2021-04-06 Services and Organisation Committee Meeting Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA     6 APRIL 2021




                                                   ATTACHMENT 1




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SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                               6 APRIL 2021

                                                                                            ATTACHMENT 1

              MEN.                                                                Council Policy
         L_@ |      COUNCII                                      TENDERER FINANCIAL

         Corporate Plan Reference:                  Excellence as a Council
         Endorsed by Council:                       <Insert Date of Ordinary Meeting >

         Policy Author:                             Director Corporste Services
                                                                                                         O

       POLICY BACKGROUND

       Council is committed to ensuring thst suppliers engaged to deliver projects via a tender process
       have the financis!l capacity to remain solvent and meet contractual obligations, including where
       applicable payments to sub-contractors, throughout the duration of the contract period.
       Examples of building industry insolvencies have highlighted the need for the establishment of, and
       compliance with, & process within Council to ensure appropriate financial capacity assessments and
       other relevant checks occur ss part of tender evaluations. This will ensure that risk mitigation occurs
       to avoid any financial and reputstions! impairment that eventustes as a result of the financial failure
       of a Council contracted supplier.
       This policy and its associated guideline will outline the process by which financial capacity
       assessments are triggered, including the methodology to be employed as part of the tender
       evaluation stage (including quantitative and qualitstive information requirements), as well as due
       diligence checks throughout the delivery stage of a project.
       COUNCIL POLICY

       Guiding Principles
       1. Financial capacity assessments are one of a range of measures designed to reduce contractor
          insolvency nsk [email protected]. The requirements for 4 financial capacity sssessment should be considered when planning &
          tender. The process for the assessment of financial capacity should be proportionate to the risk
          of the project.
       3. While the information provided for financial capacity sssessments is based on historical financial
          performance, which can only give current or short term future likelihoods based on current known
          issues and situations, Council must be satisfied that based on that information the tenderer is
          likely to remain financially viable for the life of the proposed contract.
       4. A tenderer's financial capacity can rapidly deteriorate or improve with changes to the economic
          and operating environment. As such it should be recognised that 8 point in time assessment of
          viability can only screen out high risk tenderers, and is not a substitute for sound project planning
          and contract management
       5. Atender process will include 8 mechanism to assess a tenderer's financial capacity to complete
          & project and allow the exclusion of tenderers that are considered an unacceptable risk of

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