Conflict of interest management on school property procurements
All conflicts of interests must be managed during a school property procurement to ensure there is no perceived or actual bias in favour of a supplier, staff member or consultant involved in the procurement.
- How to manage conflicts of interest
- Awarding contracts to board members
- Commercial conflict of interest
A conflict of interest is a circumstance where someone’s personal interests, obligations or relationships may influence the performance of their position. A conflict of interest may result in an individual’s independence, objectivity or impartiality being called into question.
Conflicts of interest may be:
- actual — the conflict currently exists
- potential — the conflict is about to happen, or could happen
- perceived — another party may reasonably believe that a conflict exists.
They can be positive or negative, resulting in bias for or against a particular person.
Manage conflicts as follows.
1. All staff involved in a procurement with a procurement value of $50,000 or more must submit a Conflict of Interest and Confidentiality Agreement at the start of their involvement.
2. All staff involved in a procurement, regardless of procurement value, must immediately declare to the procurement officer any conflicts of interest that arise during the procurement (by submitting a Conflict of Interest and Confidentiality Agreement).
3. For each conflict of interest that is identified, a Conflict Management Plan (at the back of the Conflict of Interest and Confidentiality Agreement form) must be approved by the project sponsor (or the board or project sponsor’s manager if the conflict is declared by the project sponsor). A conflict may be managed by:
- reporting: advise all staff involved (including the procurement evaluation team) and request that any perceived undue bias is reported
- restricting: limit the person’s involvement in the procurement
- recruiting: engage an independent probity advisor to ‘live audit’ the procurement
- removing: remove the person completely from the procurement
- relinquishing: the person gives up their private interest
- resigning: the person resigns from the board or their employment.
4. Periodically review Conflict Management Plans to ensure that the treatment of the conflict of interest is still appropriate.
5. Record the management of all conflicts of interest in the Procurement Recommendation Report.
You need written approval from the Ministry before awarding a contract of $25,000 or more (or $25,000 worth of work within a 12 month period) to a board of trustee member or a supplier organisation owned or controlled by a board member.
Submit a Conflict of Interest and Confidentiality Agreement form to the school’s property advisor for endorsement. They will forward it to us for our approval.
A commercial conflict of interest is a circumstance (actual, potential or perceived) where:
- a supplier’s judgement/performance may be influenced by their commercial interests/relationships
- a supplier receives benefit in addition to contractually agreed remuneration as a result of being engaged to deliver services.
Examples of commercial conflict of interest may include:
- a project manager awarding themselves (or their organisation) the contract for design services for a project that they are managing
- a project manager conducting a procurement (for example, for design services) for which they (or their organisation) bids
- a consultant undertaking weathertightness condition assessments also being engaged to deliver subsequent remediation design services.
All commercial conflict of interests must be declared immediately by submitting a Commercial Conflict of Interest Declaration to the Procurement Leader (for school led (5YA) projects: the relevant Ministry Property Advisor of for Ministry led projects: EIS Commercial Procurement).
Approval of the Procurement Leader is required prior to any engagement that will give rise to an actual, potential or perceived commercial conflict of interest.
Treatments for avoiding or managing commercial Conflicts of Interest may include:
- separation of duties (for example, engaging separate organisations to provide 10YPP services and 5YA project management services)
- independent oversight (for example, engaging a third party to independently review a condition assessment when the organisation undertaking the condition assessment is to project manage subsequent remediation)
- exclusion (for example, excluding a supplier from bidding when staff from that organisation is involved in conducting the procurement)
Restrictions specific to Project Managers (and their organisations) engaged by Board of Trustees wishing to provide design services for projects are:
- if the design services have a procurement value of $50,000 or more, the Project Manager/their organisation is excluded from bidding for/delivering the design services
- if the design services have a procurement value of less than $50,000, prior approval of the relevant Ministry property Advisor is required (via Commercial Conflict of interest Declaration)
- if the cumulative value of design services engagements at a school is to exceed $50,000 within any 12 month period (multiple projects), the Project Manager/their organisation is excluded from bidding for or delivering design services where that engagement will breech the cumulative $50k threshold (for example, March: $20,000 + July: $25,000 + October: $10k = $55k: The Project Manager/their organisation is excluded from bidding for/delivering the October engagement).
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