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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-11-29 Daily Xml
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Ministerial Statement

GOVERNMENT STATIONERY CONTRACT

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for the Public Sector) (15:52): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.F. O'BRIEN: I rise to inform the house on matters regarding the across-government stationery contract. For the benefit of members I will describe the process that occurred, in chronological order. On 21 November 2011, cabinet approved a submission to establish a mandated across-government stationery contract following completion of the printer cartridge review undertaken by the Procurement Working Group.

The submission proposed that a new mandated contract be established for stationery and commence from 1 September 2012 for all public authorities. The submission intended that all public authorities should be interpreted as broadly as possible and include public authorities and prescribed public authorities covered under the State Procurement Act 2004.

An acquisition plan for the new across-government stationery contract received Governance Committee approval on 29 March 2012 and was submitted to the State Procurement Board for consideration at their meeting on 11 April 2012. The State Procurement board approved the acquisition plan on 11 April 2012 and delegated approval of the purchase recommendation to the chief executive, Department of the Premier and Cabinet.

In the lead-up to the tender process, Shared Services SA sought advice from DECD as to the scope of Back To School and met with DECD Procurement to discuss this matter. The Crown Solicitor's Office finalised the draft contract for stationery on 24 April 2012. The tender documents were released on 26 April 2012.

As part of the tender process, tenderers had one month from the release of the tender documents to prepare and submit their bids by 28 May 2012. In all, eight submissions were received. These were firstly evaluated to ensure that each bid met all the specified requirements of the state, such as deliveries to regional and remote areas, the ability to integrate with the state's e-procurement system, payment terms, warranties, savings opportunities and contract reporting, to name but a few. As with any tender process, it is important that prospective suppliers fully and comprehensively address all these requirements, as this information is used by the evaluation team to assess each bid in detail.

The evaluation plan was approved on 22 May 2012 and the evaluation team undertook the evaluation of bids over the period 31 May 2012 to 14 June 2012. The evaluation of these technical requirements was undertaken prior to, and separate from, any assessment of price. After this evaluation was complete, the bids were scored by the evaluation panel, with representatives drawn from agencies across government, and the panel then agreed on the final score. The evaluation report was approved on 26 June 2012.

Suppliers needed to score a minimum of 60 per cent from this technical review in order for them to be shortlisted for selection. Regrettably, some suppliers did not meet this requirement. Tender bids that did not achieve a score of 60 per cent included little or no response to requirements such as delivering savings to government, providing additional value, ability to deliver price matching, business continuity or the inclusion of a transition plan for the new contract. Some tender bids also included delivery times that were twice that specified in the tender document (delivery within 24 hours in the metropolitan area), again making their bid less likely to meet a minimum score of 60 per cent.

Four suppliers were shortlisted and were then evaluated from a value-for-money point of view, not just price. This includes assessing a basket of goods containing more than 1,200 items commonly used across government, in particular, those that are mandated under the contract. Value for money includes the technical requirements, as well as price, delivery costs (if any), rebates, discounts, minimum order sizes—in effect the whole-of-life cost.

A negotiation plan was approved on 27 June 2012. Negotiations were held with the four shortlisted suppliers to further improve the value for money to government by maximising the application of rebates and discounts. The purchase recommendation was finalised on 27 July 2012 and approved by the chief executive of the Department of the Premier and Cabinet on 6 August 2012. Finally two suppliers, who demonstrated that they met the service delivery requirements and delivered best value for money, were recommended for approval by the State Procurement Board as members of the panel contract.

This procurement process also included a review by a probity adviser, who considered the tender document, approval documents, the evaluation process, management of tender documents and final purchase recommendation. This review by PSI Asia Pacific Pty Ltd noted that the decision to award a panel contract to Corporate Express and OfficeMax is defensible and consistent with the aspirations of the approved acquisition plan. PSI also concluded that the outcome of the evaluation process was robust, with the evaluation process appropriately conducted. There were no residual probity issues associated with the procurement process.

The cabinet submission was circulated to agencies for review prior to consideration by cabinet. Cabinet approved the submission on 3 September 2012 and I informed the house on 5 September 2012. Since that time, one of the unsuccessful tenderers has raised issues and allegations about the process and the outcome. I wish to inform members that the Small Business Commissioner, Mr Mike Sinkunas, is investigating these complaints. The Small Business Commissioner Act lists as one of the functions of the commissioner: 'to assist small businesses on request in their dealings with state and local government bodies.' A request has been made to the commissioner and he is acting upon that request.

The government takes seriously the views of small business operators in South Australia and wishes to encourage small businesses to thrive and prosper. I have held discussions with the chief executive of Business SA, Mr Nigel McBride, to examine ways in which South Australian small businesses can be supported to apply for and win government tenders.

Members should be aware from reading the State Procurement Board annual report that 75 per cent of government contracts are with South Australian suppliers. This was an increase from 63 per cent in 2010-11. The government is committed to maximising the business relationship with South Australian suppliers while ensuring maximum value for money for taxpayers.

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