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.

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Overview

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.

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How to manage conflicts of interest

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

Awarding contracts to board members

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.

Commercial conflict of interest

A commercial conflict of interest is a circumstance where a supplier’s performance may be influenced/biased (actually/potentially or perceived) by their commercial interests/relationships.

Circumstances that may represent a commercial conflict of interest include:

  • A project manager conducting a procurement for design services to which the project manager’s organisation submits a bid: it may be perceived that there will be bias toward the project manager’s organisation or that the project manager’s organisation has an unfair advantage in terms of advanced knowledge and detailed understanding of the requirement
  • An organisation providing both project management and design services for a project: the independence/objectivity required by the Project Manager to effectively manage the design consultant’s performance may be compromised by being from the same organisation as the designer (or by being both the project manager and designer)
  • An organisation conducting condition assessments providing project management services for the delivery of subsequent projects: the condition assessment may be influenced by the prospect of the subsequent project management work.

Suppliers and their staff must immediately declare any commercial Conflicts of Interest they may have by submitting a Conflict of Interest and Confidentiality Agreement.

Treatments for avoiding or managing commercial Conflicts of Interest may include:

  • separation of duties (e.g. engaging separate organisations to provide 10YPP services and 5YA project management services)
  • independent oversight (e.g. engaging a third party to independently review a condition assessment when the organisation undertaking the condition assessment is to project manage subsequent remediation)
  • exclusion (e.g. excluding a supplier from bidding when staff from that organisation is involved in conducting the procurement)

Requirements for managing commercial Conflicts of Interest specific to Project Managers engaged by Board of Trustees, are:

  • for projects where the design component has a procurement value of $50,000 or more, the Project Manager/their organisation is excluded from bidding for or undertaking the design component
  • for projects where the design component has a procurement value of less than $50,000 where there is benefit to the school for Project Management and design services to be combined: the Project Manager must submit a Conflict of Interest and Confidentiality Agreement endorsed by the Procurement Sponsor and a quote for the design services to the relevant Ministry Property Advisor for approval prior to undertaking the design services.

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