What is Piggybacking (Cooperative Procurement)

TRANSCRIPT OF THE VIDEO

What is cooperative procurement? Sounds like some airy fairy type of procurement methodology. Well, it's not. Stick around and I'll tell you what it is.

Good day everyone, Simon Zarifeh here from Shrewd. We provide commercial assistance to the Commonwealth to help the Commonwealth successfully deliver value for money projects.

What is Cooperative Procurement?

So what is cooperative procurement? Well, if you look at the Commonwealth procurement rules, cooperative procurements involve more than one relevant entity as the buyer, i.e. two agencies go and buy something together or by joining an existing contract of another entity.

In my experience, two agencies going out and buying something together is very rare. It does happen. I'm aware of it happening. I was originally involved in one or initially involved in one where we were going to go out as two agencies, but it all got too hard. It does happen.

I know it happens, but they are the anomaly. They are rare, as in that arrangement is rare.

Piggybacking Off a Panel

However, piggybacking off a panel or an arrangement established by one agency is not rare. It is in fact very common.

And if a certain agency develops a good panel, then you will find that many agencies will want to piggyback off that panel and use it. And that piggybacking concept is cooperative procurement as defined under the CPS.

Rules About Piggybacking

So the next thing I want to talk to you about is, are there any rules about piggybacking? Can any agency piggyback off another agency's panel that the other agency has created?

And the answer is yes, there are some rules and you'll find those in 4.14 of the CPS. There's two key factors. The relevant documentation, so the market documentation that established the panel and the contract itself. So in the deed of standing offer that's what's used most of the time.

The Market Documentation and the Contract

In the market document and the deed of standing offer, you must have specified that this approach is able to be piggybacked or used by other agencies or departments of the Commonwealth.

As long as a clause like that is in the RFT or the RFQ document, so in the market document and also in the contract, then legally other agencies are able to piggyback off the panel that's been created. Those are the two criteria.

And in fact, if an agency or if someone else from another agency asks whether they can use your panel, when you write back and say, yes, you might just want to refer to 4.14 and say, you can use it because the RFT or the RFQ document and the deed of standing offer both included clauses that allow use by other departmental agencies of the Commonwealth.

Value for Money and Scope of Work/Services

Alrighty, moving right along. What do I need to think about when piggybacking?

Well, if you want to use the panel that was created by another agency, i.e. you want to piggyback off their arrangement, then you still need to ensure that when you use that other agency's panel, that you are still getting value for money and that the goods or services that you are procuring or purchasing from that panel are the same as that which were provided for within the relevant contract.

What does that mean? Basic example, let's say an agency has put in place a panel for legal services. Then obviously you can only purchase legal services from that panel.

You cannot go then and buy accounting, or auditing, or probity. Actually probity, you probably could, but you can't go and buy services that are not legal services from that panel because it's only designed for use for the purchase of legal services.

You need to make sure that whatever you are purchasing is what the seller or the panelist has been appointed to the panel to provide. That way, you are purchasing goods or services that are within the scope of the services or the scope of work on the relevant panel.

But as I say here, you still need to ensure value for money is achieved.

The Terms and Conditions

And then you need to ensure that when you then use, when I say use, you're going to sign up to an official order or a work order under that deed of standing offer that is going to form the contract for the supplier to provide you the goods or services. You need to make sure that when you do that, you're not materially altering the terms and conditions.

Now, each agency when they piggyback off a panel and when they use that panel can create and add their own specific terms and conditions that are applicable for their agency.

You may have more stringent security requirements, or you may have more stringent confidentiality requirements, or you may want to change the IP regime, or the insurance regimes, et cetera.

You can do all of that as long as you're not materially, which is substantially, as long as you're not substantially altering the terms of the contract, then you are good to go.

A Recap on The Rules on Piggybacking

So those rules again, when you piggybacking and you're using another agency's panel,

make sure you're still achieving value for money, make sure that the goods and services that you're buying are only the goods and services for which the panelist is on the panel for,
and make sure that when you alter the terms and conditions or add additional terms and conditions into the work order or the official order, that you are not materially altering the deed or the contract terms that were set when the panelists signed up to the panel.

So that is an overview of cooperative procurement or piggybacking in less than five minutes. Actually, it's not. It's nearly six minutes, but anyway you get the point.

If you got any questions, feel free to get in touch, simon@shrewd.com.au, or 1800 SHREWD, which is 1800 747 393. I hope that helps.