Policy:
Procurement Policy
Updated: June 2020
Next review: July 2023
Number: 3.1
Procurement Policy June 2020
Purpose
1. The purpose of this policy is to provide a framework for REA’s procurement,
contracting and contract management of goods and services.
Scope
2. This policy applies to all staff of REA, including contract and temporary staff. This
policy also applies to third parties that are engaged by REA to conduct or assist with
procurement.
3. This policy encompasses all procurement of goods or services from all individuals and
organisation.
4. The term procurement is used throughout this policy however the term purchasing is
equally applicable and is interchangeable. Procurement covers all aspects of acquiring
and delivering goods & services. It starts with identifying the need and finishes with
either the end of a service contract or the end of the useful life and disposal of the
asset.
Background
5. As a Crown Agency, REA is required to apply the Government Procurement Rules
(Rules)
6. Through these Rules, the Government seeks to support broader social, economic,
cultural and environmental outcomes, as well as continuing to represent the
government’s standards of good practice during the procurement process.
7. The Rules are to be read alongside the Principles of Government Procurement
(Principles) and, the Government Procurement Charter (Charter)
8. The five Principles are:
• plan and manage for great results
• be fair to all suppliers
• get the right supplier
• get the best deal for everyone and
• play by the rules.
9. The Charter sets out Government’s expectations of how agencies should conduct
their procurement activity to achieve public value.
10. A full list of the Rules, as well as further information on the Principles and Charter
can be found at
https://www.procurement.govt.nz/procurement/principles-charter-and-rules/
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11. The Government Procurement Charter directs Agencies to:
• Seek opportunities to include NZ Business
• Undertake initiatives to contribute to a low emissions economy and promote
greater environmental responsibility.
• Look for new and innovative solutions
• Engage with Business with good employment practices
• Promoter inclusive economic development within NZ
• Manage risk appropriately
• Encourage collaboration for collective impact (across agency & across
business).
Policy Statement
12. All REA procurement activities must meet the requirements of this policy and
associated procedures.
13. All decisions and authorisations are required to be made by a person holding an
appropriate financial delegated authority in accordance with REA’s financial
delegations.
14. Where Government approved collaborative contracts and supplier panels are in place,
REA must purchase from All of Government contracts unless there is a good reason
not to.
15. Irrespective of the type of procurement being made, purchasing decisions and
authorisations must be in accordance with the delegated authority of the person
making the decision.
16. The selection of the correct procurement method is a key decision in any
procurement. Procurement processes must follow recommended procurement
method selection as per the decision-making flow chart (Appendix 1)
17. All staff members (and third parties involved in the process) must declare to their
manager any personal interest that may affect, or could be perceived to affect, their
impartiality in any aspect of their work.
18. All commercially sensitive information provided by existing and potential suppliers
during the process (e.g. price information, intellectual property, etc.) must be treated
appropriately including not being disclosed to any third party, including other REA
staff, who are not required to know unless required under legal obligations (e.g.
Official Information Act).
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19. Documentation appropriately tailored for the type and method of procurement must
be retained and filed in REA’s document management system. This documentation is
required to provide an audit trail on the activity undertaken, including the
independent review/sign off by the authoriser.
Delegated Authority
20. All decisions and approvals in a procurement are required to be made by a person
holding an appropriate financial delegated authority in accordance with REA’s
financial delegations. 1.1 Delegated Authority Policy.
21. The key approval points in a procurement are:
• Authority to commence procurement (assurance that a budget is allocated)
• Approval to release tender documentation (via a procurement plan)
• Approval of evaluation recommendations
• Authority to enter into contract
• Authority to make payments on invoices
22. The supply of the goods or services must not commence until the contract has been
approved and signed. Commencing supply of the goods or services prior to the
contract being agreed may create a contractual situation even when a formal
contract has not been signed.
23. Any proposed contract for the supply of goods & services must be reviewed by the
Head of Corporate Services. If the contract is not a Government approved
collaborative contract (e.g. AoG, Common Capability or syndicated) and the value
exceeds the value of SLT delegated authority, legal advice must be obtained.
24. Where procurement costs exceed approved business plan budgets, additional
approval must be obtained by a person with the appropriate delegated financial
authority as soon as the likely cost overrun is identified and before any activities are
undertaken outside of the originally approved budget. If the budget overrun means
the total cost exceeds the original approving person's financial delegation, then
approval for the revised costs and the associated contract variation must be obtained
from a person with sufficient financial authority for the entire amount (i.e. original
budget plus additional cost over runs).
Exclusions, exceptions and exemptions to this policy
25. The following exceptions and exemptions apply to this policy as deemed not to be
procurement activities:
• Employing staff (excluding the engagement of contractors or consultants)
• Gifts, donations and unconditional grants
• Investments, loans and guarantees
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26. Where it is considered that an exception or exemption to this policy applies to a
specific procurement, the reasons and supporting information must be documented
in detail and approved by the Chief Executive.
Breaches of this Policy 27. If a breach of this policy occurs, the manager and/or Chief Executive must be notified
immediately. The manager and Chief Executive will take the necessary action to
mitigate risk to REA, external organisations and/or to individuals. If the breach is
deemed serious, the matter will be escalated to the Chair of REA’s Audit and Risk
Subcommittee, who will take appropriate action.
28. If a user is found to have breached this policy, either intentionally or unintentionally,
action appropriate to the seriousness of the breach will be taken. Action may range
from censure through to dismissal and criminal prosecution.
Monitoring and Review 29. The Head of Corporate Services is responsible for maintaining this policy and it will
be regularly reviewed to confirm it conforms to Government legislation and REA
policies.
Policy review date 30. The policy will be formally reviewed by the Head of Corporate Services at least every
three years, with interim revisions as required to meet operational, organisational
and legislative needs.
Authorisation
……………………………………………………………………
Denese Bates QC
Board Chair Date: 12 August 2020
Appendix 1: Procurement Decision Making Flow Chart
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Related policies that may impact on, or be impacted by this policy:
1.1 Delegated Authorities Policy
2.1 Sensitive Expenditure Policy
2.7 Capital Expenditure Policy
7.7 Personal Gain Through Employment Policy
Related document that may impact on, or be impacted by this
policy:
1.0 REA Project Governance Framework
Project Governance Framework
July 2020
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Appendix 1: Procurement Decision Making Flow Chart
Note: as a Crown Agency, REA is required to apply the Government Procurement Rules
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