1. Standard conditions of contract where everyone gets a bargain Government Procurement Reform June Ralston | Team Leader Agency Briefing Sessions | 30 March & 1 April 2010

2. Presentation outline Welcome Procurement reform overview Standard conditions of contract initiative Project focus, scope & process Challenging clauses Q&As Consultation process

3. Government Procurement Reform For government – better value through: o Standardised approach o Increased productivity & efficiencies o Cost savings For suppliers – better access to opportunities: o Reduced costs of doing business with government o Familiarity through standard documents o Less red tape

4. Reform Programme Workstreams 1. Achieving cost savings 2. Building procurement capacity & capability 3. Enhancing business participation 4. Improving governance, oversight & accountability

5. Survey of current practice Variety of contracts Variety of legal conditions Complexity of contract not commensurate with risk Inconsistent use of terminology Some clauses irrelevant to subject matters Repetition & quality Suppliers incurring repeat legal costs

6. Workstreams 3 & 4 - Projects 1. Standard conditions of contract 2. Standard tools & templates 3. Practice Guidance Notes 4. Procurement Planning: APPs & SPOs 5. Supplier Guide to doing business with government 6. Review procurement policy & framework

7. Standard conditions of contract Cabinet directive: to create a standard, simple, plain English set of conditions of contract for common goods and services to be used by all Public Service Departments and State Services.

8. Benefits Simplify doing business Provide consistency Standardise the treatment of legal risk Resolve challenging clauses Fairer balance of risk Allows focus on specification & deliverables

9. Application Required use by: o Public Service departments o State Services agencies State Sector agencies encouraged

10. Deliverables Standard conditions of contract Contract templates: o services o goods o goods & services Variation template User Guidance Notes

11. Focus Plain English Clear standard format Common goods & services Reverse some legal default positions

12. Approach Advisory groups: o Strategy Group o Procurement Development Technical Advisory Group o T&Cs Working Group o Business Reference Group Stakeholder consultation

13. Draft conditions of contract Phillips Fox – external legal advisors 3 iterations: ostraw man consultation ostone man pilot oiron man first edition

14. milestonedate straw man availablebeginning April 2010 Consultation period ends7 May stone man finalised22 June Briefing sessionslast week in June PilotJuly to December Review pilotFebruary 2011 iron man finalisedApril 2011 First edition launchedMay 2011 Timeline

15. Contract Structure Agreement Schedule 1 parties execution specific provisions specification of services terms & conditions definitions + + Schedule 2 Schedule 3 + variation template

16. Challenging clauses ClauseTreatment insurancenot required as standard indemnitydelete provision for loss caused by breach retain for 3 rd party IP infringement limitation of liabilitymutual supplier capped at 3 x total fees Intellectual propertybuyer owns all new IP & licences supplier to use and commercialise terminationsupplier can terminate on giving notice

17. Standard conditions of contract where everyone gets a bargain QUESTIONS?

18. Next steps straw man: beginning April Consultation ends: 7 May 2010 More information: www.med.govt.nzwww.med.govt.nz Your feedback to: procurement@med.govt.nzprocurement@med.govt.nz Next briefing: last week in June

19. Standard conditions of contract where everyone gets a bargain Government Procurement Reform Agency Briefing Sessions 30 March 1 April 2010