The Premier's Department is distributing to all agencies an Office of Public Management guideline which outlines the processes of costing in-house activities and making cost comparisons between tenders. The context of the document is the Government's initiative for agencies to pursue the competitive tendering of in-house services and to contract out where appropriate.

The document, titled Competitive Tendering and Contracting Out - Costing Guidelines, includes advice on the policy of competitive neutrality, criteria for including and excluding costs, the allocation of indirect costs, the treatment of redundancy costs, present value analysis, contractors' liabilities and a range of other relevant issues.

The document does not replace experience and expertise in costing and financial analysis. However, it is important that managers understand these processes before making decisions based on the outputs of them.

You will shortly be receiving an initial supply of the guidelines and I ask that you make them widely available within your organisation.

Other publications, previously distributed, are Competitive Tendering and Contracting Out Guidelines, which provides general guidance on policy implementation, and The CSG Experience, which provides insights from case experience. Additional copies of all publications can be obtained by faxing a request to the Office of Public Management, fax (02) 228-3277. General inquiries may be directed to Malcolm Richardson on (02) 228-4802.

R. G. Humphry,
for Director-General.