EXPLANATORY STATEMENT
STATUTORY RULES NO. 432 OF 1984
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
The attached Statutory Rules amend the Finance (Overseas) Regulations made under sections 63 and 71 of the Audit Act 1901.
These amendments raise the prescribed threshold amounts for the calling of quotations and tenders; the changes correspond with those made at the same time to the Finance Regulations.
Details of the amendments are as follows:
REGULATION 24 - QUOTATIONS
Regulation 24 required that, for supplies obtained by or through an overseas office, at least three representative quotations should, if practicable, be obtained where the supplies were estimated to cost more than $200. The quotations could be oral where the estimated cost did not exceed $500 but above that amount the quotations had to be in writing. The amendments increase the prescribed amounts to $500 and $1000 respectively, in line with similar amendments made to the Finance Regulations.
REGULATION 25 - TENDERS TO BE INVITED FOR CERTAIN SUPPLIES
Regulation 25 provided that contracts should not be entered into, or orders placed, for supplies estimated to cost more than $10,000, unless competitive tenders had first been invited for those supplies. The threshold amount of $10,000 has been increased to $20,000 in line with a similar amendment made to the Finance Regulations.
Overview
The Statutory Rules No. 432 of 1984, issued by the authority of the Minister for Finance, amend the Finance (Overseas) Regulations under sections 63 and 71 of the Audit Act 1901. This legislative update aims to address inefficiencies and inconsistencies in the procurement process for overseas offices by raising the threshold amounts for the calling of quotations and tenders. The policy objective of these amendments is to streamline the procurement process while maintaining a level of competition and transparency. This is achieved by aligning the prescribed amounts with similar changes made to the Finance Regulations, thereby ensuring consistency across related financial regulations. These adjustments are intended to better reflect the economic landscape and reduce administrative burdens on the relevant offices.
Scope and Application
The Statutory Rules No. 432 of 1984, issued under the authority of the Minister for Finance, amend the Finance (Overseas) Regulations 1984 made under sections 63 and 71 of the Audit Act 1901. These amendments specifically pertain to the prescribed threshold amounts for the calling of quotations and tenders for supplies obtained by or through an overseas office. The primary focus of these amendments is to increase the threshold amounts, aligning them with corresponding changes made to the Finance Regulations. Regulation 24 now requires that, for supplies estimated to cost more than $500, at least three representative quotations be obtained, with oral quotations permissible only if the estimated cost does not exceed $1000. Prior to these amendments, the thresholds were $200 and $500 respectively. Regulation 25 has also been adjusted to mandate that competitive tenders must be invited for supplies estimated to cost more than $20,000, up from the previous $10,000 threshold. These changes apply to any entity or individual involved in procurement activities through an overseas office and are intended to streamline and standardise procurement processes across related regulations.
Key Provisions
The main operative sections of these statutory rules are Regulation 24 and Regulation 25. Regulation 24 (1) now requires that, for supplies obtained by or through an overseas office, at least three representative quotations must be obtained if practicable, when the supplies are estimated to cost more than $500. Previously, this requirement applied when the estimated cost exceeded $200. Furthermore, oral quotations can only be accepted if the estimated cost does not exceed $1000, a limit that was previously set at $500. Regulation 25 (1) states that contracts should not be entered into, or orders placed, for supplies estimated to cost more than $20,000 unless competitive tenders have first been invited for those supplies. This threshold has been increased from $10,000.
The obligations imposed by these regulations on parties or entities are primarily focused on ensuring competitive practices and transparency in procurement processes. When obtaining supplies through an overseas office, entities must ensure that at least three representative quotations are obtained if the estimated cost exceeds $500. If the estimated cost exceeds $1000, the quotations must be in writing. For supplies estimated to cost more than $20,000, entities must invite competitive tenders before entering into a contract or placing an order.
The rules do not explicitly mention any offences, penalties, or consequences for breaches of the regulations. However, failure to comply with these requirements could potentially result in non-compliance with procurement laws and regulations, which could lead to financial losses, reputational damage, or legal action. For example, entering into a contract without inviting competitive tenders when the cost exceeds $20,000 could be considered a breach of procurement principles, potentially leading to the contract being deemed void or unenforceable. Similarly, not obtaining at least three quotations when the estimated cost exceeds $500 (or $1000 if quotations must be in writing) could also result in financial losses if the procurement process is challenged.