3-4 Use and Engagement of Contractors Policy - North Queensland ...

Use and Engagement of ContractorsPolicy 3-4 Version 2Date Approved: 26 June 2012Company Secretary…………………1. ApplicationThis policy applies to all directors, employees and Contractors of NQBP.2. PolicyA contractor is a third party engaged by NQBP to undertake physical capital and maintenancework.NQBP has a policy of maintaining a small core of key staff to manage its operations. NQBP willefficiently engage and manage contractors to undertake physical work such as construction andmaintenance work and specific development work on behalf of NQBP.1.0 Categorisation of worksVery minor works are works of less than $50,000.Minor works are all works up to and including works to the value of $500,000.Major works are all works to the value of more than $500,000.2.0 EngagementThe required method of invitation varies according to the value of the contract.For very minor works (less than $50,000), engagement must be in accordance withNQBPs Purchasing Procedures.For minor works, contractors are to be engaged under the NQBP’s “General Conditions ofContract - Goods and Materials or Services”, including Annexure A. In Annexure A, theminimum amount of insurances required unless specifically decided otherwise will be: public liability - $20M contractors All Risks - project value + 20%3.0 Contract Documentation ReviewAll contracts should be reviewed by Legal or an external law firm. For clarification ordirection NQBP’s Legal group should be contacted.For example, the relevant General Manager may seek an external contract law review ofthe documentation and a certificate of correctness prior to award where it is consideredwarranted by the complexity, sensitivity, its relationship to a major project or widerpotential impacts.Use & Engagement of Contractors Policy Page 1 of 6(E12/20893) – Policy Sponsor – CFO

4.0 TenderingContractors for major works will be selected through a tender process and engaged undera Formal Instrument of Agreement which defines the document forming the contract.Special Conditions of Contract may be included which are specific to a particular job.Standard documents for each of the tender inclusions are held in the Engineering TRIMfile PI/022/00001.Tenderers are not to be disadvantaged or advantaged by the provision of information. Forexample:The questions of any tenderer will be answered and those questions and answerswill be supplied to other tenderers; and Where NQBP requests any changes to the scope of works during the tender phase,that request is to be communicated to all tenderers.Tenders are evaluated based on selection criteria relevant to the contract. These willusually include:costtenderer's experienceexperience of personnel who will be assigned to fulfil the contracttrack record (including, where appropriate, environmental performance)financial capacityqualificationsProject Management abilityability to achieve project outcome financial capacity to carry risks of the contractSelection criteria are weighted depending on importance to that project. NQBP can clarifyprices of work or additional work prior to signing the contract. There must always be apost tender, pre contract discussion between NQBP and the preferred tenderer. Thediscussion is to cover areas such as clarifying work methods, equipment, points in thetender and areas where work may be under or over estimated. Tender minutes should bedocumented and countersigned by the tenderer to confirm that the minutes are true. Theminutes should be included as part of the contract.A two stage tender process may be preferable under certain circumstances especiallywhere there is a high cost or impact for NQBP associated with failure on behalf of thecontractor. In this situation, NQBP would first call for Expressions of Interest. Thoseexpressing interest in the work are subject to a selection process and those short listedinvited to tender for the work. The short listed group is selected based on its ability tomeet the needs of NQBP and the work based on: statement of capacity (equipment)capital of the contractorstatement of experience in similar projects statement of personnelNQBP does not generally hold public tender openings unless it is considered to be in thebest interest of NQBP or is specifically requested and NQBP considers it appropriate.Once the contract has been awarded, the value and size of the contract can be released onrequest. Prior to the awarding of the contract, the details of tenders cannot be discussedoutside NQBP.Use & Engagement of Contractors Policy Page 2 of 6E12/20893 – Policy Sponsor – CFO

4.1 SOLE INVITATION SITUATIONS AND URGENT ORDERS MUST BEAPPROVED BY THE CEO OR DCEO FOR PURCHASES OVER $50,000 (exGST).Sole suppliers will generally only be authorised where:No responses to an invitation to tender were received, or no conformingtenders were received.Where there is no alternative supplier or substitute goods/services fortechnical reasons.Where replacement parts or continuing services for existing equipmentare available only from the original supplier and there is no interchangeability of parts from another supplier. NB this type of situation should beanticipated and costed in the original evaluation of the equipmentpurchase.Where a genuine emergency exists.A significant Procurement Plan demonstrates that this is an appropriatecommercial strategy addressing appropriate governance and commercialjustifications to the satisfaction of the CEO or DCEO.5.0 AdvertisingEvery advertisement for work is to be advertised in a Saturday Courier Mail and in thelocal paper nearest the worksite and major regional nearest the work site. Depending onthe type of work and location of possible suppliers, it may be necessary to advertise in anational paper, e.g. The Australian, and in specific overseas countries as required. Aminimum of 2 weeks is to be allowed between the forwarding of the advertisement and theclose of tender.For minor works, there is no requirement to advertise, although advertising can be utilisedif considered appropriate.6.0 Environmental issuesAll projects undertaken by NQBP are required to have a project environmentalmanagement plan (EMP) approved by NQBP, and contracts awarded are to requirecompliance with this approved document. Tender documents should normally include theapproved EMP.Guidelines for EMPs are available in the Environmental Management Manual, which islocated on the NQBP Intranet. The EMP must document the environmental requirementsfor the project and any approvals that will be required.In evaluating tenders, the past environmental performance of the contractor and theirenvironmental policy/practices should be considered.7.0 ConsultationContractors engaged by NQBP must undertake any consultation with port users, thecommunity and other stakeholders as specified or as the need becomes apparent duringthe term of the engagement.8.0 Project ReviewA formal final review will be conducted for all contracts in order to identify what should bechanged to minimise the losses and improve the benefits of contracts. For contracts tothe value of $500 000, that review will usually be internal. For contracts over $500 000,the review will usually be external.9.0 Promotion and PublicityPromotional and publicity activities will be subject to the approval of NQBP prior to majornew announcements being made. At the point new announcements have been made orapproved by NQBP, contractors are then free to seek their own promotional and publicityopportunities. NQBP will have a discretion concerning the acknowledgment in promotionsand publicity from contractors.Use & Engagement of Contractors Policy Page 3 of 6E12/20893 – Policy Sponsor – CFO

10.0 SignageSignage on new equipment and at sites will be subject to NQBP approval. NQBP willhave control of signage from the moment the contractor is engaged.11.0 Miscellaneous issuesAll approvals, environmental and otherwise, must be incorporated in contract documents,with responsibility for compliance clearly defined.Authorisation of expenditures is to be in accordance with NQBP's Instrument ofDelegation.All original Formal Instruments of Agreements must be kept in the Fire Safe andregistered by the Information Management Officer. A copy should be kept on the relevantfile and a copy stored electronically in the engineering computer data storage system.There must be full disclosure of any actual or perceived potential conflict of interest inregard to the awarding of contracts.Use & Engagement of Contractors Policy Page 4 of 6E12/20893 – Policy Sponsor – CFO

CONTRACT SERVICES – MINIMUM REQUIREMENTSValue Invitation Offer Quality ManagementRequirements0 - $50,000 See Procurement Written/Faxed Offer No formal systemProcedurerequired$50,001 - $500,000 Tender documents to 3 Written/Faxed offer Determination made oncontractors 2known appropriatebasis of level of riskOver $500,000Public tender.Public advertisementCourier Mail + Local +Govt.Full tenderdocumentation. 2Written offers closingin tender box.Determination made onbasis of level of risk.Specification Evaluation 1 DocumentationWritten contract forservices.Full description of worksrequired.General Conditions ofContract – Goods andMaterials or Services +Annexure A.Detailed spec. including: Background Purpose Tasks Output/Milestones/Outcomes Personnel Fees Quality Mgmt Insurances Environmentalrequirements Selection CriteriaRefer tender documentsInclusion Checklist.General ManagerGeneral Manager basedon value for money.Recommendation to theCEO or DCEO.Consultation with otherGeneral Managers.Panel of three orexternal evaluation.Recommendation toCEO/DCEO or Board.OfferLetter of AcceptanceA) NQBP documentation,General Conditions of Contractfor Goods, Materials orServicesEvaluation Summary (as filenote)B) Offer and Letter ofAcceptanceTender documents includingGeneral Conditions ofContract-AS2124Tender submissionEvaluation SummaryCEO/DCEO or BoardApproval.1. A conflict of interest declaration is to be included in any tender evaluation. 2. Sole Invitations or Sole Suppliers:A submission to the CEO or DCEO stating the reasons for a sole invitations/sole suppliermust be approved by the CEO or DCEO for all contractors >$50,000 prior to the issue ofthe invitationUse & Engagement of Contractors Policy Page 5 of 6E12/20893 – Policy Sponsor – CFO

Tender Documents - Inclusion Checklist Tender Form and annexed Schedule of Tender Documents and Drawings Details of Tenderer Bill of Quantities Conditions of Tendering Tender Information Draft Form of Formal Instrument of Agreement General Conditions of Contract Annexures A and B to A.S. 2124-1986 Special Conditions of Contract Technical Specifications Services Specification Environmental Requirements Conditions of Site Access Drawings3. Policy Review DateThis policy should be reviewed by 30 June 2013.4. DefinitionsNQBP: means North Queensland Bulk Ports Corporation Limited ACN 136 880 128 andits related bodies corporate including Ports Corporation of Queensland Limited ACN 126302 994 (PCQ) and Mackay Ports Limited ACN 131 965 707 (MPL).Contractors: means contractors or consultants engaged by NQBP under a personalservices consultancy agreement or other similar arrangements.Use & Engagement of Contractors Policy Page 6 of 6E12/20893 – Policy Sponsor – CFO