Local tenders get more weighting

Procurement policy to be updated

Procurement policy to be updated

A new procurements policy that will see greater weight given to local economic development and the use of local firms by the council has been approved by Gisborne District Council’s performance, audit and risk committee.

The committee authorised staff to amend the procurement documents so local economic development was given a 5 to 20 percent weighting. It also wants staff to update the procurement policy. It instructed staff to do a procurement review on suppliers with contracts greater that $250,000 a year.

The staff report included a list of more than 90 suppliers who had received contracts averaging more than $250,000 a year during the past three years. They ranged from $25 million over that period to Fulton Hogan down to $250,451 for a local company.

Operations group manager Barry Vryenhoek said staff had decided to use an evaluation system that was like many other councils. Graeme Thomson said he would like to see the word “may” used so that the council was not committed with every tender and contract.

Support local business vs save ratepayer money

Chief executive Judy Campbell said if a contract was tendered it was a formal process and this would have to be built into the system or it could be challenged. It was a case of weighing up the need to support small businesses against saving ratepayers’ money. One case she had looked at showed a difference of tens of thousands of dollars between a local and outside firms.

Committee chairman Brian Wilson said this was only a weighting system. It would vary from contract to contract.

Does national company with local contractors count?

Mrs Campbell said it was sometimes difficult to determine what was a local company. The wastewater contract had been awarded to a national company but all the sub-contractors were local. The same applied to the two large roading companies whose workers were local.

Pat Seymour felt a figure should be put in and it could be as much as 10 percent. There would be a different range of determinants between say roading and building.

For those who had read through the list of top suppliers, it was fascinating to see the number of consultants used. The council should ask for a review of all suppliers who received over $50,000 a year.

Mr Wilson said there should be a greater range to the weighting — 10 percent was too low for some contracts and too high for others.

10 percent weight better than previous 'miserly' 1 percent

Josh Wharehinga said he was glad the council was looking at its procurement policy. The previous weighting of 1 percent struck him as too low and quite miserly. He supported a range of weighting because 10 percent could be quite a high figure as contracts moved into the millions.

Craig Bauld said the weighting system would encourage people to use local sub-contractors to have the best chance of getting a tender. Bill Burdett strongly supported local preference. The council was the third-biggest spender in the district and had an obligation.

Business owners needs the opportunity

Mayor Meng Foon said the biggest matter to him was the little people with their own business. The first thing they wanted was the opportunity to put in a price. The council should also consider location when it was considering contracts for small communities such as Tikitiki.

Mr Thomson said there was a huge group who did not provide services to the council but were running businesses and paying rates. The council should make sure it was not making things harder for them.

Mrs Campbell said when taking on a more expensive contract because they were local, they would be gifting money to a single enterprise often owned by a single person, versus saving ratepayers’ money by going for the best price and spreading the benefit across the district.

“Just be careful.”

A new procurements policy that will see greater weight given to local economic development and the use of local firms by the council has been approved by Gisborne District Council’s performance, audit and risk committee.

The committee authorised staff to amend the procurement documents so local economic development was given a 5 to 20 percent weighting. It also wants staff to update the procurement policy. It instructed staff to do a procurement review on suppliers with contracts greater that $250,000 a year.

The staff report included a list of more than 90 suppliers who had received contracts averaging more than $250,000 a year during the past three years. They ranged from $25 million over that period to Fulton Hogan down to $250,451 for a local company.

Operations group manager Barry Vryenhoek said staff had decided to use an evaluation system that was like many other councils. Graeme Thomson said he would like to see the word “may” used so that the council was not committed with every tender and contract.

Support local business vs save ratepayer money

Chief executive Judy Campbell said if a contract was tendered it was a formal process and this would have to be built into the system or it could be challenged. It was a case of weighing up the need to support small businesses against saving ratepayers’ money. One case she had looked at showed a difference of tens of thousands of dollars between a local and outside firms.

Committee chairman Brian Wilson said this was only a weighting system. It would vary from contract to contract.

Does national company with local contractors count?

Mrs Campbell said it was sometimes difficult to determine what was a local company. The wastewater contract had been awarded to a national company but all the sub-contractors were local. The same applied to the two large roading companies whose workers were local.

Pat Seymour felt a figure should be put in and it could be as much as 10 percent. There would be a different range of determinants between say roading and building.

For those who had read through the list of top suppliers, it was fascinating to see the number of consultants used. The council should ask for a review of all suppliers who received over $50,000 a year.

Mr Wilson said there should be a greater range to the weighting — 10 percent was too low for some contracts and too high for others.

10 percent weight better than previous 'miserly' 1 percent

Josh Wharehinga said he was glad the council was looking at its procurement policy. The previous weighting of 1 percent struck him as too low and quite miserly. He supported a range of weighting because 10 percent could be quite a high figure as contracts moved into the millions.

Craig Bauld said the weighting system would encourage people to use local sub-contractors to have the best chance of getting a tender. Bill Burdett strongly supported local preference. The council was the third-biggest spender in the district and had an obligation.

Business owners needs the opportunity

Mayor Meng Foon said the biggest matter to him was the little people with their own business. The first thing they wanted was the opportunity to put in a price. The council should also consider location when it was considering contracts for small communities such as Tikitiki.

Mr Thomson said there was a huge group who did not provide services to the council but were running businesses and paying rates. The council should make sure it was not making things harder for them.

Mrs Campbell said when taking on a more expensive contract because they were local, they would be gifting money to a single enterprise often owned by a single person, versus saving ratepayers’ money by going for the best price and spreading the benefit across the district.

“Just be careful.”

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