Plan for asset disposal

Understand how to plan for asset disposal

What is planning for asset disposal?

The handling of asset disposal is an important consideration in the forward planning of any procurement activity. 

To start planning for asset disposal, think about disposing of the asset when it is no longer value for money:

  • no longer fit for purpose
  • poses a security risk
  • no longer meets standards e.g. safety or environmental
  • is outdated
  • difficult or costly to maintain or repair
  • is the best time for maximum returns 

For construction, what is procurement is set out in 1.3.1 Application of the Directions and Instructions.

For goods and services, asset disposal is set out in Market analysis and review Section 3 – Disposal of assets.

How to plan for asset disposal 

Step 1: Consider the need

Consider the need that has been defined at Define the need. Establish if there will be an asset that will require disposal. 

The purpose of planning for disposal up front is to influence requirements and evaluation. There are many ways this might impact, such as:  

  • buying technology that is likely to be quickly outdated 
  • if recycling an asset, make sure it contains recyclable materials
  • products made with hazardous materials will require more complex and expensive disposal process

Step 2: Optimise the use of the asset

Consider how and when the asset can be disposed of to create opportunities for the Agency, such as:

  • prolong the life of an asset through transferal to a different business unit, Agency, or another organisation, such as not-for-profit
  • repurpose or upgrade the asset
  • recycling asset materials prior to sending to landfill

Step 3: When to dispose of an asset

Understand when the asset will need to be disposed. At what point in the procurement activity will the asset become outdated, beyond repair or no longer required. 

All assets should be disposed of to ensure maximum returns for the Agency. 

Example: Disposal is an important part of desktop and notebook computer procurement. In this case, disposal could include conducting a procurement to transfer the old models to another organisation or recycling. 

See, End user computing equipment – state purchase contract for desktop and notebook computer asset disposal services.

Step 4: Consider asset disposal risk

Consider the procurement risk management plan. To plan for asset disposal, consider asset risks identified in Analyse risks.

Example: To dispose of desktop and notebook computers, an Agency must ensure all sensitive data has been removed before disposal. Leaving confidential information on a computer could lead to a data privacy breach and poses a risk to information security.

See, Information security – goods and services guide for more information on how to manage this risk.  

Step 5: Methods of asset disposal

The method of disposal will depend upon if the asset can be:

  • improved to extend its lifecycle  
  • transferred to another organisation 
  • recycled 
  • traded-in
  • disposed of through auction or Request for Tender.

Consider Getting started – principles underpin procurement when planning for asset disposal. Disposal of assets needs to align with the principle of probity, taking into consideration the cost of disposal to achieve the best value outcome.

Step 6: Record in Asset management accountability framework

Follow local Agency process to plan and manage asset disposal. 

The Agency will have a process to establish and maintain asset management.

Refer to the Department of Treasury and Finance - Asset Management and Accountability Framework for guidance and compliance with assets. 

Step 7: Record in draft procurement plan

Record information about asset disposal in the draft procurement plan. For more information see, Prepare a procurement plan.


Manage probity and conflicts of interest

Manage probity – consider issues raised at Probity issues by stage and task.

Conflicts of interest can arise during this task.  Identify, declare and manage these.

Address Agency rules

Consult Agency procurement team for advice on meeting:

Follow Agency specific rules on when to seek an approval and who can give the approval.

Follow Agency specific rules for recording decisions and storing records.