All procurement exercises require a degree of planning, but the value, complexity and risk level will determine whether you're required to record this information.

Planning ensures that you have thought about:

  • what you need
  • the variety of options that are available to you to approach the market and obtain the goods or services you need.

While planning might take time initially, it inevitably saves time in the long run and makes it easier to manage the contract.

What level of planning is required?

The value of the goods or services determines what documentation is required for your procurement.

However, when the goods or services have been determined as high risk it may be necessary to contradict the standard procurement process. You should contact Procurement if you believe your procurement falls into that category.

Under $5000

You're not required to develop a plan. We recommend that you check if the item can be procured from a supplier via 1 of our primary channels:

If the item is not available through those channels, then the it should be procured by either:

Between $5000 and $10,000

You'll need to develop a brief plan outlining the:

  • need
  • market
  • approach to market
  • suppliers, with justification of your choice.

You will need to obtain at least 2 quotes, in accordance with the Purchasing Procedures [9.40.01].

Between $10,000 and $100,000

You'll need to create a procurement plan outlining:

  • the need
  • the market
  • the approach to market
  • the suppliers, with justification of your choice
  • an overview of risks involved.

You will need to obtain at least 3 quotes, in accordance with the Purchasing Procedures [9.40.01].

Above $100,000

You must:

  • complete a strategic procurement plan
  • undertake an open tender, unless you can provide valid reasons for limiting the market

We recommend that you contact Procurement to ensure UQ’s terms and conditions are adhered to. Using UQ’s standard terms and conditions:

  • minimises the risk to the University
  • establishes standardised terms on which UQ will contract with suppliers
  • means additional legal advice may not be required, and therefore an appropriate delegate can sign off on them promptly.

Completing a procurement plan

When completing a procurement plan, the amount of content should be relevant to the value, complexity and risk level of the procurement exercise.

Complete a procurement plan template (DOC, 112KB) and use the headings below for guidance.

Demand analysis

A demand analysis will determine the requirement for the product or service, and will assist in avoiding a failed procurement or a cost blowout.

You must determine:

  • why you need this product or service
  • if there are substitute products or services
  • whether you're purchasing multiple contracts for future years or this is a one-off purchase
  • who the users and stakeholders are for this product or service
  • if other faculties or divisions require the same item and whether you can collaborate to make 1 purchase
  • the time frame for the purchase, including expected delivery lead time.

Market analysis

Completing basic market research is critical for ensuring value for money. Without this information, you can’t:

  • determine whether what you are trying to purchase is achievable
  • decide the best way to approach the market.

You should identify:

  • who the potential suppliers are
  • what alternative products or services exist
  • the degree of competition, including new and untested products and services
  • pricing structures, including typical prices and quantity discounts
  • the capability of suppliers to meet the technical requirements and supply required quantities within your time frames.

Identifying potential suppliers

When identifying potential suppliers you will need to use a combination of:

To identify the most effective approach to the market, refer to the methods of approaching the market guide (PDF, 65KB).

Risk assessment

Risk assessment is an ongoing process throughout both the planning and management stages. It seeks to tackle problems before they occur by setting measures in place to minimise the impact of risks or the likelihood of them occurring.

You need to assess each identified risk as to whether it can be accepted and managed, this includes risks that are:

  • acceptable even they are almost certain to occur, because the consequences or impact are insignificant
  • unacceptable even if highly unlikely, because the consequences would be severe.

Read the Enterprise Risk Management Policy [1.80.01] for more information on UQ’s risk management approach.

Writing specifications

All purchases where suppliers are invited to quote require you to write specifications, which are also known as a ‘statement of works’ or a ‘terms of reference’.

A specification writing guide (PDF, 464KB) has been developed to assist you in writing specifications.

Setting key performance indicators

You must set key performance indicators (KPIs) to:

  • mitigate contract risks
  • manage contract performance.

To measure a supplier's performance against KPIs, you must include the details of the performance measurement in the contract schedule.

You must ensure that all KPIs:

  • are clear, measurable and have consequences if they are not met
  • identify whether your objectives have been met
  • give the supplier an incentive to correct their performance if objectives are not met
  • include consequences, such as penalty payments or escalation within the supplier’s organisation, if the performance is unsatisfactory.

It is important to ensure both parties mutually agree on these measures.

Generally it's recommended you develop no more than 6 to 8 outcome-focused and measurable KPIs to ensure effective contract management, but in complex procurement contracts you may need more.

Performance measures can be either generic or specific, and can include:

  • delivery
  • product or service quality
  • service
  • best practice and continuous improvement
  • asset service availability
  • customer focus
  • environmental factors
  • ethical and social issues.

Business-critical contracts should generally contain a more comprehensive list of KPIs than routine contracts, given their increased risk profile.

There may also be a need to modify, add or remove KPIs during the lifetime of the contract, but all new KPIs must be agreed by the UQ project team before they're incorporated into contracts.

Planning for assets

The appropriate disposal of surplus plant and equipment is an important part of any procurement plan. Considering the eventual decommissioning and disposal of assets at the procurement planning stage can have dramatic effects on the total cost of ownership of an asset. In some cases leasing an asset will be a more economical option.

When planning procurement of assets, including plant and equipment, you should consider:

  • if ownership is the most efficient option or whether leasing the equipment would be more cost-effective
  • if the asset will be used by UQ for its entire economic life, or if it will be over-used or under-used
  • the likelihood of there being a point in the asset's life where it is more economical to replace it.