Summary of Procurement Policy

Overview

Horowhenua District Council (HDC) uses different methods of procurement depending on the total cost and/or risk of the project or service.

Procurement Policy

Horowhenua District Council's Procurement Policy was adopted by Council in April 2014.  Procurement of goods and services are to be made in accordance with the following methods:

  • All procurement activity will be authorised in line with HDC's delegated financial authorities
  • Approved procurement methods will be determined by the value and risk of the procurement. The values are aligned to the NZTA Procurement Manual. The risk will be assessed through a simple questionnaire for all procurements valued >$30,000. The value / risk profile is defined as follows:
  • Low value procurement – this is where there is little or no risk and the value of the procurement is less than $30,000. In most cases the goods or services will be provided by a preferred supplier as specified by the Category Manager. 
  • Simple procurement – this is where there is some risk and value is >$30,000 and <$100,000. In this case the standard procedure is three quotes from preferred or panel suppliers but managers may recommend another model (e.g. an open tender or direct award to a high performing supplier). 
  • Complex procurement – this is for high risk and/or procurements valued at over $100,000. This is a full process starting with a procurement plan endorsed by the Procurement Review Group and approved by the appropriate delegated authority. 
  • Note – the value is the total potential value of the contract, ie if it is valued at $25,000 per annum and it's a three year contract then the procurement value is $75,000. 

Procurement Methods

Horowhenua District Council will select suppliers using methods detailed in NZTA's Procurement Manual.

Using the NZTA manual will help ensure HDC is consistent across the organisation, is using best practice and using methods that are approved by NZTA for NLTP funded or subsidised activities.

HDC will generally use the Price Quality Method (PQM) but recognises that in some instances a price only or quality only method will deliver better Value for Money. The recommended methods will be detailed in the procurement plan.

HDC will include the option to use panel and preferred supplier arrangements across all categories. For guidance options include:

  • a) Direct award to a new supplier on receipt of complying quote – Low Value Procurement only 
  • b) Direct award to a pre-approved, preferred or panel supplier on receipt of complying quote – Low Value or Simple Procurement 
  • c) Closed ('Limited Invitation') competitive process – Simple or Complex Procurement < $200,000 
  • d) Open competitive process ('Public Tender') – Complex Procurement >$200,000. 

These are a guide only and each procurement should be considered on its merits, eg there will be no value in open competition in cases of limited supply or specialist suppliers.

Value for Money (VfM)

Horowhenua District Council will follow the Office of the Auditor General's definition for VfM in procurement which is:

  • Value for money means using resources effectively, economically, and without waste, with due regard for the total costs and benefits of an arrangement, and its contribution to the outcomes the entity is trying to achieve. 
  • In addition, the principle of value for money when procuring goods or services does not necessarily mean selecting the lowest price but rather the best possible outcome for the total cost of ownership (or whole-of-life cost). 
  • Value for money is achieved by selecting the most appropriate procurement method for the risk and value of the procurement, and not necessarily by using a competitive tender. 

Enquiries

For enquiries regarding Horowhenua District Council's Procurement Policy, please email enquiries@horowhenua.govt.nz