The NSW Government is a major buyer of consultancy services, with 90% of this spend currently shared with just 20 suppliers. It is important that agencies obtain the best value from engagements with consultants. Buying consultancy services is quite different from buying goods; for inexperienced buyers there are many unknowns.
Click on the links below to go to the appropriate section:
- Consultancy services – a general overview
- Standard commercial framework - the standard commercial framework supports best practice buying of consultancy services, and is mandated by Procurement Board Direction 2018-01 Engagement of professional services suppliers
- Tools and templates – an engagement toolkit for buying consultancy services
The NSW Government is a major buyer of consultancy services and it is important that agencies obtain the best value from these engagements.
Agencies should consider engaging a consultancy supplier if they need:
- Specialised skills or experience not available through their staff or a contingent labour hire
- Problem solving
- Independent advice to enhance public credibility
- Diagnostic management, facilitation and change management advice
Consultants should be engaged to deliver outcomes that your organisation is unable to deliver due to capability, credibility or the need for independent advice.
Define the scope of your engagement
Buying consultancy services is different from buying goods and it is very important to define the need and scope:
- What is the problem you need solved?
- When do you need a solution by?
- How long will the project take?
- Why do you need a specialist or an independent view?
- How much will it cost?
- What kind of engagement will you need – fixed cost, time and material, etc.
Hint: You can check the Major Suppliers' Portal to see if you can learn from previous engagements procured by NSW Government agencies. If there has been similar work done before, speak to the agency project manager to see what they can recommend.
If you need further support, discuss your requirements with NSW Procurement’s Professional Services Category Management team who can provide advice on how you may be able to leverage off existing engagements. Contact them through the NSW Procurement Service Centre on 1800 679 289
Is a consultancy supplier the best fit? What other options are there?
If your agency does not have the in-house resources to solve the problem and deliver advice on the solution, carefully consider your project requirements and the type of labour required:
A problem is identified, you select a consulting firm which will get its best team on board to deliver. The supplier is responsible for any risks. Payment is based on delivery of the solution and/or meeting milestones. You would expect higher daily rates as the consulting firm takes on the project risks.
An individual with specialised skills who is seconded from a consulting firm to assist a team within NSW government to deliver a project. The individual will complete timesheets for hours/days worked and the consulting firm will invoice the NSW government agency for these services. You should expect lower daily rates than for a consulting assignment as the NSW government agency directs the secondee, provides work facilities and manages the project risks.
Consider if a major consultancy supplier is required with well known branding or could a smaller, specialist consulting business deliver the project? For a list of pre-qualified suppliers of consulting services see the Performance and Management Services Scheme.
Contingent labour hire
A named individual who is engaged and directed by NSW Government on a temporary contract. This is for a set timeframe and intellectual property remains with NSW Government. The contractor will complete timesheets for hours/days worked to receive payment from a labour hire company. See the Contingent Workforce Scheme for details.
Which type of consultancy supplier should I use?
The NSW Government supports the engagement of small and medium enterprises (SME’s) which are typically more specialised and can provide value for money. However, in choosing the right services and provider you should consider your project risks, branding requirements and the suppliers organisational capabilities.
How do I buy services from a consultancy supplier?
Please note – your agency may have additional requirements and processes and administrative or financial delegations. Please review your agency procurement guidelines and/or speak to your Procurement department.
- The Board direction PBD 2018-01 Engagement of professional services suppliers outlines the approval and exception reporting requirements when engaging suppliers of Business Advisory Services (consultancy/advisory).
- For a list of pre-qualified consultancy providers please see the Performance and Management Services Scheme (SCM0005) - referred to as the 'PMS', it is managed by NSW Procurement. This scheme is recommended for use by all government agencies.The scheme offers a pool of suppliers who can deliver general, strategic and functional government/business-related advice and services. These suppliers have completed a due diligence process and a capability assessment. They have agreed to standard terms and conditions.
What type of capabilities/services can I buy from a consultancy supplier?
The PMS scheme capabilities includes strategic, general and functional business advisory, high end strategy and infrastructure and specialised services.
Pre-qualified PMS scheme suppliers have had their skills and experience assessed against the scheme requirements and are mapped to appropriate capabilities and specialisations. Please review the full list of engagement and sub-engagement types (DOCX, 28.27KB) for the PMS Scheme.
From January 2018, most capabilities/engagement types in the PMS Scheme were covered by a standard commercial framework. The framework supports negotiations with consultancy suppliers and ensures value for money. Full details on the standard commercial framework for the PMS Scheme are detailed below.
The PMS scheme is undergoing a refresh in the first half of 2018, and the supplier listings may change – please check the current supplier listing on the PMS Scheme (XLSX,1.99 MB) or contact the NSW Procurement Service Centre on 1800 679 289
For general information on how to best engage and manage consultants, please refer to Consulting 101 (PDF,1.39MB)
Within the PMS Scheme, a standard commercial framework was implemented for engagement types 1 - 13. The NSW Government introduced a centralised approach to ensure a better commercial outcome, with a category management team to support implementation across all the clusters.
The overview (PDF, 306KB) of the standard commercial framework is publicly available.
The framework was rolled out in three phases. Initially it was offered to the suppliers with the highest spend - which accounts for 90% of professional services and consultancy spend within the Performance Management Services Scheme (PMS Scheme). Now in the final stage, the framework has now been offered to the remaining PMS Scheme suppliers. These suppliers have been asked to update their profiles in eTendering by the end of June 2018.
To check a PMS Scheme suppliers current status, please review the supplier listing under the 'standard commercial framework' tab.
The framework consists of:
- Standardised engagement types and resource types to allow like-for-like comparisons of proposals
- Daily capped rates – a maximum daily rate a supplier can charge for various categories or capabilities
- Discounts for engagements based on the team size engaged and the duration of each project
- Capped expenses – with a maximum cap on expenses such as travel or office sundries
While the PMS Scheme is recommended for use by agencies, use of the standard commercial framework is mandated by PBD-2018-01 Engagement of professional services suppliers - released on 15 May 2018. Both agency buyers and suppliers have obligations when seeking or providing business advisory services to the NSW Government.
What isn’t included under the standard commercial framework?
- Infrastructure and construction
- Contingent labour
- Training – learning and development
Exceptions and requirements
Use of non-compliant suppliers, high end strategy engagements and pricing above the capped rates in the standard commercial framework are considered 'not compliant' to the framework and any such engagement must:
- have your agency head /Secretary or Cluster Chief Financial Officer sign off before going to market
- seek a minimum of 3 competitive quotes for the required works
- report details in the Major Suppliers' Portal
On occasion, you may require a consultancy service capability from the standard commercial framework, by a provider that is not prequalified but whose expertise is warranted for an engagement. The exception process would be required to be followed for such works if the suppliers’ rates are above the capped rates in the standard commercial framework.
Procurement Board Direction 2018-01 outlines the approval and exception reporting processes for engagements that are no compliant to the standard commercial framework.
Please note, your agency may have additional requirements when engaging with consulting suppliers with either administration or financial delegations. Review your agency procurement guidelines and/or speak to your Procurement department.
On occasion, there may be consultancy services not covered by schemes, but whose experience is required. In such cases, an agency may engage this services provider. They must comply with:
- the agency's procurement guidelines
- the Procurement Policy Framework
- procurement policies covering approved procurement arrangements
- specific guidelines on the use of probity advisories and auditors (Board Direction 2013-05)
Agencies must use their approved standard form of agreement for engaging a service provider. If one is not available, agencies can use the non prequal short form consultancy agreement template. (DOCX, 62KB)
Overview of the Standard Commercial Framework (PDF,306KB) provides an overview on the ceiling rates, discount structure, disbursement policy, etc.
Engagement toolkit for buying consultancy services (PPTX,2.26MB) this is a one page overview of the procurement process and links to relevant tools.
Project brief template (DOCX,143KB)
Part A – specification (DOCX,972KB)
Part B – response (XLSX,304KB)
Supplier Commercial Evaluation (XLSX,73KB)
Negotiation Pack (PPTX,599KB)
Statement of works template (DOCX, 128KB)
PMS standard form of agreement (DOCX,36KB)
Consulting 101 (PDF,1.39) a holistic reference to engaging consulting services in general
Exceptions / reporting in Major Suppliers Portal
Quick 'How To' Guide to use the Major Suppliers' Portal (PDF, 1.41MB)