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).

Reporting consultant expenditure

Agencies are required to report consultant expenditure in accordance with the Annual Report requirements in the Government Sector Finance Act 2018.

Consultant definition

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 (P&MS Scheme) engagement types 1 to 12 which includes the following elements:

• Standardised resource type

• Capped daily resource rates

• Discount structure

• Expense policy.

The Standard Commercial Framework and additional governance requirements are not applicable to engagement types 14 and 15. A separate commercial framework applies to engagement type 15, as outlined in Procurement Board Direction PBD 2022-02.

Suppliers prequalified for the P&MS Scheme are listed on the buy.nsw website.

Suppliers outside the Standard Commercial Framework

The following prequalified P&MS Scheme suppliers have not accepted, and are therefore outside, the Standard Commercial Framework (“OSCF Suppliers”). All future engagements with these suppliers are subject to the additional conditions and governance arrangements described below.

• Bain & Company

• Boston Consulting Group

• Cambridge Economic Policy Associates

• L.E.K. Consulting

• McKinsey & Company

• Partners in Performance

• Port Jackson Partners

Any revision of this list requires approval by the Chair of the Procurement Board and notification to the Procurement Board.

Conditions and governance arrangements for engagements outside the Standard Commercial Framework

Additional conditions and governance arrangements apply for each engagement that is outside the Standard Commercial Framework, in the following scenarios:

• from a prequalified P&MS Scheme supplier in engagement type 1 ‘Government & Business Strategy’ that has not accepted the Standard Commercial Framework (ie an OSCF Supplier).

• from any prequalified P&MS Scheme supplier that has accepted the Standard Commercial Framework, but where the engagement proposal is not compliant with any element of the Standard Commercial Framework.

Limitation on scope of services

• OSCF Suppliers are prequalified and permitted to provide business advisory services under engagement type 1 ‘Government & Business Strategy’ only.

• OSCF Suppliers are no longer prequalified to provide business advisory services under engagement types 2 to12.

• Note: These additional conditions and governance requirements are not applicable to engagement types 14 and 15.

Direct engagement value thresholds

• Where the estimated cost of an engagement type 1 ‘Government & Business Strategy’ engagement is less than or equal to $250,000 (excluding GST), the Agency may directly engage the OSCF Supplier following one (1) written quotation.

• In limited circumstances, when a flow-on engagement becomes necessary, the total value of the first engagement and related flow on engagement is not to exceed three times the initial contract value, or $500,000 (excluding GST), whichever is the lesser amount.

• Where an Agency’s financial thresholds are more stringent than the above thresholds of the P&MS Scheme, the Agency thresholds take precedence.

• Note: For any competitive tenders under engagement type 1 ‘Government & Business Strategy’, Agencies are permitted to invite OSCF Suppliers to participate in such competitive tenders.

Secretary approval

• In addition to cluster-specific Procurement delegation approval requirements, engagements of OSCF Suppliers require Secretary approval prior to any contract sign off with the supplier.

• Agencies must seek Secretary approval and keep a record of all engagements approved by the Secretary that do not comply with the Standard Commercial Framework, both from OSCF suppliers and from suppliers who have accepted the Standard Commercial Framework.

Reporting

• OSCF Suppliers must report all their engagements with NSW Government to NSW Procurement. NSW Procurement shall report these engagements at least annually to the Procurement Board.

• Agencies are no longer required to report non-compliant engagements on the Major Supplier Portal, however, Agencies are required to keep internal records of engagements with OSCF suppliers and SCF suppliers that do not comply with any element of Standard Commercial Framework

Context

In 2017, NSW Procurement defined a significantly improved commercial model for the P&MS Scheme. The Standard Commercial Framework commenced for major suppliers on 8 January 2018 and was progressively adopted by other suppliers during 2018 and then subsequently refreshed in January 2020.

NSW Procurement will report to the Minister for Finance and Small Business annually. This report will include a comparative analysis across clusters on trends in the number of engagements, total spend, use of the Standard Commercial Framework and other insights regarding use of professional services suppliers.

This Direction takes effect from 1 October 2021 until withdrawn.