The unit applies to those in specialist procurement who plan for procurement risks across all stages of the procurement cycle.

ELEMENT

PERFORMANCE CRITERIA

1. Assess risk.

1.1. Legislation, policies, business processes and resources impacting on the contract are identified.

1.2. Procurement outcomes and internal inputs necessary for effective performance are identified.

1.3. Critical success factors necessary for the achievement of procurement outcomes are identified and confirmed.

1.4. Non-trivial procurement risks relating to the procurement activity are identified.

1.5. Potential probity risks are identified.

1.6. Causes of risk are analysed and their potential impact is determined.

1.7. Likelihood and consequences of risks are determined and risk assessments are developed.

2. Prepare risk management plan.

2.1. Preliminary risk management plan is developed that addresses risks identified in planning phase of procurement activity.

2.2. Risks that will be accepted and those requiring treatment are identified.

2.3. Treatments that reduce risks to an acceptable level are designed according to organisational requirements.

2.4. Plan for implementing new treatments, additional risk controls or modifications to existing controls is developed.

2.5. Risk level is re-checked at key points during procurement process, and risk management plan is reviewed and adjusted to cover procurement activity risks not already identified.

3. Implement and review risk management plan.

3.1. Risk controls and treatments are implemented according to the treatment plan.

3.2. Risk management plan is implemented, and regularly reviewed and revised to include potential or emerging risks during the life of the procurement activity.

3.3. Review results are used to improve risk treatments and controls.

Required skills

communication skills to:

write risk management plans using templates or a recognised risk management methodology

interpret complex, formal documents

make verbal and written recommendations about the management of procurement and contracting risks

provide feedback

teamwork skills to:

model effective team management approaches

respond to diversity

refer issues to the correct person

problem-solving skills to analyse risks associated with procurement and contract using a recognised risk management methodology

initiative and enterprise skills to identify procurement risks and opportunities using a recognised risk management methodology

planning and organising skills to manage and update the risk management plan

learning skills to keep up-to-date with:

best practice examples in procurement practice

relevant procurement legislation, policies and procedures

technology skills to:

operate organisational IT systems

use electronic procurement templates

Required knowledge

commonwealth, state or territory, and local government legislation, policies, practices and guidelines:

relating to contract risk management

such as OHS and equity and diversity

organisational procurement policies, practices and approval processes

risk management procedures

probity principles and issues, particularly as they relate to probity risks

codes of conduct, codes of practice and standards of individual behaviour relating to the procurement process

risks associated with financial and accounting issues relevant to procurement and contract management

supplier issues and supply chain management in the context of procurement risk management

aspects of law of contracts, trade practices law and commercial law relevant to risk management relating to complex procurement

OHS requirements relevant to procurement and contract management

equal employment opportunity relevant to procurement and contract management

environmental, sustainability and corporate social responsibility principles relevant to procurement and contract management

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Competency must be demonstrated in the ability to manage procurement risk consistently in accordance with legislative and organisational requirements.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Assessment must confirm the ability to:

use recognised risk management methodologies to identify and assess risks for all stages of a procurement activity

prepare a risk management plan for a procurement activity, using templates where available

implement risk management plans

review and revise risk management plans to reflect the changing procurement context and environment during the procurement activity

liaise and consult with stakeholders to ensure that risks are appropriately identified and managed

make recommendations to higher management about options for the management of procurement risks.

Consistency in performance

Competency should be demonstrated by providing evidence of undertaking a range of relevant work tasks in an actual or simulated procurement environment on at least two separate occasions.

Context of and specific resources for assessment

The unit of competency is to be assessed in the workplace or a simulated workplace environment.

Access may be required to:

legislation, policy, procedures and protocols relating to procuring goods and services and managing procurement risk

codes of conduct and codes of practice

workplace scenarios and case studies relating to a range of procurement activities associated with managing procurement risk

case studies that incorporate dilemmas and probity requirements relating to managing procurement risk.

Method of assessment

The following assessment methods are suggested:

questions to assess understanding of relevant legislation and procedures

review of strategies and approaches adopted for managing procurement risk

review of risk assessments, risk management plans, contract management plans, contracts, probity plans, budgets, transition plans and other documentation prepared by the candidate in a range of contexts

review of stakeholder engagement approaches adopted by the candidate.

In all cases, practical assessment should be supported by questions to assess underpinning knowledge and those aspects of competency which are difficult to assess directly. Questioning techniques should suit the language and literacy levels of the candidate.

Guidance information for assessment

Evidence must be gathered over time in a range of contexts to ensure the person can achieve the unit outcome and apply the competency in different situations or environments.

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

PSPETHC501B Promote the values and ethos of public service

PSPGOV507A Undertake negotiations

PSPLEGN501B Promote compliance with legislation in the public sector

PSPPROC503B Manage contract performance

PSPPROC504B Finalise contracts

PSPPROC506A Plan to manage a contract

PSPPROC507A Plan for procurement outcomes

PSPPROC508A Make procurement decisions.

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Legislation and policies may include:

commonwealth or state and territory legislation, including equal employment opportunity and anti-discrimination law

council rules and by-laws

national and international codes of practice and risk management standards

organisational policies and practices

government policy

codes of conduct and codes of practice

national competition policy.

Procurement risks may include:

contextual and environmental factors

too many or too few potential suppliers

unsophisticated marketplace

timeframes for procurement too short

inappropriate method of procurement used

inadequate budget and other resources

inappropriate form of contract selected

supplier inability to meet obligations

end user or buyer inability to meet obligations

unclear contract terms and conditions

contractual disputes

factors outside the control of either party, such as global health pandemic, failure of third-party businesses or natural disasters

implications if dependence on one supplier, versus risks in lack of continuity and consistency of services provided

changes to government policy.

Probity risks may include:

corruption

fraud

conflict of interest (actual, perceived or potential)

unfair treatment of providers or potential providers

misuse of resources

misuse of information

manipulation of the marketplace.

Risk assessments differentiate between risks that have:

high impact/consequence/likelihood

low impact/consequence/likelihood.

Risk management is often considered in relation to an organisation's:

people

assets and physical environment

reputation and image

legal issues

business continuity

finances

stated outcomes.

Risk treatments may include those that:

avoid risk

transfer risk

reduce likelihood

reduce consequence

partially reduce assessed risk level so that risk can be accepted.

Risk controls may include:

legislation

government policies and guidance

organisational policies, processes and procedures

standardised documentation and templates

hierarchy of controls, such as fraud control plans and security plans

staff skills and knowledge.

Unit sector

Procurement and Contract Management

This unit contains employability skills.