Joint procurement resources for councils

This tool is a guide to assist you in your risk management process. The Risk Assessment tool can be used to identify, measure and mitigate risks when undertaking procurement of waste management services or waste infrastructure. Use the information in the tool to create your own risk register and undertake your own risk assessment tailored to the needs of your procurement undertaking.

The tool contains a template for documenting the risk assessment and includes a ‘How to’ guide explaining how to use the tool and when to undertake a risk assessment.  Some councils are required to use their own risk assessment templates. If this is the case, this tool contains a guide (in Tab 4) with examples of different types of risks you could consider. While each procurement project is different, some risks will be similar across councils and procurement types. 

Download the Waste procurement risk assessment tool and template (XLSX 271KB).

The EPA MOU template is designed for use in a joint procurement project. The template is best used at the ‘plan’ stage of the joint procurement process and is developed as a non-binding MOU.

An MOU established in the ‘plan’ stage can help to set the project up for success, through identifying roles and responsibilities and allowing councils to agree on procurement objectives. The template is designed to be flexible with example clauses that can be adopted to your council’s needs.

Before using the template MOU, councils should consider that:

• an MOU may not be the appropriate instrument in every case and councils should consider whether a binding agreement is more appropriate from the outset, and
• independent legal advice should be sought by councils (both as to the appropriateness of using an MOU, and if so, its drafting), particularly where councils intend that the terms of any MOU should be binding and enforceable.

Please read the Disclaimer.

Download the Joint procurement Memorandum of Understanding template (DOCX 74KB)

The process of preparing an MOU

Key steps in preparing an MOU:

1. Elect one council, or form a separate coordinating body or group, or utilise existing coordinating bodies, to take the lead on preparing the MOU. Alternatively, appoint an independent third-party consultant and/or legal professional to help prepare the MOU.
2. Download the EPA MOU template provided following the guidance on how to use the template within the document.
3. Parties negotiate and/or amend the terms as needed.
4. Seek legal advice on the MOU if necessary.
5. Each council signs the final MOU. The date from which the MOU takes effect can be specified within the document.

Your organisation may have its own delegations, rules or procedures addressing which roles are authorised to sign an MOU. You should seek legal advice to help determine who should sign the MOU. 

In the case of local governments in New South Wales, an authorised delegate of the local council can sign the MOU on behalf of the council, however:

• the delegate must have the authority to sign on behalf of the council,
• the council must ensure that the delegate has the required authority, and
• an eligible witness, who has known the delegate for more than 12 months or has seen their identifying documentation, must be present when the delegate signs.

What is an MOU?

An MOU is a written document between two or more separate parties that outlines their intentions to collaborate on a specific project or goal, share information, and to set out a framework or vision for working together. MOUs are not generally legally binding but show that all parties involved agree about their roles and responsibilities. 

MOUs can have different levels of formality, but are often used when organisations don’t want to, or are not yet ready to, enter a binding arrangement.  In general, an MOU will not deal with project specifics and tends to be more of a 'high level' document.

An MOU is sometimes used as a precursor to a more specific and comprehensive contract or ‘agreement’ later in a process, or when certain circumstances arise after further negotiations. 

Is an MOU a legally binding document?

An MOU is generally not legally binding. However, whether an MOU is ultimately legally binding or not will depend on the terms of the MOU, and the intentions of the parties who agree to it. 

Due to their generally non-binding nature and the potentially significant commercial implications arising from any dispute among signatories, an MOU may not necessarily be the best instrument for a joint procurement process pursued by councils. Independent legal advice should be sought by councils considering an MOU for their joint procurement process, and particularly where councils intend that the terms of any MOU should be binding and enforceable. 

What is a joint procurement agreement?

A joint procurement agreement is where two or more entities agree to pool their purchasing power and utilise a single solicitation document and contract with a vendor to acquire goods or services.

Choosing between an MOU and an ‘Agreement’? 

The type of document used by councils in managing and navigating a joint procurement project will vary and depend on councils’ specific needs at the time and the stage of the process in which it is used. 

Councils have previously used MOUs in joint procurement processes at various stages, however, the earlier “planning” stages may lend themselves more to non-binding MOUs and the latter stages to binding agreements.

What issues will an MOU cover?

The issues covered in an MOU depend on the nature of the collaboration between the organisations.

Typically, an MOU document will set out:

• details of the organisations entering into the MOU.
• objectives of the arrangement and goals or expected benefits.
• agreed actions, services and areas of support.
• strategies and mechanisms for dealing with common issues.
• duration of the MOU (an agreed start and review or end date) and the circumstances in which it may be ended early or extended.
• the agreed roles and responsibilities of each organisation.

An MOU may also include:

• background to the MOU – this can serve as a short introduction setting out why and how the parties have come together to create the MOU.
• a communication plan between parties, such as a regular meeting schedule, any reporting requirements or information sharing.
• details on management of the MOU, such as nominating a person (or people) in each organisation as a point of contact for the MOU or establishing an advisory group with representatives from each party to implement the MOU.
• an agreed mechanism to resolve disputes.
• an agreed mechanism to vary the terms of the MOU.
• how each party will deal with confidential information.
• how each party will deal with publicity and announcements relating to the MOU.

To prepare an MOU, consider which issues are most important for your organisation and to achieve the purpose of the MOU (such as to reach a later agreement or to continue working together).

The template memorandum of understanding provides example clauses.