This unit applies to those in specialist procurement and contracting.

ELEMENT

PERFORMANCE CRITERIA

1. Plan and prepare for strategic procurement negotiations.

1.1. Input and advice are obtained from key stakeholders and the procurement and negotiating context is identified.

1.2. Information is gathered on suppliers and a best alternative to negotiating an agreement is developed.

1.3. Objectives, targets and bottom line position are determined for negotiations.

1.4. Composition of negotiating team and limits on negotiators' authority are determined according to organisational policy and procedures.

1.5. Negotiation process, timeframes and strategies are determined to suit complexity of procurement and supplier characteristics.

1.6. Negotiation plan/directive is developed that identifies negotiation roles of team members, lead negotiator, negotiating styles, tactics and boundaries/limits of authority to suit the procurement activity.

1.7. Negotiation plan is authorised and signed off according to organisational policy and procedures.

2. Undertake strategic procurement negotiations.

2.1. Negotiations are opened, supplier tactics identified, and issues and options explored to identify mutually compatible interests.

2.2. Minor and major issues are dealt with and concessions to terms and conditions are negotiated to improve overall value for money of the procurement.

2.3. Concessions are made such that agreements remain consistent with original intentions and with procurement, organisational objectives and probity requirements.

2.4. If negotiations stall, tactics are used to break deadlocks and continue negotiations according to negotiation plan and organisational policy and procedures.

2.5. Negotiations are conducted and an offer is made in accordance with legislative requirements, organisational policy and procurement guidelines.

3. Finalise strategic procurement negotiations.

3.1. Negotiations are closed and agreements are finalised according to procurement guidelines.

3.2. Where agreement is not possible immediately, communication channels are kept open while additional support, arguments and supporting evidence are obtained.

3.3. Where agreement is not possible and the best alternative is to be pursued instead, negotiations are terminated in a way that preserves the relationship with the supplier for possible future business and deters the possibility of legal liability.

3.4. Where agreements may have wider implications for procurement and the organisation, those implications are considered and necessary consultation is carried out.

3.5. Details and outcomes of negotiations are documented according to organisational policy and procedures.

Required skills

communication skills to:

consult and negotiate with stakeholders

achieve negotiation outcomes desired by the organisation

network, within probity boundaries, with stakeholders

build and manage effective working relationships

write business cases, plans, reports, submissions and other complex documents

read complex documents, such as contracts, legislation and guidelines

provide feedback

teamwork skills to:

manage teams of expert negotiators in functions such as finance, legal, technical and engineering

manage strategic relationships

model effective management and leadership approaches

respond to diversity

refer issues to the correct person

problem-solving skills to:

identify and apply strategies and tactics for breaking deadlocks during a negotiation

apply decision-making processes or methodologies

identify and resolve strategic procurement issues

apply understanding of supplier issues and supply chain management in the context of strategic procurement

initiative and enterprise skills to:

identify and assess negotiation approaches to yield results

apply OHS, environmental, sustainability and corporate social responsibility practices in the context of strategic procurement

planning and organising skills to:

undertake research and business analysis

manage financial and other resources

manage procurement projects

learning skills to keep up-to-date with:

best practice examples in strategic procurement

relevant procurement legislation, policies and procedures

technology skills to:

operate organisational IT systems

use electronic procurement templates

Required knowledge

commonwealth, state or territory, and local government legislation, policies, practices and guidelines:

relating to strategic procurement, including environmental purchasing guidance

such as OHS and equity and diversity

organisational procurement policies, practices and approval processes

aspects of law of contract, trade practices law, and commercial law relating to negotiation of strategic procurement arrangements

probity principles and issues

codes of conduct, codes of practice and standards of individual behaviour relating to negotiation

government procurement environment

legal requirements of government contracting

financial rules and regulations

implications of particular contracting arrangements

whole-of-life considerations

cultural issues relating to strategic procurement and industry development

relationship management at all personnel levels

environmental, sustainability and corporate social responsibility principles relevant to strategic procurement

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Competency must be demonstrated in the ability to negotiate for strategic procurement consistently in accordance with legislative and organisational requirements.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Assessment must confirm the ability to:

prepare negotiation plans (or similar) for strategic procurements

implement negotiation plans

respond flexibly, but within the boundaries of the plan, to issues, deadlocks and other situations that arise during negotiations

finalise strategic procurement negotiations with an agreement that captures the negotiated positions of all parties

act within own delegations and promptly escalate issues to higher authority when required

uphold high standards of public sector ethics and behaviour when negotiating with potential suppliers.

Consistency in performance

Competency should be demonstrated by providing evidence of undertaking a range of relevant work tasks in an actual or simulated procurement environment on at least two separate occasions.

Context of and specific resources for assessment

The unit of competency is to be assessed in the workplace or a simulated workplace environment.

Access may be required to:

legislation, policy, procedures and protocols relating to negotiating strategic procurement

codes of conduct and codes of practice

long-term government policy papers, such as White Papers

strategic procurement plans and direction statements

workplace scenarios and case studies relating to a range of strategic procurement and disposal activities.

Method of assessment

The following assessment methods are suggested:

questions to assess understanding of relevant legislation and procedures

review of strategies and approaches adopted for planning for strategic procurement

review of negotiation process used, negotiation plans, negotiation directives, contracts or other agreements reached, notes from negotiations, risk assessments, formal sign-offs and approvals, and other documentation prepared or reviewed by the candidate in a range of contexts

review of stakeholder engagement approaches adopted by the candidate.

In all cases, practical assessment should be supported by questions to assess underpinning knowledge and those aspects of competency which are difficult to assess directly. Candidates for this qualification must demonstrate a high level of understanding and practical workplace application of underpinning knowledge. Questioning techniques should suit the language and literacy levels of the candidate.

Guidance information for assessment

Evidence must be gathered over time in a range of contexts to ensure the person can achieve the unit outcome and apply the competency in different situations or environments.

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

PSPETHC601B Maintain and enhance confidence in public service

PSPGOV601B Apply government systems

PSPLEGN601B Manage compliance with legislation in the public sector

PSPMNGT607B Develop a business case

PSPMNGT608B Manage risk

PSPPM601B Direct complex project activities

PSPPROC604B Plan for strategic procurement

PSPPROC605B Coordinate strategic procurement

PSPPROC607A Manage strategic contracts.

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Stakeholders may include:

end users, customers or clients, and sponsors

current or potential providers or suppliers

technical or functional experts or advisers

commonwealth, state or territory, and local government

the organisation

other public sector organisations

employees, unions and staff associations

industry bodies

local communities

lobby groups and special user groups.

Procurement may include:

public private partnerships (PPP)

leasing or buying

short-term or long-term arrangements

sole or multiple suppliers

maintenance and support arrangements

incentive contracting

firm or variable pricing regimes

franchising

research and development

pre-qualification of suppliers

standing orders

standard form agreements

common use contracts

facilities management

prime contractor and subcontractor

gain sharing/open book

coordinated procurement

whole of government procurement

cooperative procurement.

Procurement and negotiating context may include:

nature of procurement in terms of:

risk

expenditure

complexity

nature of supply market, such as:

fully competitive

dominated by a few large suppliers

sole supplier

unsophisticated suppliers

rural and remote issues

one-off negotiation versus need to maintain long-term relationship

existing relationship with supplier. including:

previous negotiations

supplier's business approach to government as client

state of current relationship

political or community sensitivities

skill and experience of negotiating team

balance of power in the negotiations.

Negotiating team members may include:

financial

legal

technical

functional

engineering

scientific and research

human resource

commercial or business.

Negotiating styles may include:

competitive

accommodating

avoidance

compromising

collaborative.

Terms and conditions may include:

technical support aspects, such as:

warranties

life-cycle support

maintenance agreements

financial aspects, such as:

deposits

payment terms

discounts

payment schedules

travel costs

cancellation penalties

risk management aspects

management information

government support

timeframes

performance incentives and penalties

general matters, such as subcontracting

contract price.

Unit sector

Procurement and Contract Management

This unit contains employability skills.