Appendix 1

Inquiry into Callaghan Innovation’s procurement process.

Extracts from the Founder and Start-up Programme Request for Proposal about the due diligence process:

3.8 Due Diligence

Due diligence is the undertaking of activities, additional to assessments against the evaluation criteria, aimed at independently verifying that a Respondent:

  • is who they claim to be;
  • has the financial ability to deliver; and
  • has the necessary capacity and capability to deliver over the life of the contract.

We reserve the right to undertake due diligence relating to any Respondent(s) at any time during the evaluation process (or any negotiation phase). The outcome of this process may be taken into account when determining the final outcome. Examples of due diligence activities we may undertake and sources we may use include:

  • accreditation or audit reports
  • testimonials or references from current or recent customers
  • site visits
  • client interviews
  • staff CVs
  • published articles
  • case studies
  • current service and contract performance reports
  • Companies Office and/or Charities Register checks
  • analysis of audited accounts
  • credit check
  • insurance certificates
  • compliance certificates/accreditations
  • police checks or security clearances
  • personnel security capability checks

Sometimes, Respondents score highly against the evaluation criteria, but due diligence reveals deficiencies in their Proposal, organisation, or experience. In these circumstances, Respondents may not be selected.

To help ensure we obtain a balanced and comprehensive overview of Respondents, we reserve the right to directly engage any past or current contacts of Respondents that we come across in our own dealings (for example, previous clients and other Government Agencies). This may be in addition to any references we request from Respondents as part of the RFP. You agree not to prevent those contacts from engaging with us on any matter relating to this RFP. We may use third parties to help us with our due diligence enquiries.

We may perform variable levels of due diligence on Respondents based on our interpretation of each Respondent's alignment with our requirements. For example, we may undertake additional financial assessments or engage more references for a particular Respondent if we think extra activities are required to get a sufficient understanding of their fit.

We would like to highlight the reasons, as stated in the Government Procurement Rules (2019), that would lead to the exclusion of a Respondent. If any element of our evaluation (including due diligence) reveals any of the following, then we are unlikely to select that Respondent:

  • bankruptcy, receivership or liquidation
  • making a false declaration (for example, in their tender documents)
  • a serious performance issue in a previous contract
  • a conviction for a serious crime or offence
  • professional misconduct
  • an act or omission that adversely reflects on the commercial integrity of the supplier or offends against the Supplier Code of Conduct
  • failing to pay taxes, duties or other levies
  • a threat to national security or the confidentiality of sensitive government information
  • the supplier is a person or organisation designated as terrorists by New Zealand Police
  • human rights, employment and/or health and safety violations by the supplier or in the supplier's supply chain
  • any matter that materially diminishes an agency's trust and confidence in the supplier.

3.9 Past Experiences with Respondents

Past experiences with Respondents may influence how a Respondent is evaluated against the evaluation criteria or assessed as part of our due diligence. Experiences we (including the evaluation panel) have had with Respondents that constitute first-hand (direct) knowledge may inform our final selection. For example, documented knowledge of poor performance or unethical behaviour.

Any second hand (indirect) knowledge gained about experiences with a Respondent may be taken into account but must firstly be evidenced in order to be considered valid. Personal biases and unsubstantiated rumours do not constitute valid experiences.

Despite track record being only a portion of a Respondent's final score, if we find past experiences with a Respondent constitutes a significant reservation (i.e. see reasons for exclusions above) then we reserve the right not to select that Respondent or continue evaluating that Respondent's response.