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Decision tree for level 1 agencies to assess risks

Level 1 accredited agencies are required to use the decision tree below to determine the applicable maximum based contract value for each procurement event valued over $20 million.
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A graphic version of this decision tree is also available. Download the decision tree. JPG, 82.05 KB.

Nine key questions are used to assess the procurement-specific risks of the event.

Nine key questions

  1. Organisation / people
    Do you have the capability and capacity to procure the goods or services as required (Yes or No)?
  2. Service delivery
    Have you analysed the latest market trends (Yes or No)?
  3. Service delivery and reputation
    Do the goods and services have a low impact to your agency's core operations and reputation (Yes or No)?
  4. External
    Is there a low impact to the supplier market from this event  (Yes or No)?
  5. Financial
    Is the total cost of ownership low, relative to the Agency's spend profile (Yes or No)?
  6. Financial
    Are the benefits of demand aggregation low (Yes or No)?
  7. Services delivery / regulatory / work health and safety
    Is there limited impact on social, economic and environmental policy objectives (Yes or No)?
  8. Service delivery
    Is there low degree of customisation required (Yes or No)?
  9. Service delivery
    Is there high ability to substitute the product or supplier (Yes or No)?

How to determine risk?

  • Low risk procurement event, $50m maximum contract value (MCV)
    • You  have answered 'Yes' to 5 or more questions numbered 1 - 7
  • Medium risk procurement event, $35m maximum contract value (MCV) 
    • You  have answered 'Yes' to 4 or less questions numbered 1 - 7
    • You have answered 'Yes' to 1 or more questions 8 and 9
  • High risk procurement event, $20m maximum contract value (MCV)
    • You  have answered 'Yes' to 4 or less questions numbered 1 - 7
    • If you have answered 'No' to questions 8 and 9