• Procurement policies and preferences

    Contractors can be assured that Building Management and Works (BMW) is committed to operating in a fair and transparent manner. Outlined below are relevant policies and preferences that may effect how BMW makes procurement decisions. It is recommended that contractors make themselves aware of these policies, in order to ensure they are in the best position to maximise any potential benefits.

    Buy Local Policy

    BMW incorporates the requirements of the Government’s Buy Local Policy into quotes and tenders to support local and regional businesses, registered Aboriginal enterprises and Aboriginal people.

    The Buy Local Policy is not applied when it is in conflict with trade or government procurement agreements entered into by the Commonwealth Government, such as when a bid is received from another Australian State or Territory, New Zealand or a country with which Australia has a Free Trade Agreement, where Government procurement is included in the agreement and the contract value is over a certain amount.

    Regional price preferences

    The Buy Local Policy includes criteria that businesses must meet to claim two price preferences: the regional business preference and the regional content preference.

    Businesses that can demonstrate in their tender that they meet either or both requirements may be considered more favourably when the bid is evaluated through the application of price preferences.

    These price preferences can reduce the tender price for the purpose of evaluation, meaning that the tender will be evaluated considering the reduced price. If a business wins a contract based on price preferences, that contract would still be awarded at the original tendered price.

    Regional content preference

    Tenders for a regional contract using local suppliers or local subcontractors (from the area prescribed in the tender), may be evaluated as if the price of those goods purchased from local suppliers and local subcontracting work in the tender is reduced by five percent.

    The maximum amount of money BMW will reduce from the value of this regional content in a tender is $250,000.

    Regional business preference

    Regional businesses may be eligible for the total cost of a tender to be reduced by five percent for evaluation, if:

    • they maintain a permanent operational office within a certain distance from the delivery of the delivery of the contract (this will be prescribed in the tender)
    • an office has been established and business has been conducted from that office for at least six months prior to tender release
    • the business is either registered or licensed to operate within Western Australia
    • the tender demonstrates that the business will manage/deliver the majority of the contract outcomes from that office.

    The maximum amount of money BMW will remove from the total cost of a tender is $250,000.

    Example of how BMW would apply a regional price preference

    A tender for a BMW contract is called in Geraldton (Zone 3, prescribed distance 400km). Compliant bids are received from a regional business within the prescribed distance (which is 400km for work in Geraldton) and a Western Australian business outside the prescribed distance. Both bids claim regional content.

    There is no imported content.

    Bid A of $1,000,000 is received from a business in Geraldton. The five percent regional business preference applies to the total bid as the business is within the contract prescribed distance (400km from Geraldton).

    Additionally, this regional business will use other businesses within the prescribed distance in the delivery of the contract to the value of $500,000. The value of this portion of the bid ($500,000) represents regional content. The regional content preference of five percent is applied to this portion of the bid.

    Bid B of $990,000 is received from a Western Australian business in Perth.

    This business will use a regional business in Geraldton valued at $490,000, in the delivery of the contract. The value of this portion of the bid ($490,000) represents regional content. The five percent regional content preference is applied to this portion of the bid.

    The preferences are applied as follows:

    Bids received   Preferences   Adjusted price for comparative evaluation only  

    Bid A
    $1,000,000
    WA regional business in Geraldton and therefore within the prescribed distance

    Regional business preference
    Less 5% of $1,000,000 = $50,000
    Regional content preference
    Less 5% of $500,000 = $25,000

    Bid = price – regional
    = $1,000,000 - $75,000
    = $925,000

    Bid B
    $990,000
    WA business in Perth and therefore outside the prescribed distance

    Regional business preference
    Not applicable
    Regional content preference
    Less 5% of $490,000 = $24,500

    Bid = price – regional
    = $990,000 - $24,500
    = $965,500

    Bid A is the lowest adjusted price for comparative evaluation. If successful, the contract award price is $1,000,000.


    Imported content impost

    If a bid includes goods, services or other items that are sourced directly from overseas then BMW may evaluate the bid for tender as though the proportion of the price that comprises this imported content has increased by 20 percent.

    This impost is not applied to content imported from New Zealand and, in certain circumstances, to content from the United States, Chile, Japan and Korea.

    Respondents are required to declare any goods, services and other items that they directly import or intend to import to deliver the contract outcomes.


    Value for money

    When BMW evaluates bids for tenders, a range of factors are considered to determine whether the bid for tender achieves value for money. This means that BMW assesses both cost and non-cost factors when selecting a supplier to deliver works. Stated below are some examples of cost and non-cost factors.

    COST FACTORS

    • Initial construction costs
    • Maintenance costs
    • Usage costs

    NON-COST FACTORS

    • Fit for purpose
    • Technical and financial issues
    • Supplier capability
    • Sustainability
    • Availability of maintenance, service and support
    • Compliance with specifications
    • Ease of inspection, communication and delivery
    • Past performance

    Open and effective competition

    BMW ensures suppliers are provided with fair access to opportunities to work and acts with transparency and with integrity. This means that BMW:

    • uses consistent methods for approaching the market and entering into contracts, and chooses the most appropriate method based on the estimated price and risk of the work
    • will generally publish submitted prices for construction tenders valued above $300,000 within ten days of the closing date
    • will publish information on the successful contractors for contracts estimated to cost greater than $50,000 (GST inclusive)
    • will notify all businesses that submit tender bids of the outcome of the process
    • will provide feedback to unsuccessful respondents, upon request.

    The table below outlines the thresholds that BMW uses when determining the type of procurement method to use for contracts.

    Monetary Threshold [1] Minimum Requirements for Contracts
    Up to $5,000 Direct purchase or 'do and charge'
    $5,001 - $20,000* Request sufficient verbal quotations
    $20,001 - $250,000* Request sufficient written quotations
    Above $250,000 Open tender through a public advertisement

    * Or direct purchase up to $50,000 if in accordance with the Direct Purchasing Framework.

     [1] Monetary thresholds are based on the total estimated price, including any extension options, and are inclusive of GST.

    When requesting quotes, BMW takes into account market conditions and the number of suppliers available to provide particular goods or services. In general,  between two and five quotations are considered to be sufficient.

    The term verbal quotations refers to a more informal process of seeking information from potential suppliers. However, all information received and decisions made must be formally documented.

    Naming brands in tenders

    To make tender and quote documents clearer, BMW will sometimes describe the type of performance and quality required from a particular item (for example, an air conditioner) by referring to a brand item (specification by example). This does not mean that that brand is mandated as part of the tender – other brands which function in a similar way may be included in the submitted tender.

    BMW's preference is to reference generic products and where this isn’t possible, to mention Western Australian brands.

    Probity and accountability

    BMW acts ethically, honestly and fairly when approaching the market, entering into contracts and managing contracts. In addition, BMW is able to publicly account for all decisions. This means BMW:

    • does not disadvantage or advantage one supplier over another
    • keeps supplier information confidential
    • communicates with suppliers consistently
    • is clear about who is responsible for decisions
    • maintains adequate records
    • complies with BMW and Government policies.

    Relevant legislation

    Public Works Act 1902

    Building Services (Registration) Act 2011

    Occupational Safety and Health Act 1984

    Planning and Development Act 2005