Chapter 5 – Case studies just need to understand their high level responsibilities
6.5 Clarifying the focus
6.5.1 Factors affecting the Adoption of e-Tender
The original adoption, the decision and the trigger to adopt an e-Tender process is lost in the vocabulary and history of the seven councils. Without definitive adoption triggers, the compliance requirements of the individual state statutes34 will be explored in an
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endeavour to understand the reasoning for adoption. The question asked is ‘do the statutes enable or inhibit councils to adopt e-Tender and/or through a TMP? This is what Doherty, McConnell & Ellis-Chadwick (2013, p.499) calls a barrier/inhibitor or obstacles that must be overcome to achieve a successful implementation.
Councils Alpha, Bravo and Charlie are all situated in South Australia (SA) and as such operate under the authority of the SA Local Government Act 1999 (SA LGAct). Early examples of adoption across these three councils show the re-intermediation from hard copy to e-Tender through a TMP occurred over a wide time period (Table 15, Table 16 & Table 17). The initial adoption was through the government owned TMP SA Tenders & Contracts (SAT&C) application with the number and value of e-Tenders during this initial adoption period unknown. What is known is the degree of effectiveness, as Bravo 1 states, ‘sometimes we have problems. Well I have experienced problems in downloading responses’ and Alpha 3, ‘you just say we want to issue it to anybody that's registered to this particular category. Don't know who they are’. Commercial TMPs with capacity for open tenders have no market penetration in SA, leaving SAT&C as the only viable open tender application. The SA LGAct is silent on a monetary threshold value (Table 14) for an open or indeed, any value or method of tender including comment on electronic
applications. The SA Local Government Association Procurement section (LGAP) has interpreted this silence as an enabler for councils to self-determine the tender thresholds. This is recognised with councils Alpha and Bravo having an open tender threshold of $100k and council Charlie $200k. The trigger for initial adoption by SA councils as a compliance factor of the SA LGAct is therefore not an inhibiting factor, but rather an opportunity for councils to step away from the collective obstacles and re-engineer their own domain policies and procedures.
Councils Delta and Echo are situated in Victoria and operate under the authority of the Local Government Act 1989 (Authorised Version No 109A) (Vic LGAct). The Vic LGAct (amended in 2008 - Order in Council GG2008G032) has a prescribed requirement for all service tenders above $150k and all works tenders above $200k to be an open tender (Table 14). There is no satisfactory definition of service or works, a confusing position with compliance not known to have been tested. The method of tender is the discretion of the council with no mention, for example electronic, in the Vic LGAct. The Victorian state
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government has an e-Tender TMP (similar to SAT&C) with no council impact, ‘we don’t get into it and the state government has its own world’. Both councils Delta and Echo have adopted an e-Tender TMP post 2011 with council Delta remaining with their original TMP and council Echo changing to a second commercial TMP (Table 15 & Table 16).
Table 14 - Adoption of e-Tender through a TMP
Council Adoption factors
Initial adoption of TMP Changed from initial TMP Adopted Vendor Panel via LGA as shared service Own Vendor Panel licence Statute influence Potential Influence factor Council Alpha
Yes No Yes Yes No No threshold
Council Bravo
Yes No Yes Yes No No threshold
Council Charlie
Yes No Yes Yes No No threshold
Council Delta Yes No No No Yes >$250 &
>100k open tender
Council Echo Yes Yes No No Yes >$200 &
>100k open tender Council
Foxtrot
Yes No No No Yes >$150k open
tender
Council Golf Yes No Yes Yes Yes >$150k open
tender
Is the Vic LGAct sufficient for an adoption trigger, it doesn’t appear so. Compliance is an action to prescribed requirements and the method is the domain of the council. Both councils use a commercial TMP with the capacity for open tender, therefore ensuring compliance capability.
Councils Foxtrot and Golf are situated in NSW and operate under the authority of the Local Government Act 1993 and Regulations 2005 (NSW LGAct35). The NSW LGAct has an open tender requirement of monetary value greater than $150k. The term electronic is
prevalent in the NSW LGAct, although it does not specify e-Tender through a TMP and uses facsimile as an interpretation. The $150k is not a trigger point for adoption of e-
35 The NSW Local Government Act 1993, the Regulations 2005, the Tendering Guidelines for NSW Local Government and the Corruption Risks in NSW Government Procurement ICAC 2011 report are all referred collectively as NSW LGAct. Where specific relationship to one of these regulatory requirements is necessary, a direct citation will apply.
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Tender through a TMP, the method is the domain of the council. Both councils remain with their original commercial TMP with both having the ability for open tender, therefore a method enabling compliance to the NSW LGAct (Table 14).
Council Golf has also adopted Vendor Panel through influence of the NSW LGP (Table 19) being one of seven TMPs within this council. Councils Foxtrot and Golf continually refer to the NSW LGAct from a compliance perspective, however the NSW LGA does not specify use of e-Tender through a TMP and is therefore not a trigger for adoption.
The question posed regarding the statutes enabling or inhibiting the adoption of e-Tender and/or through a TMP is clearly no. All seven councils have adopted at least one e-Tender TMP with council Golf adopting seven TMPs. All executive (Table 15) and Procurement Department (Table 16) interviewees were aware of their respective council e-Tender through external TMPs. The two business unit users Alpha 4 and Charlie 4 (Table 16) adopted the existing council e-Tender through a TMP application for operational reasoning (Doherty, McConnell & Ellis-Chadwick 2013; Ilhan & Rahim 2017). Golf 1 and 2 as business unit users show a disparity in reasoning of adoption. Golf 1 is tangled in compliance matters to the NSW LGAct and Golf 2’s attitude to a second TMP has an avoidance implication by reliance on the Procurement Department. The common thread is statutes are not an inhibitor to adoption of e-Tender through a TMP.
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Table 15 - Executive view of adoption and assimilation of council e-Tender
Participant council
Trigger for adoption Degree of assimilation Comment Executive position Barrier to full assimilation
Council Alpha
LGA year of
procurement in 2012
Using portals on the internet
I think it has worked very well – survived legal tests
Leave it to the operations Procurement not discussed - not electronic savvy up there Council
Bravo
Over the past 4 years, changed from a
decentralised process to centre-led
Centre-led works well because of business partnering
If no panel, we just advertise or email the nominated suppliers
90 percent electronic You have to sell the concept
Council Charlie
No comment on trigger for adoption
Not a lot, complexity and confusion
Opportunities to
streamline the overhead
We don’t collaborate very well together
Not really useful, too difficult, a burden on small suppliers Council Delta No comment on trigger for adoption I am not in a position to comment – it is something I need to look into, talk to the team
Strong focus on budgeting
On time, on budget, then tendering is a smooth process
What is the right tender process for the right piece of work – the Act stipulates where you need to go to tender only
Council Echo Got the e-Tender system in December 2011
50 percent go through the e-Tender system
Its minimally effective, tick the box compliance effective
CEO attracted to
decentralisation due to lack of resourcing
Team up and partner with (external locals – sic) to build their business Council Foxtrot No comment on trigger for adoption On TenderLink –no complaints or issues
We are reviewing our engagement with TenderLink
We have to follow the regulations set out in the 2005 Act
Office of Local Govt. gives no guidance – councils left to own devices
Council Golf TenderLink for open tender (Recently – sic) bought a Vendor Panel licence
No way for the supplier to actually answer questions online
Is procurement
something they (CBRJO) want to do anymore
Importance – 5/6 out of 10 – 1 being the highest
Extremely difficult time getting buy in from council
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Table 16 - Procurement Department view of adoption and assimilation of council e-Tender
Participant council
Trigger for adoption Degree of assimilation Comment Procurement Dept. Barrier to full assimilation
Council Alpha
SA Tender was hard copy - a little bit electronic
We haven’t done a lot of reporting yet
Or evaluation
Use VP, everything from issue to award, highly auditable
Trying to get everyone to Vendor Panel – all neat, tidy, together
We haven’t really got to reporting too much Council
Bravo
SA Tenders and Vendor Panel were here when I arrived
e-Tendering is another step forward for these guys here
I think the executive & departments do see some value
I’m not into over complicating – keep it simple, smarter
Just a little bit more sophisticated stuff without burdening
Council Charlie
Other councils started using it
There’s a lot of capacity that we are not familiar with
SA Tenders is just a system – Vendor Panel is a complete system
The idea of Vendor Panel was so we didn’t have to get involved
Based on my 30 years doing tendering in this council Council
Delta
A maturity model, from hard copy, email to the first step of a portal
We don’t have enough panels – enough of that larger conversation
Vendors say it is not easy, 3 4 5 years ago it would have been pretty good
Now I have to hand over, new manager, this is what it looks like – not fully rolled out
In Government you cannot fail
Council Echo I was at another council, everything was manual
Assuming they use the tools and template – follow the bouncing ball (manual – sic)
Smarter, not harder, efficiency gains compared to manual systems
Question - Is in what an Excel spreadsheet – Yeah (
I get it – imperatives are totally different. Commercial
imperatives are very different Council
Foxtrot
TMP – 6/7 years Use yellow pages - history No data Department not stable Whole working life in this
department – waiting retirement
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Table 17 - Business unit users view of adoption and assimilation of council e-Tender
Participant council
Trigger for adoption Degree of assimilation Comment business unit users Barrier to full assimilation
Council Alpha
Alpha 1&2 were stretched way too thin
I would come back and do the scoring and selection in Vendor Panel
Vendor Panel is basically in our heads when with online tender
To be honest, most just hand over stuff to Alpha 1 & 2
Computers, IT, second nature to me – others definitely not Council
Bravo
A business unit user was not made available for interview Council
Charlie
Historically real trust with contractors, now auditing
An evaluation through Vendor Panel. We put our own weighting into Vendor Panel
New system far more effective – assured of right process, ticked all the boxes
Rely heavily on procurement team member for advice
Using online tendering gives us real ability to get savings
Council Delta
A business unit user was not made available for interview
Council Echo A business unit user was made available, however due to maternity leave aspects, a suitable date could not be determined Council
Foxtrot
A business unit user was not made available for interview Council Golf
(1)
People are going out electronically although I do not know how they meet the intent of the Act
The majority of panels used would not be our own (SD293). Not rocket science, the matrix thing is pretty good
It’s not a procurement section (SD296). Question – thresholds, does that work – NO
Routine procurement – panel perhaps..
>$150k statutory process
I would still buy it and stick it in, that’s what I would do. People sleep at night, happy, that’s what were here for Council Golf
(2)
In process of setting up Vendor Panel – we don’t have a procurement section
We do our own assessment – same as we have always done it – spreadsheets (
We close on TenderLink auto – and the two tender boxes (manual)
Comes down to what people are used to (SD333). Subject matter experts - engineering space
Going to tender is so hard and it’s not a hard process
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Table 18 - Outcomes of adoption of e-Tender
Outcome of adoption Facilitation Barriers
The council’s inability to re- engineer it’s tender process
Refocus on effectiveness Belief the statutes do not provide flexibility The presence/absence of the
appropriate competencies among staff
Diffusion of e-Tender through a TMP process to all business unit users across the council
Reliance on council Procurement Department The appropriateness or
inappropriateness of the council’s culture
Move away from the paradigm of adoption will enable effectiveness
No understanding of technology integration into e-Tender and the TMP The non-availability of
appropriate standards
Opportunity for recognition of the need for specific council domain procurement policies and procedures
Entrenched within the original adoption purpose
Bold is the summarised outcome – the themes that fall naturally into explanation