Your procurement questions, answered

Procurement is the process of acquiring the goods and services an organisation needs from outside suppliers, at the best total cost considering quality, quantity, place, time, and price. In practice it runs end to end: working out what you need, going to the market, choosing a supplier, and managing the contract through to delivery and payment.

It usually runs through five stages: needs analysis (what do we need, and what are the risks), requirements (the specification and how you will judge offers), supplier selection (going to market and evaluating responses), contract (award and terms), and order (delivery, performance, and payment).

In WA local government, public tenders must generally be invited once the value is expected to be more than $250,000 (ex GST), under Regulation 11 of the Local Government (Functions and General) Regulations 1996. Below that, seeking quotes is usually enough, and you cannot split a purchase into smaller contracts to get under the threshold. Some purchases are also exempt (see the preferred supplier and exemptions question below).

A Request for Tender (RFT) asks suppliers to bid against a defined specification, so offers are largely compared on price and compliance. A Request for Proposal (RFP) invites suppliers to give input on the specification and propose a solution to a problem, which makes proposals more subjective to evaluate. In short: an RFT when you already know what you want, an RFP when you want suppliers to propose how to achieve the outcome.

A Request for Quotation (RFQ) is the lighter-touch approach for lower-value or lower-risk purchases, usually seeking a price against a clear, simple requirement. A Request for Tender (RFT) is the formal process used above the tender threshold or for more complex work. The rule of thumb is to match the level of process to the value and risk of what you are buying.

An Expression of Interest is used early in a procurement to explore market interest and prequalify suitable suppliers, as the first stage of a two-stage selection process. It can set the compliance and qualitative criteria suppliers must meet to be shortlisted, so only capable suppliers are then invited to submit a full tender.

Both are early steps but do different jobs. An Expression of Interest (EOI) is a prequalification step used to shortlist suppliers for the next stage of a two-stage selection. A Request for Information (RFI) is purely information gathering to understand the market; it is not used to select or shortlist a supplier.

A quotation is a simple offer to provide goods or services against a clear requirement. A tender is a formal offer made in response to a Request for Tender. A proposal is where the supplier is invited to give input on the specification and propose a solution, which makes proposals more subjective to evaluate than quotations or tenders.

Start with a procurement plan: confirm what you need, do some market analysis, set your evaluation criteria, and run a risk assessment before you go to the market. A bit of structure up front keeps the process smooth and the offers comparable.

A statement of requirements is the documented need: what a product or service should be or do, including both the scope and the detailed specification. A clear one helps suppliers understand the job, produces better and more comparable offers, and prevents most of the misunderstandings that derail contracts later.

A statement of requirements captures the overall need, including the scope and the specification, and often covers an ongoing operational requirement. A scope of work is a chronological description of the work to be performed, and it usually relates to a one-off project rather than ongoing operations.

Begin with a quick risk rating to decide how much scrutiny the purchase needs. Higher-risk or higher-value work warrants a full risk assessment; lower-risk work can use a simpler desktop review. The key is to identify risks early and plan how to mitigate each one, often through the contract terms, the specification, or the evaluation.

A Key Performance Indicator (KPI) is a single benchmark used to measure whether performance meets a set criterion. A Service Level Agreement (SLA) combines several KPIs to measure a broader service standard, typically in service contracts. Include them whenever performance matters and can be measured, so expectations are clear and you can manage the contract objectively.

Value for money is not the same as the cheapest price. It considers the efficiency and effectiveness of a purchase and the total cost over the life of the contract, alongside public-sector values such as open competition, ethics, and accountability. The best-scoring bid and the lowest price are not always the same thing.

Sustainable procurement means using your buying power to weigh economic, environmental, and social factors, not just price. Drawing on the widely used UNEP definition, that covers value for money and quality, the environmental impact of a product or service across its whole life cycle, and social effects such as fair labour conditions. It reflects the Local Government Act's aim of balancing environmental protection, social advancement, and economic prosperity, and is treated as best practice.

A preferred supplier is one prequalified to supply particular goods or services, and a panel is a group of preferred suppliers set up for a category; where one exists you may be able to seek quotes without a fresh tender. Some purchases are also exempt from public tender, for example genuine emergencies, buying through WALGA's Services Programme or another government body, or where there is genuinely only one supplier. The thresholds and rules change over time, so confirm what currently applies.

Offers are assessed against evaluation criteria set before going to market. Where some criteria matter more than others, differential weightings are applied (adding up to 100%), and a minimum quality cut-off can be set. An evaluation panel scores and reaches a consensus, which keeps the decision fair, consistent, and defensible.

Probity means running the process to the highest standards of integrity, consistency, and accountability. In practice: treat all tenderers equally and fairly, keep submissions confidential, disclose any conflict of interest, and be able to justify decisions. In local government it also means acting in line with the Local Government Act.

Yes, usually with the preferred tenderer, using the evaluation results as the starting point. It should follow a negotiation plan with clear goals, and works best as a win-win where both sides are comfortable, rather than hardball tactics that damage an ongoing relationship. Other tenderers are not ruled out until a contract is awarded.

Yes. Good practice is to offer every unsuccessful tenderer a debrief. The purpose is constructive: to explain how their submission performed against the criteria so they can improve next time. It is not a negotiation, and other bidders' details are never shared.

Common ones include lump sum (a capped, fixed price, sometimes paid at milestones), schedule of rates (itemised rates when quantities are hard to predict), bill of quantities (used in construction), cost reimbursable (costs paid to a ceiling), and incentive or risk-and-reward models (a target cost with a profit share for good performance). The right one depends on how well the work can be defined and priced up front.

Contract management is the work after signing: making sure the supplier delivers to the agreed scope, performance, and timeframes, and that issues are picked up early. A formal kick-off meeting to align both sides at the start sets the tone, and the order cycle (ordering, receipt and inspection, then payment) runs through the life of the contract.

A contract can end when it reaches its value, expiry date, or term, or if it is terminated. It can only be extended if it included options to renew that have not yet been used; once those run out, the work generally needs to be reviewed and re-tendered.