Kia ora

I write to acknowledge your information request of 2 November 2019 in respect of the maximum expected cost of procurement before an open tender is required.

Please be advised that your request has been passed on to the relevant team within Council and you will be informed of the outcome.

The Local Government Official Information and Meetings Act 1987 requires that we advise you of our decision on whether the Council will provide the requested information or not "as soon as reasonably practicable", no later than 20 working days after the day we received your request.

We received your request on Monday 4 November and will respond to you no later than 2 December 2019.

Kind regards,

Michelle van Straalen
Official Information Advisor | Legal Services | Governance Unit

DDI: 07 974 0589 | [email address]

Hamilton City Council | Private Bag 3010 | Hamilton 3240 | www.hamilton.govt.nz
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This email and any attachments are strictly confidential and may contain privileged information. If you are not the intended recipient please delete the message and notify the sender. You should not read, copy, use, change, alter, disclose or deal in any manner whatsoever with this email or its attachments without written authorisation from the originating sender. Hamilton City Council does not accept any liability whatsoever in connection with this email and any attachments including in connection with computer viruses, data corruption, delay, interruption, unauthorised access or unauthorised amendment. Unless expressly stated to the contrary the content of this email, or any attachment, shall not be considered as creating any binding legal obligation upon Hamilton City Council. Any views expressed in this message are those of the individual sender and may not necessarily reflect the views of Hamilton City Council.

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Kia ora

Further to your information request of 2 November 2019 in respect of the maximum expected cost of procurement before an open tender is required, I am now able to provide Hamilton City Council's response.

You requested:
Does Hamilton City Council have a financial limit on the maximum expected cost of procurement (for goods, construction, software, consultancy etc.) before an open tendering process is triggered?
If so, what is that dollar amount?
If so, when was that dollar amount set?
If there are financial tiers for direct appointment, request for quotes etc. could you also please specify these.
If this is specified in a procurement policy or suchlike, could you please provide a copy.

Our response:
As per our Procurement Manual:

4.3.4 Procurement Financial Limits
The following financial limits apply to all procurements specified in the scope of this policy:
i) Contracts under a value of $50,000 - may be procured through an Approved Supplier or Direct Appointment process, although competitive quotes may also be acquired. Refer Section 4.3.14 of this Policy.
ii) Contracts between the values of $50,000 and $250,000 - should be engaged through a RFx process (Public or Private), except when engaging an Authorised Supplier or by Direct Appointment. Any Direct Appointment should comply with one of the criteria listed in 4.3.5 and a Procurement Plan Template (D-616964) must be approved prior to the appointment by the appropriate delegated authority (Unit Manager or General Manager if under a value of $100,000 or the Chief Executive if between $100,000 and $250,000). Refer to the Procurement Policy and Procedures Manual, Section 7 Procurement Planning.
iii) Contracts exceeding a value of $250,000 - must go through a Public RFx process unless engaging an Authorised Supplier or either:
a. the decision to undertake a Direct Appointment; or
b. not to go through a Public RFx process;
has been approved by the relevant Council Committee or full Council.

Note: The requirement to go through a public RFx process shall not apply for Private Developer Agreements. Private Developer Agreements may be signed off by the relevant Delegated Authority up to the value of their Delegated Authority.

4.3.5 Direct Appointment
When looking to recommend undertaking a Direct Appointment staff should review that the reason for the Direct Appointment complies with one of the following criteria:
i) Monopoly situation: Where there is a monopoly situation and only one Supplier capable of supplying the requirements i.e. engaging an arrangement for supply of electricity on a network where the network is owned by a single party;
ii) Proprietary technology: Where a Supplier is the sole Supplier and/or patent holder of a specific product that is required by HCC. HCC must be satisfied that the proprietary technology is the most appropriate for the needs of HCC.
iii) Unique business proposition: Where a Supplier has a unique business proposition that can minimise risks or costs to Council. This could include existing knowledge relevant to a project;
iv) Existing contract: If goods or services are in addition, or necessary for the completion of delivery of an existing contract provided that the original contract was publicly advertised and a change of Supplier cannot be made for economic, technical, legal or practical reasons; or
v) Benefits and costs of competition: The time and costs of a competitive process outweigh the benefits of competition.

The key requirement is the Direct Appointment represents best value for HCC. Poor planning or organisation of procurement is not justification for a Direct Appointment.

Kind regards,

Michelle van Straalen
Official Information Advisor | Legal Services | Governance Unit

DDI: 07 974 0589 | [email address]

Hamilton City Council | Private Bag 3010 | Hamilton 3240 | www.hamilton.govt.nz
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This email and any attachments are strictly confidential and may contain privileged information. If you are not the intended recipient please delete the message and notify the sender. You should not read, copy, use, change, alter, disclose or deal in any manner whatsoever with this email or its attachments without written authorisation from the originating sender. Hamilton City Council does not accept any liability whatsoever in connection with this email and any attachments including in connection with computer viruses, data corruption, delay, interruption, unauthorised access or unauthorised amendment. Unless expressly stated to the contrary the content of this email, or any attachment, shall not be considered as creating any binding legal obligation upon Hamilton City Council. Any views expressed in this message are those of the individual sender and may not necessarily reflect the views of Hamilton City Council.

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