This Direction deals with procurement of services by or for a government agency within the meaning of the Public Works and Procurement Act 1912 (as amended).

From 31 January 2018 a standard commercial framework will apply to the Performance and Management Services Prequalification Scheme, including the following elements:

• Standard definitions for engagement and role types
• Capped rates for standard engagement and role types
• Discount structure
• Capped expenses
• Target resource mix

The Procurement Board allows an agency to directly engage a single supplier that complies with the standard commercial framework up to a value of $250,000 excluding GST for a single engagement.

The Procurement Board requires an agency procuring under the Performance and Management Services Prequalification Scheme as part of a High End Strategy engagement type, from a supplier listed below or where the engagement is operating outside the standard commercial framework to:

• have the Secretary, Executive Agency Head or cluster Chief Financial Officer approve the engagement, but only once satisfied that work cannot be undertaken under the standard commercial framework
• ensure engagements are competitively bid (with at least three bids) to ensure value for money, as there will be no threshold for direct engagement of suppliers who are non-compliant with the capped rates
• report information about the engagement upon approval through the Board’s Major Supplier's Portal.

The standard commercial framework applies to the majority of engagement types under the Performance and Management Services Prequalification Scheme. For other engagement types the compliance requirements under the Performance and Management Services Prequalification Scheme remain unchanged. Detailed information is published on the ProcurePoint website for suppliers and agencies.

All Performance and Management Services Prequalification Scheme suppliers have the opportunity to accept the standard commercial arrangements.

The Board’s Major Supplier's Portal enables government to better understand the types of engagements being procured outside the standard commercial framework.

The Board has published the list of non-compliant suppliers as part of this Direction. The Executive Director NSW Procurement has discretion to include additional suppliers or exclude suppliers from this list.

This Direction applies irrespective of the procurement method by which the agency has engaged the supplier, and includes engagements undertaken through prequalification schemes or by tender.

Context

The Board has adopted a relationship management framework covering the procurement of general consultancy services. The framework establishes appropriate governance mechanisms, while driving quality and the best possible value for money from engagements.

In 2017, NSW Procurement completed the Business Advisory Services (BAS) Program that defined a significantly improved commercial model for the Performance and Management Services (PMS) Prequalification Scheme.

The Board will report on progress to the Minister for Finance, Services and Property every six months. This report will include a comparative analysis across clusters on trends in the number of engagements, total spend and rating results, for each of the major suppliers.

This will assist agencies to gain a greater understanding of what is being procured from the consulting industry and how to access services, while all suppliers will benefit from more information about planned engagements. Agencies and suppliers will benefit from reduced red tape in the procurement process, through strengthened probity and contestability frameworks implemented progressively.

Senior representatives of the government will continue to meet with major suppliers of consultancy and other services to ensure that agency procurements are aligned with business needs and that agencies are achieving best value for money from those engagements, including sharing the outcomes of those engagements across agencies where it is appropriate.

In approving engagements, agencies should have regard to the standard commercial framework as published by DFSI and carefully scrutinise any request which is outside of these arrangements. Engagements that do not align with the standard commercial framework must be reported by agencies on the Major Supplier's Portal.

The Board has published further guidance about procuring consultancy services on the ProcurePoint website.

DFSI will provide cluster Chief Financial Officers and Chief Procurement Officers with monthly reports consolidating all engagements reported under this Board Direction.

DFSI has developed the Major Supplier's Portal to enable agencies to lodge this information directly, and to view all non-compliant engagements from all agencies. The Quick 'How To' Guide gives guidance as to how to use the portal.

This Direction takes effect from 5 April 2018 until withdrawn.

Listed non-compliant suppliers as at 5 April 2018

Boston Consulting Group

McKinsey & Company