Quotation Procedure

Document Number000948
Date Approved14 October 2011
      

1.      Context

This procedure supports the University's Procurement Policy [000946] and outlines the process which must be followed for the procurement of all goods and services for the University of Newcastle valued up to $150,000, regardless of the source of funding.  This includes capital works for the construction and improvement of facilities, IT projects and infrastructure as well as professional services and independent contractors.

This procedure should be read in conjunction with the Procurement Policy [000946] as well as the Purchasing Procedure and Tender Procedure [000947].


2.      Relevant Definitions

In the context of this document:

bid shopping means the practice of playing one potential supplier or bidder against another to obtain a lower price, either before or after the submission of a quotation or tender;

procurement means the overarching activities and processes undertaken to acquire goods and services for the University;

purchasing means the process of ordering and receiving goods for the University; and

quotation means an offer, either written or verbal, made in response to a selective invitation to supply specified goods or to perform a specified service up to the threshold value of $150,000 (GST exclusive); and

Request for Quotation (RFQ) means the procurement method used by the University when detailed specifications of a good or service are known and competitive bids are to be evaluated mainly on price.


3.      Procedure 


Pre-approval of expenditure

i. Purchases should be pre-approved by a duly authorised delegate in accordance with the Delegation of Authority Policy [000038]. 

ii. University staff members who make purchases or approve expenditure on behalf of the University must do so within an approved source of funds.  Any staff member who incurs expenditure beyond or without an approved source of funds is accountable for that expenditure.

iii. For the engagement of professional consultants and independent contractors (regardless of value), the procurement strategy should be considered and developed in conjunction with Commercial Services then approved by an authorised officer(s).  

iv. Certain types of purchases are subject to prescribed controls as outlined in the Purchasing Procedure and staff should consider any special requirements as part of the quotation process.

Quotation thresholds

v. A competitive quotation process will be conducted for the procurement of all goods and services valued up to $150,000 (GST exclusive) to ensure the University obtains best value for money consistent with the principles outlined in the Procurement Policy [000946]. 

vi. Procurement of goods and services cannot be split into parts or instalments to fall below the quotation threshold values. 

vii. For goods and services valued from $1,000 to less than $10,000 (GST exclusive), at least two verbal quotations must be obtained.
 
viii. For goods and services valued from $10,000 to less than $20,000 (GST exclusive), at least three written quotations must be obtained.  

ix. For goods and services valued from $20,000 to less than $150,000 (GST exclusive), at least three written quotations must be obtained by sending the University's standard RFQ documentation to potential suppliers. 

x. Any goods and services valued at over $150,000 (GST exclusive), or any procurement which is assessed as presenting a significant risk to the University, must be procured under the Tender Procedure [000947]. 

xi. For any goods and services, the specified number and format of quotations is provided as a minimum requirement only.  Depending on the nature of the procurement, it may be appropriate to confirm verbal quotations in writing, obtain more than the minimum number of quotations or undertake a tender process.

xii. Quotations should reflect details of freight, installation and any discounts if relevant.

Establishment of supply relationships

xiii. Procurement of some goods and services will be covered by the University's existing supply relationships that are established on a qualified basis.  In such instances, quotations must be obtained from these suppliers unless an exemption is granted in accordance with Clauses 3.xiv. and xv. of this procedure.

xiv. Procurement of some goods and services will be covered by an exclusive, University-wide supply agreement.  In such instances, additional quotations are not required as the procurement must be obtained from this supplier unless an exemption is granted in accordance with Clauses 3.xv. and xvi. of this procedure.

Exemptions to quotation

xv. Certain circumstances may justify or necessitate an exemption to the University's quotation procedures such as:

  • existing contractual arrangements for the same or similar goods and services;
  • functional, technical, logistic and/or geographic requirements;
  • alternative procurement methods offer better value for money and/or lower cost, risk and complexity; and/or
  • there is a sole supplier in the market.

xvi. An exemption to quotation may be approved by the Chief Financial Officer or Associate Director, Commercial Services provided that there is adequate documentation to support the request. 


Obtaining quotations

xvii. A detailed specification must be prepared prior to obtaining quotations for goods and services valued at over $20,000.  This should be prepared using the University's approved RFQ template and may be issued via the University's electronic tendering system or finance system. 

xviii. Information to potential suppliers usually includes:

  • a description of the goods or services to be procured;
  • detailed specifications as required;
  • quantity (units or hours as applicable);
  • contacts details for the relevant business area;
  • delivery time or other requirements; and
  • point of delivery or performance as required.

xix. Quotation documentation must be written such that it does not unduly limit the range of potential suppliers. 

xx. In instances when an exemption to quotation has been approved, the functional specification criteria must still be sufficiently detailed to confirm that the quotation meets the University's requirements and offers best value for money.

xxi. Faxed, mailed, hand-delivered or emailed quotations will be accepted.

Communication during the quotation process

xxii. Communications during the quotation process will be handled with due regard for probity - all potential suppliers will receive the same information and time for a response, and no single supplier will be given a potentially unfair advantage.  This includes clarifications on any aspect of the quotation unless there are reasons relating to confidentiality or intellectual property.  

Negotiations during the quotation process

xxiii. Negotiations will be undertaken to achieve an agreement that is fair, durable, meets the needs of both parties and maintains or improves the relationship between the parties.  The University will not attempt to lower the price by negotiating or trading between shortlisted or recommended suppliers.  The University will not engage in the practice of bid shopping.

Approval of recommended supplier

xxiv. The University reserves the right to accept a quotation other than the lowest submitted and in such cases the reasons will be clearly documented.

xxv. In the event that two quotations are equal, the successful one will be selected by giving preference to a local contractor over a contractor from outside the region.

xxvi. For procurements valued at over $20,000 (GST exclusive), Commercial Services will review the quotation process prior to approval to ensure that it has been conducted with due regard for transparency, probity, equity and ethical behaviour in accordance with the University's policies and procedures. 

xxvii. The recommended supplier will be approved by an authorised delegate in accordance with the table below (as extracted from the Procurement, Purchasing and Expenditure Delegation Schedule).

Value of Engagement

Authorised Delegates

Up to $150,000

Financial Delegate – Level 1*

and one of the following:

Financial Controller, AD, Management Accounting or

AD, Treasury

Up to $50,000

Financial Delegate – Level 2*

and one of the following:

Financial Controller, AD, Management Accounting or

AD, Treasury

Up to $25,000

Financial Delegate – Level 3*

and one of the following:

Financial Controller, AD, Management Accounting or

AD, Treasury

 

*  Levels 1, 2 and 3 Financial Delegates will be maintained in the University's finance system (per section 5.5xxxi of the Delegation of Authority Policy).

 

Record-keeping

xxviii. For procurements up to $20,000 (GST exclusive), details of the quotation process should be recorded against the purchase order in the finance system.  All other documentation relating to the procurement should be retained by the relevant business unit for audit purposes.   

xxix. For procurements valued at over $20,000 (GST exclusive), a Competitive Bid Summary report should be prepared and sent to Commercial Services with supporting documentation.

Advising suppliers of the outcome

xxx. Unsuccessful suppliers or contractors should be advised of the outcome of the quotation process.  If requested, the name of the approved supplier may be released but not any details about the quotation.

Performance of suppliers

xxxi. Poor performance on the part of a supplier or contractor should be reported to Commercial Services. 


Complaints resolution

xxxii. Any complaints arising from the University's procurement activities will be handled by the Complaints Management Unit in accordance with the University's Complaints Resolution Policy [000745] and Complaints Resolution Procedure [000898].


4.      Audit, compliance and review

4.1 The implementation of and compliance with this procedure will be periodically audited as part of the University's internal audit cycle.

4.2 Failure to comply with the provisions of this procedure and the relevant delegations will be taken very seriously.  University staff found to be in breach of this procedure may be subject to disciplinary action. 

4.3 This procedure will be reviewed by the Chief Financial Officer at least once every three years with advice from the Associate Director, Commercial Services.


5.      Essential Supporting Documents

Conflicts of Interest Policy 000934
Delegation of Authority Policy 000083 and Delegation Schedules
Procurement Policy 000946
Purchasing Procedure
Quotation process templates - refer to Financial Services' website
Tender Procedure 000947


6.      Related Documents

Code of Conduct
Complaints Resolution Policy 000745
Complaints Resolution Procedure 000898
Negotiation Guidelines and Framework

Approval AuthorityVice-Chancellor
Date Approved14 October 2011
Date for Review14 October 2014
Policy SponsorChief Financial Officer
Policy OwnerAssociate Director, Commercial Services
Policy ContactAssociate Director, Commercial Services
Amendment History

Minor amendment - Change of Deputy Vice-Chancellor (Services) to Chief Financial Officer with the move of Commercial Services to Finance and amended numbering, Governance and Policy, 12 June 2012.