in connection with the Purpose shown above.

"Confidential Information" sh all mean all information disclosed/exposed b y the Public Health Organisatio n t o “Intheshed” in connection with the Purpose, whether before or after the date of this Agreement, which is designated by the Public Health Organisation as confidential.

2. In consideration of the disclosure of Confidential Information, intheshed Australia Pty Ltd undertakes in relation to Confidential Information received from the Public Health Organisation or from a third party on behalf of the Health Service: “To treat the Confidential Information in confidence and to use only for the purpose defined above and in particular not to use the Confidential Information for any commercial purpose.”

3. Upon completion of the Purpose or upon request by the Public Health Organisation the receiving party shall: Return to the Public Health Organisation promptly all documents and materials (and al l copies thereof) containing the Confidential Information and certify in writing to the Public Health Organisation that it has complied with this Agreement.

Signed for and on behalf Signed for and on behalf “Intheshed” of the NSW Health Public Health Organisation SIGNATURE SIGNATURE NAME [please print] NAME [please print] _________________________ _________________________ TITLE TI TLE

_________________________ WITNESS-SIGNATURE

_________________________ WITNESS -NAME (print)

DATE ___/___/___

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1 Original document provided by Central Coast Health


SUPPLEMENT 3

AUTHORISATION This is to confirm that InTheShed Asset Management Pty Ltd [InTheShed] has been engaged by the ________________________________________________Health Service/Public Health Organisation for the disposal of surplus, obsolete and unserviceable equipment, in accordance with the requirements as stipulated in the NSW Health Purchasing & Supply Manual section 8.6 Chapter 8 and in accordance to the Standing Offer Agreement between the State Contract Control Board and “InTheShed”. This engagement authorises “InTheShed” specifically its authorised representatives to redistribute, sell and transfer equipment to other Public Health Organisations subject to an agreement being established/ negotiations being conducted by “InTheShed” for and on behalf of the abovementioned Public Health Organisation. It is understood that redistribution, transfer or sale of equipment is to benefit both organisations. Authorised PHO Representative Name: ___ _______________________ Position: ________________________ Signature: _______________________ Date: ___ / ___ / ____ PHO Contact for this engagement: _______________________ Phone:________________ E-Mail:_____________________________________________ “InTheShed” Contact for this engagement:___________________ Phone:________________ E-Mail: _____________________________________________

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SUPPLEMENT 4

Sample Letter Seeking Quote RFQ No.___________________________________________________________________________ Hospital:_____________________________________________________________________________ Offers closing at the above address not later than 9.30 a.m. are invited for the purchase and removal with all faults of any of the undermentioned items. Inspection of the undermentioned may be arranged between the hours of________________________ The submission of an offer will be taken as conclusive evidence that the tenderer has inspected the item/s. The highest, or any offer, will not necessarily be accepted. For further information: Telephone No. For CHIEF EXECUTIVE Quantity Description Price Offered DATED THIS………………………………………………………………………………… DAY OF ………………………………………………………………………………………………….20…….. SIGNATURE……………………………………………………………(PLEASE PRINT NAME) ADDRESS………………………………………………………………………………………………. TELEPHONE NO………………………………………………………………………………………..

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Sample Letter Accepting Quote Dear Sir/Madam, Your offer has been accepted for the purchase of goods set out hereunder. Payment must be made as shown below, prior to the removal of goods. The price quoted includes both purchase and removal of items with all faults, if any, and it is to be noted that the vendor will not be responsible for any defect. An official receipt will be issued when payment is made and this will be the only authority recognised to enable collection of the goods. The goods must be collected within fourteen days of the date of this letter. Yours faithfully, for CHIEF EXECUTIVE GOODS ACCEPTED PRICE LOCATION PAYMENT TO BE MADE TO: ADDRESS: MEANS OF PAYMENT: Cash or Bank Cheque. Private cheques will not be accepted.

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TABLE OF CONTENTS

CHAPTER 9 - GUIDELINES FOR THE ADMINISTRATION OF NSW GOVERNMENT TELECOMMUNICATIONS

A. Provision of Telephone and Data Telecommunications Services to Agencies........... 9.1 B. The Government Radio Network................................................................................ 9.2 C. Mobile Telephone and Other Contracted Services ..................................................... 9.4 D. Telecommunications Infrastructure and Asset Commercialisation ............................ 9.4 E. Government Telecommunications Policy................................................................... 9.6 F. Points of Contact ........................................................................................................ 9.6 G. Benefit to the Government.......................................................................................... 9.7 Telecommunications Infrastructure Ownership.................................................................... 9.7

CHAPTER 9 - GUIDELINES FOR THE ADMINISTRATION OF NSW GOVERNMENT TELECOMMUNICATIONS 9.1

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GUIDELINES FOR THE ADMINISTRATION OF NSW GOVERNMENT TELECOMMUNICATIONS (Premier’s Memo. 93/45) As part of the Government’s telecommunication strategy, the Government has entered into contracts for telephone, data, radio and other telecommunications services which will provide it with direct savings of more than $280 million over the next ten years. These contracts are administered by the Commercial Services Group’s Telecommunications Unit (the “Telecommunications Unit”). In addition the Government’s strategic initiatives will gain major state development and industry benefits valued at over $2 billion. To ensure these benefits are realised, the following guidelines apply to all NSW Government agencies, including departments, administrative offices, statutory bodies representing the Crown, electricity county councils and all other public and proclaimed authorities including any state-owned corporation (“Agencies”). A. Provision of Telephone and Data Telecommunications Services to Agencies

In November 1992 the Government executed a whole-of-Government ten year Telephone and Data Network (“TDN”) Agreement with BT Australasia Ltd (“BT”). This agreement requires BT to establish the TDN and to be the provider of telephone and data services to the Agencies.

Accordingly:

(i) Each Agency shall use the TDN for telephone and data services in accordance with

the TDN Agreement and shall (if H has not already done so) enter into an Agency Service Agreement with BT within two weeks of receipt of these guidelines. Agencies shall not enter into or renew or extend any existing contracts with Telecom, Optus, eligible service providers, resellers or any other licensed carriers for telecommunications services (being typically telephony, intelligent network, satellite services, data services, leased lines and bearers) without the prior approval of the Telecommunications Unit.

(ii) Where a new telephone or data service or a service determined by the TCU to be an

equivalent service, is provided by BT in accordance with the TDN Agreement, then an Agency shall use that service in preference to that offered by any other provider.

(iii) The establishment of the TDN and the connection of Agency sites to the TDN will

involve a rearrangement of each Agency’s telecommunications service contracts. To ensure the orderly administration of these contracts and to meet the Government’s Strategic Partnership Agreement contractual obligations with Telecom and to rationalise billing and ordering, BT shall progressively take over the administration of these contracts for each agency site. The Telecommunications Unit will co-ordinate the progressive transfer of existing Agency contracts to BT and monitor their administration.


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Therefore, to effect the overall co-ordination of each Agency’s telephone and data communications, Agencies shall within 60 days of receiving notice from the Telecommunications Unit provide to BT all carrier and related contracts for the telecommunications services specified in the notice. BT will take responsibility for administration and payment of and Agency billing for those contracts immediately it accepts them.

(iv) Any new Agency, however established or incorporated, must (within two months of

establishment) enter into an Agency Service Agreement with BT.

(v) Each Agency shall use its best endeavours to connect to the TDN without any undue delay.

(vi) Agencies shall ensure that the telecommunications interface of any customer

switching systems (including customer premises equipment and networks) such as:

• PABXs • local area networks • network terminating units • modems • multiplexers • voice compression devices • encryption devices

for which they are responsible or which is on their premises is compatible and capable of inter-working with the TDN and is compliant with all Australian and international standards as required by Australian law.

(vii) The Telecommunications Unit will issue TDN technical interface and operational

guidelines from time to time and each Agency shall ensure that all Agency equipment acquired thereafter meets the specifications set out in those guidelines.

(viii) Where an Agency appoints an external telecommunications consultant or contractor

to consult on or to establish or install the Agency’s telecommunications requirements, the Agency must inform the consultant or contractor of these guidelines and ensure that any subsequent implementation of that external advice is consistent with the Government’s strategies and contractual obligations for telephone and data telecommunications as notified to the Agency by these guidelines or by the Telecommunications Unit from time to time.

(ix) An agency shall not participate in any pre-selection ballot by Austel for mobile or

other basic carriage services. All ballot responses by Agencies will be co-ordinated by the Telecommunications Unit.

B. The Government Radio Network

In February 1993 the Government entered into an agreement with Telecom for the installation and operation of a Government owned radio communications network (“GRN”) to cover the greater Newcastle/Sydney/Wollongong region - and the Queanbeyan-Camden, Orange-Penrith and Muswellbrook-Newcastle population corridors. The GRN is capable of supporting both mobile and other radio applications and may be expanded to cover additional areas, depending on Agency requirements and capital funds availability.


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A Joint Management Board has been established to oversee the operation of the GRN.

The Joint Management Board (which includes representatives from the major user agencies) will work closely with the New South Wales Government Telecommunications Authority and the Telecommunications Unit to:

(i) administer the GRN’s infrastructure;

(ii) supervise the structure and efficiency of radio networks used (or to be used by

Agencies;

(iii) ensure no unnecessary duplication of radio systems.

Accordingly:

(i) where any Agency wishes to use radio services within the area of the GRN then:

a) the Agency shall use the GRN for radio applications (both mobile and non-mobile) and shall enter into an Agency Service Agreement for the provision of radio network services and products with Telecom or such other suppliers or operators as notified to the Agency by the Telecommunications Unit.

b) the Agency shall use its best endeavours to connect to the GRN without

undue delay and in accordance with Agency migration plans.

c) any Agency radio network technical or commercial matters should be referred to the Joint Management Board.

(ii) Agencies shall ensure that any customer switching systems (including customer

premise equipment, networks or devices) such as:

• radio transceivers • computer aided despatchers • data terminating equipment • meter monitors • encryption devices • radio base stations and repeaters

for which they are responsible or which are on their premises and which are required for or will be used in radio applications, are compatible and capable of inter-working with the GRN and comply with all Australian (such as Austel) and international standards as required by Australian law.

(iii) The Telecommunications Unit will issue technical interfaces and operational

guidelines for the GRN from time to time and each Agency shall ensure that Agency equipment acquired thereafter meets the specifications set out in those guidelines.

(iv) Agencies shall not enter into any contracts or renew or extend any existing contracts

for radio network services without the prior approval of the Telecommunications Unit.


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(v) Where an Agency appoints an external radio network consultant or contractor to consult on or establish or install the Agency’s radio network requirements, the Agency must inform the consultant or contractor of these guidelines and ensure that any subsequent implementation of that external advice is consistent with the Government’s strategies and contractual obligations for the GRN as notified to the Agency by these guidelines or by the Telecommunications Unit from time to time.

(vi) These guidelines apply to the Government’s general radio requirements and are not

intended to apply to microwave bearer systems, relationships with commercial broadcasters or scientific or research applications.

C. Mobile Telephone and Other Contracted Services (including cellular telephone and

paging networks, but excluding customer premise equipment maintenance)

The Government regularly reviews and allocates its cellular telephone and other telecommunications network services to achieve cost savings and to encourage and stimulate the telecommunications industry in New South Wales.

As part of this process, the Telecommunications Unit will review annually the Government’s contracts with Telecom, Optus, Vodafone, other eligible service providers, resellers and other organisations for cellular telephone and other services. Agencies shall not enter into or renew or extend any existing contracts with these or any other organisations for such services without the prior approval of the Telecommunications Unit

Accordingly:

(i) On receiving notice from the Telecommunications Unit and subject to any existing

contractual arrangements, all Agencies shall, within two months of that receipt, enter into an Agency Service Agreement for the provision of cellular telephone and other services with the suppliers or operators as notified to the Agencies by the Telecommunications Unit.

(ii) Any new Agency, however established or incorporated, must (within two months of

establishment) enter into an Agency Service Agreement which has been notified under i) above.

D. Telecommunications Infrastructure and Telecommunications Asset Commercialisation

The objectives of the New South Wales Government Telecommunications Authority (Section 4 of the Government Telecommunications Act 1991 (NSW)) (the “Act”) are as follows:

(i) to integrate the various telecommunications networks of Agencies and to provide for

the common carriage of Agencies’ communications (the “Integrated Telecommunications Network”);

(ii) to establish a New South Wales Government Telecommunications Authority (the

“Authority”) and to vest in that Authority as agent for the Government the Integrated Telecommunications Network and its control and management;


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(iii) to enable the Government (through the Authority) to operate and maintain the Integrated Telecommunications Network in an efficient and economical manner;

(iv) to enable the best commercial advantage to be obtained from any excess capacity of

the Integrated Telecommunications Network;

(v) to enable Agencies to obtain the best possible commercial advantage from any infrastructure or facilities of the Integrated Telecommunications Network required by operators of the public telecommunications networks and other licensees.

To ensure overall co-ordination of the commercialisation of the Government’s telecommunications network services (whether through an Agency selling, leasing or renting those services), each Agency shall inform the Authority of its intention to sell, lease or rent those services and the Agency shall provide complete details of any such proposal prior to the commencement of contractual negotiations (refer to Sections 49 to 54 of the Act).

Subject to Section 23 of the Act, and in accordance with Section 24 of the Act, where an Agency intends to establish, renew or extend a telephone or data service network at a cost greater than $500,000 (or in the case of a radio or microwave network, at a cost greater than $20,000), the Authority requires that the Agency’s submission seeking the Minister’s approval to proceed with that proposal:

(i) demonstrates that the TDN, GRN, Government cellular telephone or any other

telecommunications service arrangements which may arise from time to time cannot support the Agency’s requirements;

(ii) provides total costing details based on Australian Accounting Standards Principles

and Practices and Treasury requirements or any other requirements as notified by these guidelines or by the Telecommunications Unit from time to time. Those costings must be sustained and supported by either quotation/ tender or expert consultant assessment;

(iii) ensures that the proposed telecommunications systems, equipment, networks and

infrastructure are compatible and capable of inter-working with the TDN, GRN and Government cellular telephone service arrangements. The Agency shall provide a statement of the standards applied by it to assess that compatibility and capability, Australian (Austel or Standards Australia) and/or international;

(iv) ensures that the proposed project complies with the relevant Commonwealth and

NSW Government Telecommunications Acts, Regulations, Directives and Directions, Austel’s regulations and requirements and such other regulatory standards as notified to the Agency by these guidelines or by the Telecommunications Unit from time to time;

(v) provides comprehensive network details (including location information); and

(v) demonstrates that the Agency has evaluated: (a) the extent of Government

telecommunications network services available to it in connection with its proposal and the possibility of using those services, where appropriate; (b) whether it is able to use telecommunications infrastructure controlled by another Agency; and (c) whether it is able to share the capital cost of the proposal with another Agency (including the Authority).


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Copies of the Act are available from the NSW Government Information Service. E. Government Telecommunications Policy (Regulatory and Radio Spectrum)

The Telecommunications Unit is also responsible for representing the following aspects of telecommunications on behalf of the Government:

- liaising with the Commonwealth Department of Transport and Communications;

- liaising with the Spectrum Management Authority regarding radio spectrum licensing

and other radio telecommunications regulatory matters;

- liaising with Austel regarding regulatory matters and technical standards;

- liaising with telecommunications standards organisations including Standards Australia;

- liaising with organisations representing the telecommunications industry including

the Australian Telecommunications User Group and Radio Communications Consultative Council.

Agencies wishing to make representations, applications and other submissions to the above organisations shall consult with the Telecommunications Unit prior to making any such representation, application or submission.

F. The Telecommunications Unit, Joint Management Board and the New South Wales

Telecommunications Authority points of contact are as follows:

(i) For telecommunications policy, regulatory matters and strategy issues relating (but not limited) to infrastructure, telephone, data and radio network matters:

Mr Gary Donald Director Telecommunications Unit (Commercial Services Group) Level 11 1 Francis Street Darlinghurst, 2010 New South Wales Telephone: (02) 339 7701

(ii) For technical and engineering enquiries:

Mr Stephen Smith Director Engineering, Telecommunications Unit Telephone: (02) 339 7771

(iii) For Joint Management Board commercial, legal and general radio matters:

Mr Robert Wheeler Director Commercial Operations, Telecommunications Unit Telephone: (02) 339 7759


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(iv) New South Wales Government Telecommunications Authority:

Mr Gary Donald Level 11 1 Francis Street Darlinghurst, 2010 New South Wales Telephone: (02) 339 7771 Facsimile: (02) 339 7700

G. Benefit to the Government

The initiatives outlined in these guidelines and your efforts in ensuring the co-operation of your Agency will contribute to the New South Wales Government achieving the savings and state development benefits provided for in the Government’s telecommunications contracts.

(Note: These guidelines replace previous Directives 90-66 and 91-22.)

TELECOMMUNICATIONS INFRASTRUCTURE OWNERSHIP A recent discussion with Austel, the Australian Telecommunications Authority, has brought to the Department’s attention the problems of infrastructure ownership and internal cable installations within the hospital campus. A Deregulation of Customer Cabling took place on 1 January 1989. At that time ownership of all cables within buildings beyond the Network Boundary (Main Distribution Frame or first socket) passed to the property owner. External cabling on private property, installed prior to 1 January 1989, is a different matter. Under Section 90 and 91 of the Telecommunications Act 1991. Telecom continues to own these cables and the associated ducts, pits and pillars unless a Transfer of Ownership has been negotiated. It does not matter that the infrastructure was paid for in a commercial agreement or that the sites are paying maintenance on the cable plant. Whilst Telecom retains ownership of these external facilities, only Telecom staff are authorised to carry out work within them, even though some cables may be owned by the site (i.e. installed after 1/1/89). Consequently if any member of staff, or a third party contractor interferes with this cable plant, then that person is liable to prosecution under Section 95 of the Telecommunications Act 1991. It is therefore essential that the Transfer of Ownership agreement be formally completed for each of the hospital sites in the Area/District. This agreement sets out the extent and limitations of Telecom’s responsibility for the servicing of the properties occupants, and places access to cable infrastructure on a landlord/tenant basis. Large complexes, such as hospitals, may have a number of separate properties and each of these sites may need a separate transfer agreement. The cost of transfer is individually negotiated on a site by site basis. The cost of transfer is generally a token amount.

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