Procurement Update - June 2016

By: Regional Procurement Coordinator, Amanda Hancock...

Register of Prequalitified Suppliers

The Register of Prequalified Suppliers contains a list of suppliers and the services offered. The register increases Council efficiency when engaging suppliers for the provision of bitumen and asphalt services, through the use of prequalified resources.  With the establishment of the RoPS, the suppliers are not ranked and should Councils elect to utilise a supplier listed on the RoPS, the best supplier most advantageous to Councils will secure the work

Novation & Assignment

Councils often need to consider requests to novate or assign agreements - so what is the difference?

Novation is where the two parties to the contract mutually agree to terminate a contract and replace the contract with an identical contract between different parties. A party leaves the contract and another party joins, and the incoming party (this is the important bit), assumes both the rights and the obligations of the outgoing party under a novation. This is because the novation is done with the consent and agreement of all parties. 

Assignment however, is an action taken unilaterally by one party to the contract, where it assigns its rights under the contract to a third party. It is important to note that even if a party assigns its rights, it is not released from its obligations under the contract.  An example of assignment is with the use of commercial debt factoring. Councils contracts usually included a clause prohibiting novation without express consent so that they are not forced into contractual arrangements with other parties unless they have been able to satisfy themselves that they suitable*.

*Information sourced on-line from AGS, Australian Government Solicitor and aapcm, Australian Association of Procurement & Contract Management.