M A Purdy On-Line - Bid Tip 18

An exemption from tendering essentially means that approval has been given for a specific procurement opportunity to proceed without being bound by normal public sector purchasing guidelines.

At the discretion of the approving officer the standard practice of obtaining multiple quotations may also be waived.

Authority to Grant

In theory all exemptions from tendering should be granted by the permanent head of a government agency.

In practice the authority to issue a certificate of exemption may be delegated to another accountable officer more directly involved in procurement management.

Reasons for Granting an Exemption

There are a range of reasons why an exemption maybe granted which include:

Absence of competition due to unique product or service design
Prototype product intended for pilot project usage
Commercial in confidence considerations such as copyright or patent
Prior failed tender process where no compliant / conforming tenders where received
Matters of high importance such as products and/or services needed urgently to ensure public safety
Provision of services such as maintenance and upgrades relating to a prior procurement process where the cost of engaging a new supplier would be significantly more expensive
Acquisition of certain special types of goods such as antiques or works of art
Unique product or service design flowing from a design competition or industry consultation

The desire to avoid competition is not a valid reason for granting an exemption.

Appealing an Exemption

The right of appeal by external parties is entirely dependant on the specific laws and government regulations of the governing jurisdiction.

In broad terms suppliers cannot appeal an exemption, but may make a formal compliant/representation to the responsible minister.

In most cases the minister only needs to satisfy his/her self that correct processes were followed in order to dismiss an appeal.

Schedule of Exempt Products and Services

Most governments publish a list of products and services that are globally exempt from public tendering. All suppliers should maintain an up to date library of exemption schedules to avoid fruitless bid capture activities and potential misunderstandings.

The Politics of Appealing

Suppliers need to give careful consideration as to whether or not appealing an exemption is in their best long-term commercial interest.

Two potential negative outcomes of an appeal are:

The appellant supplier being publicly exposed as inferior to the preferred supplier's
The potential for long term damage to the trading relationship with affected agency

Certificate of Exemption

The most common certificate forms are:

Single Page Authority
Checkbox based form
Briefing Note

Single Page

A single page authority comprises

Name of Procurement Project
Procurement Project Reference Number
Name of Agency
Reasons for Exemption
Accountable Officers name and signature
Witnesses name and signature
Agency seal including date and time

Checkbox Form

The checkbox form often used where exemptions are common typically includes all of the information found on the single page authority in addition to �process sign-off� checkboxes and comment areas.

Briefing Note

A briefing note will contain all of the details found in the other two formats in addition to:

Very detailed reasons for the exemption
References to other departmental and whole of government policies
Procurement Risk Analysis

This type of document is normally used as a basis for ministerial briefings.