Accreditation Program Requirements for Construction Procurement
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Policy
1. Introduction
This document provides information about the Accreditation Program for Construction Procurement. The Accreditation Program for Construction Procurement is one element of the Construction Procurement Operating Model.
Agencies considering applying for accreditation and accredited agencies are expected to read this document in conjunction with all other documents in the accreditation toolkit. Appendix B of this document explains the content of these other documents.
The Accreditation Program for Construction Procurement took effect from 1 October 2020.
Published by NSW Public Works, Department of Regional NSW. Department reference number: DOC20/408580.
2. Program overview
2.1 Background
Under section 174(1) of the Public Works and Procurement Act 1912, the NSW Procurement Board has the power to establish a scheme (a program) under which a NSW Government agency accredited by the board may procure goods and services for that agency or for other government agencies, subject to any terms and conditions of its accreditation.
All NSW Government agencies must exercise their procurement functions in accordance with the Accreditation Program for Construction Procurement, as per section 176(1)(a) of the Public Works and Procurement Act.
2.2 Scope of the Accreditation Program
The Accreditation Program for Construction Procurement (the program) applies to the procurement of construction services and excludes goods and services procurement.
In the glossary section of the NSW Procurement Policy Framework, the NSW Procurement Board defines construction services as:
“services relating to the construction of buildings or works, including pre-erection works, construction work, and repairs, alterations and restorations”.
The program focuses on all 3 phases of the procurement process, as defined in the NSW Procurement Policy Framework – that is, plan, source and manage.
2.3 Effect of accreditation
Agencies accredited under the program have greater autonomy to procure construction services than unaccredited agencies, as summarised in the table below.
| Activity | Accredited agency | Unaccredited agency |
|---|---|---|
| Undertake construction procurement valued less than or equal to $1.3 million (excluding GST) | Yes | Yes |
| Undertake construction procurement valued over $1.3 million (excluding GST) | Yes | Only if an accredited agency provides assurance for the procurement activity. |
2.4 Objectives of the program
Given the level of autonomy offered to accredited agencies, the program aims to ensure that accredited agencies have the capability and capacity to procure construction services in an efficient and effective manner.
The program is designed to ensure this by:
- determining whether agencies meet the minimum standard to conduct construction procurement
- managing construction-specific procurement risk in an efficient and effective manner
- encouraging agencies to align their construction procurement programs with strategic priorities and values
- driving continuous improvement and capability development.
2.5 How the program works
The program has 3 components:
- accreditation assessment
- annual self-reporting
- trigger events management (if applicable)
To become accredited, an unaccredited agency must undergo an accreditation assessment (see part 4 below). During this assessment, the agency must demonstrate that it meets the minimum standard for accreditation.
Accredited agencies must meet annual self-reporting obligations to maintain their accreditation (see part 5.2).
As part of the annual self-reporting process, accredited agencies must monitor and self-report on trigger events (see part 5.3). Trigger events are key changes that may impact an accredited agency’s ability to meet its responsibilities as an accredited agency.
2.6 Who can apply for accreditation
All “government agencies”, as defined in section 162 of Public Works and Procurement Act 1912, can apply for accreditation.
Local councils, local authorities, and the Parliament of New South Wales cannot apply for accreditation. Further, state-owned corporations are currently unable to apply for accreditation.
2.7 Relationship between accredited and unaccredited agencies
As stated in part 2.3 above, unaccredited agencies rely on the support of accredited agencies to undertake construction procurement valued above $1.3 million (excluding GST).
Please refer to the assurance process for construction procurement for further information.
3. Minimum standard for accreditation
The program sets out 7 focus areas and principles for accredited agencies.
| Focus area | Principle |
|---|---|
| 1. Strategy | The agency's procurement function has a clear, well-defined strategy that supports delivery of its pipeline and the NSW Government’s strategic priorities and objectives. |
| 2. supplier and market management | The agency works with the market and key suppliers to build effective and mutually beneficial relationships. |
| 3. People and governance | The agency has resources with sufficient procurement capability and skills and seeks to leverage opportunities both internally and externally to further develop. |
| 4. Risk management | The agency is aware of procurement risks and applies appropriate risk management to ensure their mitigation. |
| 5. Processes and systems | The agency has efficient and robust processes and systems in place and actively used to support the procurement function and direct more effort towards value-add activities. |
| 6. Performance and contract management | The agency works effectively with its suppliers to ensure they deliver results for the agency and achieve value for money. |
| 7. Continuous improvement | The procurement function has a sound approach to measuring and demonstrating its contribution to the agency and has actions in place to improve. |
The program poses 24 questions to determine an agency’s performance across the focus areas. For each question, the agency can be assessed at one of 4 levels:
- non-conforming
- developmental
- conforming
- advanced.
These questions are set out in the accreditation assessment tool XLSX, 105.11 KB.
To be accredited, an agency must be assessed at least at the conforming level for all 24 questions. In other words, the minimum standard for accreditation is conforming across all 24 questions.
Agencies are encouraged to strive to the advanced level where possible. Agencies that achieve advanced levels may be asked to share their knowledge and resources, to drive improvement in construction procurement across the public sector.
4. Accreditation assessment
4.1 Overview
To become accredited, an unaccredited agency must undergo an accreditation assessment.
The assessment is conducted by an independent assessor.
The NSW Procurement Board will grant or deny accreditation based on the results of the assessment.
Once accredited, an agency’s accreditation status is valid in perpetuity, subject to the accredited agency continuously meeting its accreditation responsibilities (see part 5).
4.2 Assessment process
The steps to completing the assessment are outlined below. Figure 2 in appendix A represents these steps in a diagram.
The applicant agency is responsible for all costs related to seeking accreditation.
4.2.1 Preparation
Before starting the assessment process, the applicant agency may engage a consultant to identify and address gaps in the agency’s application for accreditation.
While this is permitted, applicant agencies should note that the assessment is based on “business as usual” practices.
In other words, to gain and maintain accreditation, agencies must demonstrate consistent understanding and use of established procurement frameworks, systems and documents.
4.2.2 Conduct planning meeting
The applicant agency should hold a planning meeting with NSW Public Works to declare its interest in being accredited.
At the planning meeting, the agency should provide information about its forward construction procurement plan and its internal capabilities. Please refer to the agency procurement plan template XLSX, 67.34 KB in the toolkit for more information.
Both parties will then consider whether accreditation is appropriate for the agency.
4.2.3 Submit statement of intent form
If accreditation is considered appropriate for the applicant agency, the agency must submit a completed statement of intent form DOCX, 98.07 KB.
It must be signed by the head of procurement, executive director or equivalent, and submitted to the Construction Leadership Group (CLG) for endorsement to begin the assessment.
4.2.4 Receive approval
The CLG will determine whether the applicant agency can begin the assessment and notify the agency of its determination via NSW Public Works.
4.2.5 Engage an independent assessor
The applicant agency must engage an independent entity to conduct the assessment. The entity must be prequalified under the Performance and Management Services Scheme in category 9c. Procurement accreditation.
The agency should use the independent assessor scope of work document DOCX, 105.9 KB in the toolkit to request a quotation from an entity for its assessor services.
The agency must involve NSW Public Works in the selection of an independent assessor, for example, by including NSW Public Works on any evaluation panels and providing relevant evaluation documents or reports to NSW Public Works.
The agency must also demonstrate the independence of the preferred entity to NSW Public Works before engaging the entity as the assessor.
An entity cannot be engaged as an independent assessor if it:
- was involved in helping the agency to prepare for the assessment
- completed a review of an agency’s procurement function in the last 6 months, or
- had staff working in an agency’s procurement function in the last 6 months.
4.2.6 Gather evidence
Before the independent assessor begins the assessment, the applicant agency should gather all relevant evidence.
The accreditation assessment tool XLSX, 105.11 KB in the toolkit suggests sources of evidence that the agency could provide to demonstrate that it meets the minimum standard for accreditation.
4.2.7 Complete the assessment
To conduct the assessment, the independent assessor will work collaboratively with the applicant agency to complete the tool, which poses 24 questions. To be accredited, an agency must be assessed at the conforming or advanced level for all 24 questions.
To determine the agency’s level for each question, the independent assessor will review the evidence provided by the agency and conduct interviews with personnel from the agency’s procurement team.
Please refer to the accreditation assessment interview guidance DOCX, 112.97 KB document in the toolkit for information about these interviews.
4.2.8 Submit documents to NSW Public Works and agency head(s)
Once the assessment is complete, the applicant agency must provide the following documents to NSW Public Works:
- a completed version of the tool, signed off by the independent assessor
- evidence provided by the agency to the independent assessor for the assessment
- completed versions of the interview evaluation forms DOCX, 112.97 KB (part of the accreditation assessment interview guidance DOCX, 112.97 KB document), signed off by the independent assessor
- agency procurement plan XLSX, 67.34 KB
- annual outcomes report XLSX, 87.52 KB
- board paper to request accreditation approval or to notify the board of unsuccessful assessment (approximately 2 pages long).
NSW Public Works will check that all assessment steps have been performed and provide feedback to the agency and the independent assessor. NSW Public Works will also review the board paper.
After this review, the agency must submit the documents to the agency head(s) for approval.
4.2.9 Submit documents to the NSW Procurement Board
The applicant agency must submit the following documents to the board for approval:
- a completed version of the tool, signed off by the independent assessor and the applicant agency head(s)
- agency procurement plan XLSX, 67.34 KB
- annual outcomes report XLSX, 87.52 KB.
NSW Public Works will submit the board paper on behalf of the agency, as per its existing whole-of-government construction procurement governance responsibilities.
4.2.10 Receive accreditation approval
The board may grant or deny accreditation based on the results of the assessment and the recommendations provided by the independent assessors.
The board may also request further information before accreditation can be granted.
4.2.11 Provision for unsuccessful applicant agencies
Where an applicant agency does not meet the minimum standard for accreditation, the agency’s unsuccessful assessment will remain valid for 6 months. This period is calculated from when the preliminary assessment was completed, as dated by the independent assessor in the tool.
During the 6-month validity period, the agency can leverage the existing assessment (and supporting evidence) to address shortcomings in its application.
Once the 6-month validity period expires, the agency must begin the assessment process again.
5. Responsibilities of accredited agencies
5.1 Accreditation responsibilities
Accredited agencies have the following responsibilities:
- comply with all relevant NSW Government legislation, policies and procedures
- maintain the minimum standard for accreditation, as set out in the tool
- perform a risk assessment for each procurement event
- complete the annual self-reporting process, as per part 5.2 below
- identify and manage trigger events, as per part 5.3.
5.2 Annual self-reporting process
Accredited agencies are required to provide the following documents to NSW Public Works for submission to the Board by 31 August each year:
- agency procurement plan XLSX, 67.34 KB for the next 12 months (see part 5.2.1)
- annual outcomes report XLSX, 87.52 KB for the previous financial year (see part 5.2.2)
- self-assessment attestation DOCX, 98.9 KB for the previous financial year (see part 5.2.3)
- any trigger event management plans XLSX, 66.59 KB from the previous financial year.
5.2.1 Agency procurement plan
The agency procurement plan XLSX, 67.34 KB captures construction procurement activities planned by the agency for the next 12 months.
Agencies must include all construction contracts valued at $10 million or above in the plan. Agencies are strongly encouraged to include contracts valued above $1 million and below $10 million.
In addition to submitting the plan to the NSW Procurement Board, agencies must also publish an abridged version on etendering or their agency websites, to ensure visibility of planned procurements. An agency may seek an exemption from publication from the board where the information is regarded as NSW Government sensitive.
Agencies may use the agency procurement plan template XLSX, 67.34 KB in the toolkit as the basis for the plan or an equivalent document that captures the same fields of information.
5.2.2 Annual outcomes report
Outcomes reporting tracks the year-on-year performance and contribution of an accredited agency’s procurement team to the agency’s general business.
Accredited clusters should report on the annual outcomes delivered by all agencies covered by the cluster’s accreditation. Agencies with their own accreditation are excluded from their cluster’s reporting and must report separately on their own annual outcomes.
Figures 3 and 4 in Appendix A visually represent the annual outcomes reporting process.
Agencies must use the annual outcomes report XLSX, 87.52 KB document in the toolkit to provide annual outcomes reporting information.
Outcomes
Agencies must report on 5 outcomes:
- capability uplift: identify and develop construction procurement capability to attract and retain talent
- benefits: provide transparency on the benefits achieved by the procurement team
- efficiency: deliver efficient procurement practices to effectively utilise available resources
- quality: understand customer satisfaction and perception of the construction procurement team
- sustainability: demonstrate consideration of and performance against sustainable procurement objectives and requirements.
Please refer to the annual outcomes report in the toolkit for the list of metrics by which these outcomes are measured.
Annual reporting
The annual outcomes report should be based on the agency’s performance over the past financial year.
For the first 4 outcomes, agencies must measure their performance against each metric listed. With regard to the sustainability outcome, agencies can select the metric by which they measure their performance, for example, small to medium enterprise participation, Aboriginal participation in construction, combating modern slavery or environmental sustainability.
Agencies are encouraged to report on additional performance outcomes measured in their organisations.
Agencies should provide any context to qualify their annual outcomes reporting in the report before it is signed off by the agency head(s).
Outcomes data calculation should be consistent year-on-year. Any changes to data calculation methods should be explained in the report.
Performance targets
In each report, agencies must set performance targets against each metric for the upcoming 3 financial years. Agencies are encouraged to provide any context to their targets in the commentary section of the report.
Agencies may change their annual targets or elective metrics as part of the annual target setting process. If they do so, they must comment on the change in their report for board approval.
Agencies must report on how they performed against the targets set for the relevant financial year. There is a target tolerance of -10%. Agencies performing below this tolerance are expected to provide an explanation of this underperformance in the report. In some circumstances, this underperformance may constitute a trigger event (see part 5.3 for more information).
5.2.3 Self-assessment attestation
The accredited agency’s Secretary must complete and sign the self-assessment attestation form DOCX, 98.9 KB document in the toolkit to confirm that best endeavours have been undertaken to ensure that the agency complies with the minimum standard for accreditation.
5.3 Trigger event management
The trigger event management process aims to ensure that an agency’s accreditation status is suitable for their actual procurement capability and capacity.
5.3.1 Types of trigger events
Circumstances that potentially affect an accredited agency’s ability to meet its accreditation responsibilities are referred to as “trigger events”. The table below outlines 7 types of trigger events and provides examples of these events.
| Type of trigger event | Definition | Examples (not exhaustive) |
|---|---|---|
| Under performance against minimum standard | The agency no longer meets the minimum standard for accreditation. | An accredited agency falls below the conforming level for one or more of the 24 questions in the accreditation assessment tool. |
| Under performance against outcome targets | A trend of underperformance against outcome targets across 2 or more metrics, for 2 consecutive reporting periods. | For 2 consecutive periods, an accredited agency delivered over 10% less than its target for 2 metrics. |
| Machinery of government change | Machinery of government changes that materially impact the procurement team and its structure, capability, processes or systems. | An accredited cluster divests an agency to another cluster. The cluster feels this may significantly impact their ability to meet the minimum standard for accreditation. |
| Organisational change | Significant organisational changes that materially impact the structure, capacity or processes of the procurement team. | An accredited agency is required to undertake a significant business transformation program. This significantly impacts reporting lines and how existing procurement processes are performed. |
| Capability change | Significant changes in capability stemming from uplift or loss, for example recruitment of specialist resources or resource departures. | In one year, 2 senior managers resign from an accredited agency with 10 people in their procurement team. This results in a significant loss of specialist knowledge and experience for the agency. |
| Non-compliance | Procurement activities conducted outside of relevant government legislation and policies and their mandatory requirements. | An ICAC investigation exposes corrupt conduct in the procurement activities of an accredited agency. |
| Failure to submit | Failing to submit annual self-assessment documentation to NSW Public Works. | An accredited agency fails to submit their annual self-assessment attestation by the due date despite NSW Public Works following up twice. NSW Public Works reports this failure to submit to the NSW Procurement Board. |
5.3.2 Trigger event management process
Figure 5 in appendix A visually represents the trigger event management process.
Firstly, the agency must determine the scope and severity of the trigger event. If appropriate, the agency may engage an independent advisor to help make this determination.
Secondly, the agency must complete the trigger event management plan XLSX, 66.59 KB document in the toolkit to identify remedial actions to address the trigger event.
Thirdly, the agency head(s) must approve the plan.
Fourthly, the agency must submit the plan to the Construction Leadership Group (CLG) for review as soon as reasonably possible. Once the CLG reviews and notes the plan, the agency can begin to implement the plan.
If necessary, CLG may escalate the plan to the NSW Procurement Board for review. Depending on the nature of the trigger event and the agency’s plan, the board may decide to conduct a targeted review or withdraw the agency’s accreditation.
While a trigger event is being managed, an agency or part of an agency which is transferred to another agency or cluster can continue to rely on its existing accreditation, policies and procedures.
If an agency’s accreditation status changes as the result of a machinery of government change, the agency must advise NSW Public Works.
6. Contracts established by accredited agencies
6.1 Publication of contracts
All agencies must comply with the freedom of information requirements set out the Government Information (Public Access) Act 2009.
6.2 Use of external resources to undertake procurement
Where an accredited agency engages external resources to undertake procurement on its behalf, the accredited agency remains responsible for the procurement process and its outcomes.
6.3 Procurement on behalf of other agencies
Accredited agencies may undertake construction procurement for other government entities, subject to internal agency limitations.
Where an accredited agency undertakes construction procurement on behalf of another agency, the accredited agency is responsible for complying with applicable procurement legislation, policies and procedures.
7. Role of NSW Public Works
NSW Public Works is responsible for administering the accreditation program. Its responsibilities include, but are not limited to:
Managing the accreditation assessment process by:
- providing oversight during the independent assessor selection process
- conducting planning meetings with applicant agencies to explain the assessment process and determine if accreditation is appropriate for the agency
- monitoring the status of accreditation assessments on a weekly basis
- providing clarifications and support to applicant agencies and independent assessors during the accreditation assessment process
- reviewing draft assessment documents
- submitting the board paper requesting accreditation on behalf of the applicant agency.
Providing ongoing advice and support to accredited agencies by:
- supporting agencies to set suitable performance targets for annual reporting purposes
- supporting agencies to evaluate potential trigger events and identify suitable remedial actions when requested by the board
- consolidating annual reports from agencies for submission to the board.
8. Role of NSW Procurement Board
8.1 Responsibilities of NSW Procurement Board
The NSW Procurement Board acts as the owner of the accreditation program. Its responsibilities include, but are not limited to:
- approving any changes to the program
- granting accreditation to applicant agencies
- monitoring agencies’ compliance with their accreditation obligations and their year-on-year performance
- reviewing an agency’s outcomes target(s)
- in some circumstances, requesting a targeted or full review of an accredited agency, following identification of a trigger event
- in some circumstances, appointing the CLG to manage trigger events on the board’s behalf
- varying or withdrawing accreditation from accredited agencies that no longer meet the minimum standard for accreditation.
8.2 Chair of the NSW Procurement Board
The Chair of the board has the power to grant interim accreditation to an agency, until the next board meeting, when full accreditation can be considered.
9. Definitions
| Term | Definition |
|---|---|
| Agency | A government agency, as defined in section 162 of Public Works and Procurement Act 1912. |
| Agency head(s) | Where the agency is a "Department", as defined in Schedule 1 of the Government Sector Employment Act 2013, the agency head is the Secretary of the department. Where the agency is an "executive agency related to a Department", as defined in Schedule 1 of the Government Sector Employment Act, there are 2 agency heads: the head of the agency, as in Schedule 1, and the Secretary of the Department. Where the agency is a "separate agency", as defined in Schedule 1 of the Government Sector Employment Act, the agency head is the head of the agency, as in Schedule 1. Where the agency is “public authority that is constituted by or under an Act or that exercises public functions (other than a state-owned corporation)", as per section 162 of Public Works and Procurement Act 1912, the agency head is the head of the public authority. |
| The board | The NSW Procurement Board |
| Construction | Construction services means services relating to the construction of buildings or works, including:
|
| Contract | All arrangements including a contract, standing offer, scheme, or any other form of agreement between a government agency/agencies and supplier(s), whether or not the arrangement creates a legal relationship between the parties. These arrangements include:
Whilst these arrangements create different legal relationships between agencies and suppliers, these guidelines refer to these as contracts for the sake of simplicity. |
| Procurement team | Agency staff members who spend the majority of their time involved in procuring construction services for the agency. This constitutes involvement at any of the 3 phases of the procurement process, that is, planning, sourcing or managing. The procurement team may include long-term contractors and devolved procurement team members. |
| The program | The Accreditation Program for Construction Procurement |
| NSW Public Works | NSW Public Works, an entity within the Department of Regional NSW |
Appendix A. Process flows
- Figure 2 - Construction procurement accreditation assessment process DOCX, 255.5 KB
- Figure 3 - Annual self-reporting process (first year) DOCX, 208.93 KB
- Figure 4 - Annual self-reporting process (second year onwards) DOCX, 151.98 KB
- Figure 5 - Trigger event management process DOCX, 251.6 KB
Appendix B. Accreditation toolkit
Applicant agencies and accredited agencies are expected to read this in conjunction with the accreditation toolkit.
| Document | Description | Used by unaccredited agencies | Used by accredited agencies |
|---|---|---|---|
| Accreditation program requirements (this document) | Explains the accreditation program for construction procurement, the minimum standard for accreditation, the accreditation assessment process, the responsibilities of accredited agencies, and the role of NSW Public Works and the NSW Procurement Board in the accreditation program. | Yes | Yes |
| Self-assessment attestation form | Used by accredited agencies to confirm they continue to meet their accreditation responsibilities. Accredited agencies must submit a completed version of this document to the NSW Procurement Board on 31 August each year. | No | Yes |
| Annual outcomes report | Used by accredited agencies to capture year-on-year performance against the defined set of outcome metrics. Accredited agencies must submit a completed version of this document to the NSW Procurement Board on 31 August each year. | No | Yes |