Method of procurement eg Request for Tender selection from a panel cheapest of

Method of procurement eg request for tender selection

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Method of procurement (e.g. Request for Tender, selection from a panel, cheapest of three quotes, etc.) Contract type, special conditions Supplier evaluation criteria Selected supplier © Elemental Projects 2016
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PMGT5871 Project Process Planning & Control Topic 7 Topic 7 9 The University of Sydney Page 17 Essential elements of a contract A contract is a legally binding agreement between two parties Essential elements of a contract: Principal of Offer and Acceptance – Something must be offered and that offer must be accepted by the other party Principal of Form/Consideration – Both parties must get something of value out of the agreement, usually services in exchange for money Principal of Intent – Both parties must intend to enter a legally binding agreement Principal of Legal Capacity – Both parties must be eligible to create a contract – i.e. not a minor, not insane, not under the influence of drugs/alcohol, not bankrupt, not a prisoner Principal of Legality of Object – The agreement must not obligate either party to perform an illegal act Principal of Consent – Both parties must freely consent to enter into the contract – i.e. not mistakenly, under duress, through trickery/coercion, etc. © Elemental Projects 2016 The University of Sydney Page 18 Procurement Law When you engage a supplier on behalf of your organisation, you act as a legal agent of that organisation The contracts that you establish legally bind the organisation to the terms and obligations in the contract Tendering and contract management is subject to procurement law “Golden rules” when running a tender: Stick to the published evaluation criteria (legal requirement) Describe the need, don’t over-specify the solution or you may not be able to accept an offer which contains a better solution than the one you asked for – i.e. if you tender for X then you may not accept an offer for Y, or even X+Y (legal requirement) Probity, ethics and transparency are essential, especially for government organisations © Elemental Projects 2016
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PMGT5871 Project Process Planning & Control Topic 7 Topic 7 10 The University of Sydney Page 19 Best when the scope is unclear/ dynamic and risk is high Types of contracts Fixed Price Total price for a defined product/service is fixed from the outset Payments are usually periodic, based on milestones Requires the buyer to precisely specify the product/service scope, quality requirements Incentivise by including financial penalties/rewards for early/late completion of milestones and/or meeting quality requirements (e.g. performance tests) Cost Plus Payments are made to the seller for all costs incurred for the completed work, plus a fee representing seller profit Payments are usually periodic, based on intervals (e.g. monthly)
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