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).

Consultant definition

Agencies are required to report consultant expenditure in accordance with the Annual Report Regulation 2015.

A consultant is defined as a person or organisation engaged under contract on a temporary basis to provide recommendations or professional advice to assist decision-making by management. Generally it is the advisory nature of the work that differentiates a consultant from other contractors.

Services provided under the NSW Government Legal Services Panel are excluded from the definition of a consultant for annual reporting purposes.

Standard commercial framework

A standard commercial framework applies to the Performance and Management Services Prequalification Scheme (PMS Scheme) engagement types 1 to 13, including the following elements:

• Capped resource rates

• Discount structure

• Capped expenses and standard expense types

The Procurement Board allows an agency to engage directly a single supplier that has accepted the standard commercial framework up to a value of $250,000 excluding GST for a single engagement. The PMS Scheme supplier list published by NSW Procurement on the buy.nsw website specifies which suppliers have accepted the standard commercial framework.

Governance arrangements for non-compliant engagements

A more stringent approval process is required for each engagement that does not comply with any element of the PMS Scheme standard commercial framework, including any of the following scenarios:

• from a supplier that has not accepted the standard commercial framework

• where the engagement proposal is not compliant with the standard commercial framework.

Approval of non-compliant engagements require the following actions for each engagement:

• 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

• report information about the engagement upon approval through the Board’s Major Supplier's Portal.

Agencies must report any contract with a supplier that has not accepted the standard commercial framework, including contracts outside the PMS Scheme.

The following suppliers have not accepted the standard commercial framework:

• Boston Consulting Group

• Cambridge Economic Policy Associates

• L.E.K. Consulting

• McKinsey & Company

• Partners in Performance

• Port Jackson Partners

• Promontory Australasia

The Executive Director NSW Procurement is authorised to add or remove suppliers from this list.

Context

In 2017, NSW Procurement completed the Business Advisory Services (BAS) Program that defined a significantly improved commercial model for the PMS Scheme. The standard commercial framework commenced for major suppliers on 8 January 2018 and was progressively adopted by other suppliers during 2018.

The Board will report on progress to the Minister for Finance and Small Business every six months. This report will include a comparative analysis across clusters on trends in the number of engagements, total spend and other insights regarding professional services suppliers.

Tresaury provides cluster Chief Financial Officers and Chief Procurement Officers with online access to reports consolidating all engagements reported under this Board Direction.

This Direction takes effect from 26 March 2019 until withdrawn