QLDC promises to “play by the rules” under new post-ZQN7 policy

by Peter Newport - Dec 16, 2021

Squeezed into a busy QLDC council meeting today was the adoption of Item 6: New Procurement Policy.

Behind the agenda item is a document that promises ratepayers and council suppliers a new transparent system that will provide proper accountability for up to $100 million of annual expenditure.

Chamber of Commerce boss Ruth Stokes was a former QLDC Manager before securing a $600,000 consultancy contract via ZQN7 - the process did not follow procurement rules.

The new Procurement Policy is a direct result of the Crux investigation into ZQN7 Ltd where the Auditor General found that QLDC staff had failed to keep proper records, failed to follow council finance rules and split a large $600,000 piece of work into 13 different parts in order to conceal the total cost of the work.

The ZQN7 work itself went $204,000 over budget with no penalties or consequences and followed the direct appointment of ZQN7 Ltd with no competitive tender.

Current Chamber of Commerce CEO Ruth Stokes was the main contractor and owner of ZQN7 Ltd with Boult family friend Jendi Paterson being the main and only known employee. Both Stokes and Paterson are former QLDC employees.

The new procurement policy will need up to two more years work, and the likely involvement of external consultants, to produce a complete set of matching procurement guidelines. Here is the current revised vdersion of the guidelines. 

The timeline of QLDC’s financial controls via procurement is:

  • 2016: First Procurement Policy and Guidelines approved under former QLDC CEO Adam Feeley.
  • 2016 -2018. Policy and Guidelines adopted but not followed.
  • 2018 - QLDC hires first Procurement Manager.
  • 2018 – 2020.  ZQN7 Ltd and other consultants/contractors continue to be hired and paid without full compliance to 2016 policy.
  • 2020 – Crux reveals ZQN7 Ltd details.
  • 2021 February – QLDC admits that operations are not possible under 2016 procurement rules and that the rules were not followed. Mayor's internal investigation finds non-compliance “not deliberate”
  • 2021 March - Auditor General finds multiple problems with QLDC failure to comply with 2016 policy and guidelines.
  • 2021 December - QLDC adopts new Procurement Policy with some “quick fixes”

Some of the main features of the new QLDC Procurement Policy, fixed from the ZQN7 episode, are:


  • Identify what you need, including what broader outcomes should be achieved, and then plan how to get it.
  • Set up a team with the right mix of skills and experience.
  • Involve suppliers early – let them know what you want and keep talking.
  • Take the time to understand the market and your effect on it. Be open to new ideas and solutions.
  • Choose the right process – proportional to the size, complexity and any risks involved. > Encourage e-business (for example, tenders sent by email).


  • Create competition and encourage capable suppliers to respond.
  • Treat all suppliers equally – we don’t discriminate.
  • Make it easy for all suppliers (small and large) to do business with QLDC.
  • Be open to subcontracting opportunities in big projects.
  • Clearly explain how you will assess proposals – so suppliers know what to focus on.
  • Talk to unsuccessful suppliers so they can learn and know how to improve next time. 



  • Be clear about what you need, and fair in how you assess suppliers – don’t string suppliers along.
  • Choose the right supplier who can deliver what you need, at a fair price and on time.
  • Choose suppliers that comply with QLDC’s Supplier Code of Conduct.
  • Build demanding, but fair and productive, relationships with suppliers.
  • Make it worthwhile for suppliers – encourage and reward them to deliver great results.
  • Identify relevant risks and get the right person to manage them



  • Get best public value – consider costs and benefits over the lifetime of the goods or services.
  • Make balanced decisions – consider the possible social, environmental, economic and cultural outcomes that should be achieved.
  • Encourage and be receptive to new ideas and ways of doing things – don’t be too prescriptive.
  • Take calculated risks and reward new ideas.
  • Have clear performance measures – monitor and manage to make sure you get great results. Work together with suppliers to make ongoing savings and improvements.
  • It’s more than just agreeing the deal – be accountable for the results.  



  • Be accountable, transparent and reasonable.
  • Make sure everyone involved in the process acts responsibly, lawfully and with integrity.
  • Stay impartial – identify and manage conflicts of interest.
  • Protect suppliers’ commercially sensitive information and intellectual property.


Source: QLDC. New 2021 Procurement Policy.

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