Frequently Asked Questions
FAQs - General
What is Local Government Procurement (LGP)?
Local Government Procurement (LGP) has been established to provide a fully integrated procurement service to councils and associated organisations in NSW. LGP is a new company, formed in 2006 by the Local Government and Shires Associations of New South Wales on behalf of its members to create a procurement operation dedicated to meeting the specific needs of Local Government.
From October 2008, Local Government Procurement can meet the purchasing needs of Not for Profit Groups across Australia as well as providing extensive procurement, tendering and contract management support. This expansion of LGP was approved by the LGP Board and the Department of Local Government.
How is LGP funded?
The establishment of LGP was funded by the Local Government and Shires Associations of New South Wales. LGP does not receive any external funding and derives a revenue stream by selectively applying a management fee to contracts. This fee is charged to suppliers as a percentage of their revenue generated from local government business through the relevant LGP contract.
What is the make up of the LGP Board?
The LGP Board comprises:
- CHAIRPERSON: Cr Paul Braybrooks OAM - Treasurer, Shires Association
- Cr Keith Rhoades AFSM - President, Local Government Association
- Cr Ray Donald - President, Shires Association
- Cr Kevin Schreiber - Executive, Local Government Association
- Mr Bill Gillooly AM - Secretary General, Local Government and Shires Associations of NSW
- Ms Penny Holloway - General Manager, North Sydney Council
- Mr John Truman - Immediate Past National President, Institute of Public Works and Engineering Australia.
FAQs - For Councils
Is it mandatory to use LGP?
No, councils should use the best available supply arrangement available to them.
Do I still have to go out to tender if I purchase from an LGP contract?
No - all LGP contracts are established as a result of a Request for Tender process and suppliers are required to submit a tender to be included in the tender process.
LGP has attained prescription in the Local Government Act 1993 and as such has been gazetted as an equivalent to NSW Department of Services, Transport and Administration (DTSA). That is, LGP is a bulk purchasing organisation as prescribed by the Local Government Act.
In short, this means that councils are able to buy - if they so choose - from LGP contracts in the same way councils can buy off DTSA contracts without any further need to go to tender.
What is the process LGP follows when tendering?
Considerable effort has been expended in developing processes within LGP to both generate greater involvement with local government and greater efficiencies within the business. Councils are involved at every stage of LGP's tender process, including initial consultation, drafting of the documentation and evaluation of tender responses.
The stages of our tender process are:
- Need identified
- Feasibility established
- Documents developed
- Tender advertised
- Evaluation facilitated
- Appointment made
- Contract reviewed
What are the benefits of using an LGP contract?
LGP provides a number of benefits to councils purchasing through a LGP contract:
- Exemption from requirement to seek tenders:
Reduced time, effort and expenditure for councils in not having to call tenders
Immediate access to suppliers' products and services
Improved efficiencies associated with purchasing and contracting - Best offer/terms provided by suppliers - achieved through the aggregation of purchasing and negotiating power
- Contracts designed specifically for NSW Local Government needs and requirements including product specifications, local business component, delivery and payment processes
- Standardized terms and conditions, product specifications and purchasing procedures
- Ease of use via the LGP website, this lists contracts and their suppliers.
How do I find out more about LGP's contracts?
There are four ways to find out about LGP contracts, they are:
- A Buyer's Guide for each LGP contract is available which includes the contract specifications and how to access the agreed rates
- Visit the Current contracts page on LGP's website
- Speak to your dedicated Business Manager
- Call or email LGP.
All contract details are commercial in confidence and are only available to local government officers and elected members.
Does the tendering threshold of $150,000 include or exclude GST?
Advice to LGP is that the $150,000 is inclusive of GST.
Will the $150,000 tendering threshold apply if you are planning to enter a contract for several years covering intermittent purchases made on an as required basis with each purchase having a value less than $150,000?
If the total expenditure during the contract period is expected to exceed the $150,000 limit, you should run a tender process prior to establishing the contract.
If you are not committed to purchase from the one party over the coming period and you are obtaining fresh offers from the market at the time of each purchase, provided the purchase price remains below the $150,000 limit, then a tender would not be necessary.
Buyers should be cautious to avoid 'order splitting' and other methods to deliberately avoid the tender process. Seek legal input if in doubt.
Will LGP reproduce tenders available from NSW Department of Commerce?
LGP will only commence a tender process where it has identified a need either by advice from suppliers who deal with councils (and have intimate knowledge of specific needs) or from councils themselves. LGP will also look at products and services unique to councils and possible existing DTSA contracts that are not local government specific.
LGP will not pursue contracts where the DTSA is regarded as best value for money.
How can my council participate as a panel member in an LGP tender?
Councils can contact LGP via our website and email their interest or contact the relevant Procurement Manager. Council staff recommended for participation include; Procurement Managers, Supply Managers, ICT Managers, Information Services Managers, Fleet Managers and Administration Managers.
What would be required of my staff member and/or me when participating as a panel member?
LGP is aware that individual staff member's resources are limited and valuable. As tender processing and contract management is LGP's directive, all document development, probity, and analysis is completed by LGP staff. Panel members from various councils are asked to participate in:
- Understand and sign the LGP Code of Conduct and Confidentiality Agreement [email]
- Provision of specification inclusions or extractions [email]
- Provision of suppliers to be informed [email]
- Provision of technical or specific information relating to the product/service [email]
- Receipt and perusal of Probity, Procurement and Evaluation Guidelines
- Review of tender submission and completion of the Tender Panel Guides and Forms [electronic]
- Participation in the final evaluation stage: assessment analysis and short listing [teleconference or boardroom meeting].
FAQs - For Suppliers
How can we get on board?
If you are interested in doing business with local government please contact us, you can register your details through LGP's website.
All LGP tenders are advertised through the tenders section of two Sydney daily metropolitan newspapers.
What are the benefits of doing business as an LGP supplier?
There are a number of benefits of becoming a LGP contracted supplier, including a huge reduction in the number of individual tenders to respond to, thus reducing time, effort and expenditure. Other benefits include:
- Access to key decision makers
- Participation in Local Government conferences/events
- Development of standard terms and conditions for whole of NSW Local Government
- Association with LGP and its reputation in the Local Government market
- Streamlined purchasing processes
- Open competition across a much wider marketplace
- Ability to target Local Government with a range of your information through LGP and capacity to display up-to-date information
How does LGP advertise its tenders?
LGP tenders are advertised through Sydney Metropolitan Newspapers, LGP's website and our etendering portal www.tenderlink.com/lgp.
What is the process LGP follows when tendering?
Considerable effort has been expended in developing processes within LGP to both generate greater involvement with local government and greater efficiencies within the business. Councils are involved at every stage of LGP's tender process, including initial consultation, drafting of the documentation and evaluation of tender responses.
The stages of our tender process are:
- Need identified
- Feasibility established
- Document developed
- Tender advertised
- Evaluation facilitated
- Appointment made
- Contract reviewed.
