The different ways that government makes a purchase

Government agencies are required to follow different purchasing methods, depending on the value of the contract.

Contracts, otherwise known as Common Use Arrangements (CUAs), exist for goods commonly bought by government, for example fuel, computers, electricity, travel, advertising, groceries and stationery.

If a good or service is not available on a CUA, government agencies are required to follow four purchasing methods:

  • direct purchase
  • verbal quotation
  • written quotation
  • open tender

The method an agency chooses will be based on the value of the purchase as well as the risk involved. See the Open and Effective Competition Policy for more detail about purchasing methods.

Direct purchase

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A direct purchase is when a government officer identifies a supplier and purchases directly from them.

A direct purchase is when a government officer identifies a supplier and purchases directly from them.

This process may be undertaken for purchases up to $50,000 (including GST) and depends on:

  • the market
  • complexity and risk
  • process efficiency​

Verbal quote

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Verbal quotes may be requested from suppliers for purchases up to $50,000 (including GST).

They are appropriate where there is a competitive market or the risk associated with the purchase is higher.

A government officer provides a brief description of the products or services required along with the selection criteria (other than suitability and price) to each supplier. The number of suppliers requested to quote may vary.

The supplier is usually asked to respond by phone, email or face to face with their quote.

Written quote

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This process is undertaken for purchases between $50,000 and $250,000 (including GST).

The Request For Quote (RFQ) will be issued by government and includes the relevant specifications and selection requirements, as well as any policy requirements. The number of suppliers requested to quote may vary. Most agencies release RFQs using Tenders WA.

The RFQ will provide instructions to suppliers as to what information you need to include in your offer. We must receive your offer in writing.

Open tender

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​The open tender process must be used for purchases $250,000 and above (including GST).

Government advertises requests for open tenders on the Tenders WA website so that all suppliers have an equal opportunity to bid. Sometimes we also advertise open tenders in metropolitan, national and regional newspapers.

The request document will include appropriate specifications, selection requirements, evaluation methodologies, references to appropriate supply policies and special conditions (if any) relevant to the procurement.

You must follow the instructions in the request document when submitting your bid.

The Department of Finance helps agencies to purchase goods and services when the total estimated value of their contract is $250,000 and above, or there is greater risk involved. If you are successful in tendering for a good and services contract with a government agency, the contract will be between you and that government agency.

Page reviewed 28 October 2019