Appendix One Procurement Policy 2020.pdf

MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published: June 2020
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INFORMATION
MPI Procurement Policy
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Organisational Policy (MPI Procurement)
June 2020
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

OVERVIEW
Procurement covers all aspects of the acquisition and delivery of goods or services, spanning the whole
contract life cycle from the identification of needs to the end of a service contract, or the end of the useful
life and subsequent disposal of an asset.
Purpose
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This MPI Procurement policy is designed to ensure that:
  MPI meets its obligations to achieve Public Value through best practice procurement, as laid out in
the  Government  Procurement  Rules  (GPR)  and  Five  Principles  of  Government  Procurement
(Principles);
  staff are aware of their obligations when  planning, sourcing and managing procurement activity,
and there is a consistent practice across MPI;
  appropriate agreements are entered into and managed to  reduce legal, financial, health & safety,
security and reputational risk to MPI;
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  MPI can create partnerships that enables New Zealand to be the most sustainable provider of high-
value food and primary products; and
  MPI  applies  the  Principles,  GPR,  Government  Procurement  Charter  and  other  good  practice
guidance to all procurement activity.

Context
This policy defines how the Ministry will meet its obligations to achieve Public Value through best practice
procurement, as laid out in the GPR, and the Principles.
Public Value means achieving the best available result for New Zealand for the money spent.  It includes
using all our resources effectively, economically, and responsibly, and taking into account:
1.  The procurement’s contribution to the outcomes and results we are trying to achieve; and
2.  Delivery of any Broader Outcomes we are trying to achieve (including social, environmental,
cultural, or economic benefits); and
3.  The total costs and benefits of a procurement (total cost of ownership).
This includes selecting the most appropriate procurement process that is proportionate to the value, risk
and complexity of the procurement to help achieve Public Value.
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

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INFORMATION
New  Zealanders  expect  that  public  money  and  resources  will  be  managed  effectively  and  efficiently,
competently, and with integrity.  MPI is reliant on external partners and service providers to support MPI to
deliver on our commitments to the Government and New Zealanders as a whole.
Principles and behaviours
The  Ministry  will  conduct  all  procurement  in  accordance  with  the  GPR,  including  the  Principles  and  the
Government Procurement Charter.  All procurement, commercial and supplier management activities must
comply  with  the Principles,  no  matter  what  the  value of  the  external  spend.    The  aim  in  applying  these
principles is to ensure that the delivery of Public Value is a primary focus in all our procurement activity.
The Five Principles and their requisite behaviours and actions are:
  Plan and manage for great results
  Identify  what  you  need,  including  what  broader outcomes  should  be  achieved,  and  then
plan how to get it;
  Set up a team with the right mix of skills/experience;
  Involve suppliers early – let them know what you want and keep talking to them throughout
the process;
  Take the time to understand the market and your effect on it.  Be open to new ideas and
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solutions;
  Choose the right process – proportional to the size, complexity and any risks involved; and
  Encourage e-business.
  Be fair to all suppliers
  Create competition and encourage capable suppliers to respond;
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

  Treat all suppliers equally – don’t discriminate (this is part of our international obligations);
  Seek  opportunities  to  involve  NZ  businesses,  including  Maori,  Pasifika  and  regional
businesses and social enterprises;
  Make it easy for all suppliers (small and large) to do business with us;
  Be open to subcontracting opportunities where this adds value;
  Clearly explain how proposals will be assessed, so suppliers know what is important and
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what to focus on; and
  Provide useful and constructive feedback to suppliers so they can learn and know how to
improve next time.
  Get the right supplier
  Be clear about what you need and fair in how you assess suppliers;
  Choose the right supplier who can deliver what you need, at a fair price and on time;
  Choose suppliers that comply with the Government’s Supplier Code of Conduct;
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  Build demanding, but fair and productive, relationships with suppliers;
  Make it worthwhile for suppliers; and
  Identify relevant risks and get the right person to manage them.
  Get the best deal for everyone
  Get the best Public Value – account for all costs and benefits over the lifetime of the goods
and/or services;
  Make  balanced  decisions  –  consider  social,  environmental,  economic  and  cultural
outcomes that should be achieved;
  Encourage  and  be  receptive  to  new  ideas  and  ways  of  doing  things  –  don’t  be  too
prescriptive;
  Have  clear  performance  measures  –  monitor  and  manage  to  make  sure  you  get  great
results;
  Work together with suppliers to make ongoing savings and improvements; and
  It’s more than just agreeing the deal – be accountable for the results.
  Play by the rules
  Be accountable, transparent and reasonable;
  Make sure everyone involved in the process acts responsibly, lawfully and with integrity;

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  Stay impartial – identify and manage actual, perceived or potential conflicts of interest; and
  Protect suppliers’ commercially sensitive information and intellectual property.
We  will  apply  the  Principles  and  the  GPR  when  planning,  sourcing  and  managing  our  procurement,  as
these set the standard for good practice.  By applying these principles sensibly, we can demonstrate that
we are spending public money carefully and that we are properly managing the process for spending it.

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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

The Government Procurement Charter directs us to:
  Seek opportunities to include New Zealand Businesses.  Openly work to create opportunities
for local businesses and small-to-medium enterprises to participate in the procurement processes;
  Undertake  initiatives  to  contribute  to  a  low  emissions  economy  and  promote  greater
environmental  responsibility.   Ensure  that  economic  and  social  development  can  be
implemented  on  a  sustainable  basis  with  respect  for  the  protection  and  prese vation  of  the
environment, reducing waste, carbon emissions and pollution;
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  Look  for  new  and  innovative  solutions.   Making  sure  we  don’t  overp escribe  the  technical
requirements of a procurement, give businesses the opportunity to demonstrate their expertise and
be open to considering new methods of service delivery;
  Engage  with  businesses  with  good  employment  practices.   Ensure  that  the  businesses  we
contract  with  operate  with  integrity,  transparency  and  accountability,  and  respect  international
standards  relating  to  human  and  labour  rights.   For  businesses  operating  within  New  Zealand,
ensure  that  they  comply  with  all  New  Zealand  employment  standards,  health  and  safety
requirements, and privacy laws;
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  Promote inclusive economic development within New Zealand.  Engage with Maori, Pasifika,
and  regional  businesses  and  social  enterprises  in  order  to  actively  contribute  to  our  local
economy.   Openly  work  to  include  and  support  these  businesses  and  enterprises  through
procurement, we will promote both skills development and a diverse and inclusive workforce;
  Manage risk appropriately.  Responsibility for managing risks should be with the party – either
the agency or the supplier – that  s best placed to manage the risk.  We will work with suppliers on
risk mitigation strategies; and
  Encourage  collaboration  for  collective  impact.   Look  to  support  greater  collaboration,  both
across-agency and across-businesses to give likeminded groups the opportunity to find common
solutions within our procurement opportunities.

SCOPE:
What this policy covers
This policy applies to the purchase of all goods and services, rentals and leases arranged by MPI, including
consultants and contractors engaged by MPI and any procurement managed by a third party on behalf of
MPI.
What this policy does NOT cover
This policy does not apply to the following activities:
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-  Employing staff (unless engaging temps, contractors and consultants);
-  Disposals and sales by tender;
-  Investments, loans and guarantees;
-  Gifts,  donations  and  grant  schemes  (refer  MPI  Organisational  Policy  Grants)  including
sponsorships (refer MPI Organisational Policy External Sponsorship);
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

-  Administration  of  Crown  Forestry  managed  assets,  which  are  subject to  specific  procedures
agreed with the Director General;
-  Statutory appointments;
-  Ministerial appointments;
-  Core Crown Legal matters; and
-  Public prosecutions as defined in section 5 of the Criminal Procedure Act 2011.

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Note:  All  sections  of  this  policy  and  its  associated  guidelines  and  procedures  contribute  to  the  policy
position.
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

KEY ACCOUNTABILITIES
The following roles have specific responsibilities under this policy:

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Chief Financial Officer (CFO)
The CFO is responsible for setting and maintaining MPI’s Procurement policy, procedures and guidelines
and reporting to the Senior Leadership team (SLT) on the policy where necessary
Managers
All Managers are accountable for:
  understanding and complying with the responsibilities and limits of their own delegated financial
authority;
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  ensuring staf , and all people working in their team, are familiar and comply with this procurement
policy;
  ensuring that Contract Managers are assigned to all contracts managed within their teams, and
ensuring Contract Managers understand and undertake their contract management responsibilities;
  planning, management and outcomes of all procurement activity within their business unit; and
  risks (including operational, commercial, financial, health & safety and reputational), benefits and
overall performance of all contracts managed appropriately within their business unit.

Contract Managers
All  Contract  Managers  are  responsible  for  ensuring  contracts  are  managed  appropriately  over  their  life,
including:
  tracking and monitoring performance (including managing performance issues), reporting, delivery
and deliverable/milestone progress;
  financial monitoring, including validation and approval of invoices, and tracking spend against
contract value;
  identifying and managing risks associated with the contract (including operational, commercial,
financial, health & safety and reputational);

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  identifying areas of improvement; and
  developing and maintaining trusted and robust relationships with suppliers, conducting reviews and
resolving problems.

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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

All Ministry staff, contractors and consultants
All MPI staff, contractors and consultants involved in procurement activities are responsible for:
  ensuring  they  understand,  comply  with,  and  consistently  apply  the  procurement  policy  and
associated procedures and guidelines when procuring goods and/or services in the course of their
duties;
  obtaining  support  and  advice  early  in  the  process  from  appropriate  subject  matter  experts  as
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relevant  to  the  activity  and  its  associated  risk,  including  the  Procurement  &  Commercial
Management,  Legal,  Safety  &  Wellbeing,  Security  &  Privacy  and  Business  Technology  &
Information Systems;
  ensuring that New Zealand government’s funds are used efficiently, effectively and economically
and deliver good Public Value;
  except for engagement of consultants and contractors, their own purchasing arrangements up to
$100,000 in value and managing them accordingly;
  for engagement of consultants and contractors, their own purchasing arrangements up to $40,000
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in value and managing them accordingly;
  requesting a contract number from the Procurement and Commercial Management Team for all
Professional Services and Contract for Services engagements, regardless of value (for natural
account codes 41000, 41010, 41012, 41015 and 41040 as defined in MPI’s Chart of Accounts),
and for all other engagements with a Maximum Total Estimated Value of over $40,000;
  providing the Procurement and Commercial Management Team with a scanned copy of the signed
contract following a procurement;
  declaring any actual, potential or perceived conflicts of interest in accordance with MPI’s Conflict of
Interest Guidelines; and
  conducting reasonable due diligence (both prior to, and during the contract period).
Procurement and Commercial Management Team
MPI’s Procurement and Commercial Management Team are responsible for:
  considering all proposed Exemption requests above the $100,000 value threshold, and providing
advice on whether the exemption to MPI’s Procurement Policy is supported;
  leading the procurement sourcing strategy and process for all consultants and contractor services
over $40,000 and for all other procurement activity over $100,000;
  providing contract numbers by registering contracts in a centralised database and holding a copy of
the contract;
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  providing professional procurement expertise, advice/assistance to the business when needed;
  providing training to staff in relation to all phases of the procurement lifecycle;
  maintaining and updating associated guidelines, procedures and templates so that they remain fit
for purpose; and
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MPI Organisational Policy
Procurement Policy
Owner: Chief Financial Officer
Published:  June 2020

  developing and maintaining key internal relationships to assist with delivering commercial
management within MPI.

MANDATORY PROCEDURES
MPI staff that need to undertake a procurement activity are required to follow the procurement procedures
set out below:
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  MPI Procurement Procedures
  Recruitment, Contractor & Consultant Guidelines

FURTHER GUIDANCE and INFORMATION
Business Units undertaking procurement activity must consider any legal or Treaty related obligations
and accords and consult with interested parties and/or relevant subject matter experts (both internal and
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external) where necessary.
Related Policies, procedures and guidance:
  MPI Policy
o  Code of Conduct
o  Asset Management and Disposal Policy
o  External Sponsorships
o  Grants Schemes Policy
o  Information Management Policy
o  Risk Management Policy
o  HR & Finance Delegations (Delegations)
o  Motor Vehicle Policy
o  Sensitive Expenditure Policy
o  Purchase Card Policy
  Government Requirements
o  Government Procurement Rules 2019 (4th Edition)
o  Government Procurement Principles
o  Government Procurement Charter
o  Government Good Practice Guides
o  Good Practice Procurement Guide for Improving Health and Safety
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  MPI Guidelines
o  MPI Guidelines Managing Intel ectual Property
o  Guidelines for the treatment of Intel ectual Property Rights in ICT contracts
o  Conflict of Interest
o  Motor Vehicle Guidelines
o  Sensitive Expenditure Guidelines
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MPI Organisational Policy
Procurement Policy
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Published:  June 2020

o  Dealing with Misconduct Guidelines
o  Information Gathering and Public Trust Guidelines
o  Our IT Guidelines
o  Guideline for managing health and safety risk in contracting
  Legislation
o  Public Finance Act 1989
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o  Commerce Act 1986
o  Health & Safety at Work Act 2015
o  Privacy Act 1992
o  Public Records Act 2005
o  Of icial Information Act 1982
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