Posted on January 27, 2023 by Sue Puckeridge
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Tendering regulations updated for local councils and joint organisations
Following the Local Government Tendering Regulation Review Discussion Paper September 2021 (‘Discussion Paper‘), the Local Government (General) Amendment Regulation (No 2) 2022 (‘Amendment Reg‘) commenced on 16 December 2022.
The Amendment Reg updates the tendering provisions to reflect the current practices, the fact that most communications occur electronically and to ensure tendering is conducted effectively. Among other things, certain procedural requirements in the Local Government (General) Regulation 2021 (‘LG Reg‘) for submitting and receiving tender submissions have been amended.
This blog identifies some of the key changes to which local councils and joint organisations should have particular regard.
Submission of tenders
First, facsimile transmission has been discontinued as an acceptable means of submitting tender documents under s173 of the LG Reg (see Amendment Reg, Schedule 1[24]). This is a reflection of the fact that facsimile transmission is largely redundant.
Secondly, a council must now state the way in which a tender must be submitted (see LG Reg, ss 167(2)(e), 168(5)(c) and 169(6)(c)). Councils are still free to choose whether a tender is to be submitted electronically or by hard copy.
Thirdly, s173(2) of the LG Reg has been amended to the effect that the submission of electronic tenders is no longer limited to circumstances authorised by guidelines issued under s23A of the Local Government Act 1993 (‘LG Act‘) (see Amendment Reg, Schedule 1[25]).
Fourthly, tenders need only be kept in a tender box if the council specifies that a hard copy must be submitted (see LG Reg, s174(1)). However, the council has an obligation to ‘ensure that a submitted tender submission is not read, opened or reviewed before the tender submission is formally received under section 175‘ (see LG Reg, s174(4); Amendment Reg, Schedule 1[28]).
Finally, s177(2) of the LG Reg is amended to provide that a council may only consider a tender submission that is:
‘(a) submitted to the council before the deadline specified in the invitation to tender, and
(b) submitted in the way specified in the tender proposal document.’
If, before the deadline specified in the invitation to tender, the council receives a tender submission in a way that is not specified in the tender proposal document, the council must take reasonable steps to inform the tenderer of the way in which a tender submission must be submitted (see LG Reg, s177(3); Amendment Reg, Schedule 1[32]).
Acceptance of tenders
Amendments were made to the LG Act in 2016, which removed the restriction on a council to delegate the acceptance of tenders (except where the tender involves the outsourcing of services carried out by council staff). However, the LG Reg was not updated to reflect this change. Six courses of action were prescribed under paragraphs (a) to (f) of s178(3) of the LG Reg, should the council decide not to accept a tender, all of which had to be decided by resolution of the council’s governing body.
The Office of Local Government does not consider that there is any compelling reason to maintain that restriction. The Amendment Reg updates the LG Reg so that the only decision that must be made by resolution is a decision to enter into negotiations with a person with a view to entering into a contract in relation to the subject matter of a tender if the council decides not to accept any of the tender submissions (See LG Reg, s178(3)(e); Amendment Reg, Schedule 1[35]-[36]).
The reason not to allow this decision to be delegated is to ensure appropriate oversight, transparency and accountability for such decisions (Discussion Paper, page 12).
Implications
Staff within local councils or joint organisations should familiarise themselves with the recent changes and the updated procedural requirements in the LG Reg introduced by the Amendment Reg.
Consideration should be given to whether conditions of tender and request for tender documents should be amended to reflect these changes.
A copy of the Amendment Reg can be accessed via this link.
A copy of the Discussion Paper can be accessed via this link.
If you wish to discuss the issues raised in this article, please contact Sue Puckeridge or Ming Gu.
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