In 2020–21, the Victorian Government Purchasing Board (VGPB) held strategic planning sessions with departmental chief procurement officers (CPOs) to refine the Board’s strategic focus for the next few years. The result of these planning sessions was the development of four clear strategic priorities and a supporting action plan, which will guide the direction of the VGPB through to the end of 2023.
This section outlines the actions completed under each of these strategic priorities.
Provide leadership in government procurement of goods and services to deliver value-for-money outcomes for Victorians.
Strategic priorities 2021–23
- Priority 1: Enhance procurement systems and data
- Priority 2: Deliver the expansion program
- Priority 3: Improve visibility and support for good procurement
- Priority 4: Create fit-for-purpose procurement
- Other activities under the Financial Management Act
Priority 1: Enhance procurement systems and data
Access to accurate and timely data is critical to driving good procurement outcomes and savings for government. Technology is also key to driving efficiencies in the procurement process and improving the supplier experience.
Under the oversight of the VGPB, the Department of Treasury and Finance (DTF) is leading two technology-related initiatives to improve procurement outcomes.
Improve procurement data and analysis
A significant program of work is under way to improve the collection, aggregation, reporting and analysis of procurement data across government departments. This work will enable greater data-driven identification of savings opportunities for government.
Following a successful pilot in 2019–20, DTF has established a quarterly process to collect and classify accounts payable data from the nine departments, Victoria Police, the Major Transport Infrastructure Authority and Cenitex.
Work is continuing with the Victorian Centre for Data in the Department of Premier and Cabinet (DPC) to automate collection and classification and improve the accuracy of data classification to enable high-quality analysis.
A procurement data analytics function has now been set up to analyse the data collected from these organisations and build procurement data capability to identify saving opportunities and make more data-driven decisions.
State purchase contract (SPC) category managers now have access to regular data analytic reports including dashboards that help identify contract leakage. This data can be used to make SPCs more effective and identify procurement trends and patterns, leading to opportunities to leverage the buying power of government and implement new SPCs.
Case study: New BusinessHub brings cloud solutions to procurement
BusinessHub is the name given to the new finance systems supporting the modernisation of the Department of Environment, Land, Water and (DELWP’s) finance function.
In November 2020, DELWP replaced its finance and procurement systems with new cloud-based solutions. This included Oracle which replaced DELWP’s finance system and Zycus which replaced the old contracts register to become DELWP’s first online procurement (source-to-contract) . The rollout of Zycus is a two-stage process, with the iSupplier and iContract modules forming part of the initial rollout, and iSource scheduled to be rolled out by the end of 2021.
BusinessHub benefits include:
- user-friendly systems with access to real-time information to get the most important information quickly
- better quality procurement data and reporting to facilitate more informed decision-making
- streamlined processes and more automated workflows to save time and maintain compliance
- improved accessibility and availability of mobile applications
- regular system updates which improve functionality and keep the department up to date with the latest technology
- quicker action and resolution of issues using the system’s collaborative tools
- improved compliance with whole of Victorian Government procurement requirements.
Deliver a single supplier portal
A new online supplier portal is being developed to give suppliers a single, central point to register their business details for use across government departments and agencies.
Currently, suppliers register separately with every Victorian Government department and agency they do business with. The new portal will reduce this administrative burden, making it easier for suppliers to do business with government. Government will also benefit from a more effective mechanism to manage its supplier base.
A pilot was conducted in 2020–21 and will be deployed across all departments in 2021–22, after consulting with departments on the outcomes of the pilot.
Priority 1: Key achievements
- Quarterly data collection automated – about 1.8 million transactions a year classified for analysis
- Data analytics function established
- Supplier portal pilot near completion
- Analytics dashboard for category managers built.
Case study: Technology delivering greater efficiency in procurement
The Department of Justice and Community (DJCS) is ramping up their use of procurement technology, giving them more insight into procurement spend and activities and improving compliance.
The Robobai spend data classification tool enabled DJCS to restructure Procurement Services into a category management operating model. A deeper analysis of spend enables DJCS to make fact-based procurement decisions. The data is used to prepare detailed procurement category plans that identify opportunities for procurement savings, aggregating spend and incorporating important social objectives into procurement activities.
The Jira procurement portal was also refined during the year enabling staff to register and track procurement activities end-to-end and improve allocation of resources to strategic priorities and projects.
DJCS used Promapp to develop a series of interactive process workflows, which make it easier for staff to follow procurement rules and procedures. This improved compliance by helping staff understand their procurement options depending on what they are buying.
During COVID-19 restrictions, DocuSign was used more widely through the Zycus procurement system. This facilitated electronic signing of contracts by all parties on a secure platform. The result was increased efficiency and continuous delivery of DJCS’ procurement activities.
Priority 2: Deliver the expansion program
A key part of the Victorian Government’s reform agenda is expanding the remit of the VGPB to include agencies subject to the Standing Directions of the Financial Management Act , such as TAFEs, water corporations and catchment management authorities.
An additional 125 agencies will be subject to VGPB supply policies from 1 July 2021 with a transition period to enable compliance.
The broader application of VGPB policies is designed to embed consistent and simplified procurement processes and streamlined procurement governance arrangements across government. This will give greater oversight of government spending, better value-for-money outcomes and make it easier to do business with government.
Suppliers will also experience benefits such as:
- simpler and more consistent tender processes that will help small, medium and local businesses supply to government
- proactive market engagement to help identify new suppliers
- more information released sooner through forward activity plans
- standardised and simplified contracts presented in plain English
- timely and relevant feedback offered to all suppliers
In 2020–21, we updated our goods and services policies to make it easier for agencies to scale the policies to suit their size. Compliance requirements are aligned to an organisation’s procurement risk and complexity profile.
We also developed a communications and engagement plan to inform and support incoming agencies with their transition to VGPB supply policies and SPCs.
Incoming agencies can also make greater use of SPCs, with a two-year progressive transition period starting on 31 December 2021. SPCs are an important mechanism for government to achieve greater value for money and streamline delivery of outcomes, by aggregating demand, centralising due diligence processes and strong supplier relationship management.
Exemptions to an SPC are available where the agency is unable to obtain value for money under the SPC, or where a regional supplier can provide the same or better value.
Expanding the VGPB's remit
- 35 departments and agencies
- 125 additional agencies from 1 July 2021
Communication and engagement activities
In 2020–21, we began communication and engagement activities designed to help incoming agencies make their transition as easy as possible. This work will continue throughout 2021–22. It is important to support incoming agencies in their transition process and incorporate feedback loops into the activities via surveys and specific feedback engagements.
These feedback loops will be actively monitored by the Board and used to modify the support programs or change the approach as needed.
The VGPB began its first engagement activities with incoming agencies in June 2021. Workshops will continue until 2023 and cover a full spectrum of topics including understanding policy requirements, applying VGPB guidance, tools and templates and delivering good procurement outcomes. This will enable all expansion agencies to work through the transition process together, with opportunities to check-in during the lead-up to and following key implementation milestones.
The VGPB also began engaging with regional Chambers of Commerce to help suppliers understand the changes. Further support on how to supply to government is being planned with Business .
Understanding the attestation process
To minimise the administrative burden on incoming agencies, the VGPB will monitor compliance of incoming agencies with the policy framework through the existing Standing attestation process.
Guidance for agencies on this process has been provided through workshops and the Standing Directions Community of Practice. Further guidance materials and dedicated workshops will be provided in the lead-up to the first attestation on 30 June 2022.
An online Expansion Program Community of Practice has been established on the Victorian Government’s intranet to connect with individuals from government agencies looking for expansion information. Members can access guidance materials and invites to information sessions and workshops.
The Buying for Victoria website has been updated with guidance and tools, including an updated Guide to aligning with VGPB supply policies and a self-assessment checklist of requirements.
Priority 3: Improve visibility and support for good procurement
Procurement can contribute significantly to achieving government objectives, whether it’s buying the right product, getting better value for money, or following proper process to safeguard against risks. To maximise the contribution that the procurement profession can make, we need to ensure it has a seat at the table.
The VGPB and CPOs agree that with a greater focus on stakeholder communication and engagement, the VGPB can play a key role in lifting the profile of the profession within government and building awareness of the value that procurement professionals can bring.
The VGPB engages with organisations and other stakeholders on a broad range of procurement activities, enabling the VGPB to monitor compliance more widely, engage and interact with procurement personnel across government and give strategic advice.
The VGPB will also seek to increase its visibility among buyers and suppliers to build stronger understanding of the Government’s procurement policies and create feedback loops to support continuous improvement.
In 2020–21, we developed a stakeholder engagement plan to support this priority. The plan sets out how we will engage with key stakeholders including CPOs, public sector leaders and government buyers and suppliers over the next two years to lift the profile of procurement across government.
We started this engagement activity with VGPB members delivering presentations in the first half of 2021 to the Public Sector Administration Committee, the CPO Forum and the Government Buyers Community of Practice.
The level of stakeholder engagement activity will ramp up in 2021–22, with a series of consultations planned to understand barriers to good procurement under Priority 4, and several Board member engagements with departments, public sector leaders and supplier representative groups.
In 2020–21, five organisations presented to the VGPB at their bi-monthly board meeting as follows.
DTF presented a draft business case for a proposed SPC.
Cenitex presented its audit outcomes
DJPR presented on its accreditation
DPC and DELWP presented a proposed upgrade of geospatial data and analytics panel arrangements in the eServices SPC
DPC presented the Victorian Government Digital Strategy.
Case study: A procurement working group for Aboriginal businesses
The Department of (DoT) is committed to seeking opportunities to engage with Aboriginal businesses across the transport portfolio.
In 2020, DoT set up a Transport Portfolio Aboriginal Business Engagement Working Group led by DoT CPO, Lisa Williams, with representatives from across the transport portfolio.
The working group brings together transport representatives across the portfolio committed to identifying procurement opportunities in their divisions and agencies to engage with Aboriginal businesses.
Meeting monthly, the group invites Aboriginal businesses to present their business offerings, hear about the company’s experience with government procurement and discuss the challenges they face working within the government procurement framework.
These insights will support the transport portfolio in achieving public Aboriginal procurement commitments and targets, identifying current gaps and barriers to these, and creating a continuous flow of Aboriginal business engagement and development.
The working group shares its experiences, initiatives and actions with the Transport Portfolio Aboriginal Self-Determination Steering Committee providing for a whole-of-transport focus on increasing its engagement with, and support of, the Aboriginal Victorian community
‘The working group provides the opportunity to help shape procurement engagement to increase our engagement with Victorian Aboriginal businesses,’ said Lisa.
Case study: Aboriginal cultural awareness training
In December 2020, the VGPB invited Karen Milward to provide an Aboriginal Cultural Awareness training session to strengthen the Board’s understanding of the diverse Victorian Aboriginal business sector. Karen works as an Aboriginal consultant and is also the Chair of Kinaway Aboriginal Chamber of .
This session helped the Board understand the diversity of cultures, languages, kinship structures and ways of life among Aboriginal and Torres Strait Islander peoples.
Cultural awareness training is an important step for government boards. The VGPB’s goods and services procurement policy supports the Government’s priority to improve opportunities for Aboriginal and Torres Strait Islander peoples through procurement and achieve a 1% procurement target from Victorian Aboriginal businesses through the Social Procurement Framework.
Priority 4: Create fit-for-purpose procurement
The VGPB policy framework is based on sound procurement practice that delivers good commercial outcomes and ensures accountability and transparency. As such, it is a ‘fit-for-purpose’ procurement framework.
With the procurement landscape constantly changing, our policy framework and its application must also evolve to stay relevant and aligned with best practice. Under this priority, the VGPB seeks to streamline and simplify the procurement framework, and identify barriers to fit-for-purpose procurement. The VGPB periodically reviews its framework to look for improvements, as well as opportunities to share information and build capability.
The VGPB seeks to help the Victorian Government become a buyer of choice. To support this goal, the VGPB will investigate the complexity of the wider procurement landscape, to identify opportunities to streamline policies and reduce the complexity of doing business with government. Our ongoing work with agencies as part of the expansion rollout also informs our discussions on what fit-for-purpose procurement looks like.
Investigate barriers to fit-for-purpose procurement
In 2020–21, we began stakeholder consultations into barriers to fit-for-purpose procurement to inform a targeted program of work to improve procurement policies and practices.
In 2021–22, the VGPB will set up a steering committee of VGPB members and departmental CPOs to oversee the stakeholder consultation, and the identification, prioritisation and delivery of improvement opportunities.
This will be an iterative and collaborative process focused on co-designing and implementing solutions.
Procurement research and intelligence function
In 2020–21, we set up a procurement research and intelligence function to track developments and get insights into the Victorian Government’s procurement reform priorities. This will help inform our current and planned policy initiatives and identify new opportunities to enhance procurement policies and practice.
We increased our interjurisdictional engagement with other Australian and international governments and the Australasian Procurement and Construction Council to advance public procurement. For example, our ongoing collaboration with colleagues in the New Zealand Government involved comparing procurement operating models, priorities and initiatives and has informed activities undertaken in relation to this priority.
Case study: Investing in digital skills development in Victoria
The Victorian Government’s $64 million Digital Jobs will equip mid-career Victorians with up-to-date digital skills and place them in paid, short-term digital roles with businesses.
DJPR’s procurement team played a key role in getting this program off the ground. DJPR’s Strategic Sourcing specialists helped the program team to create a skilled training supplier panel which offers participants a range of digital courses.
The team negotiated terms that allow the program to be as flexible as possible for providers, who have the ability to change and update their course offerings to suit participant needs. This innovative solution was a first for the department and a great example of delivering ‘fit-for-purpose’ procurement.
The Digital Jobs Program is open to people of all backgrounds living anywhere in Victoria, with a focus on women looking to re-enter the workplace as well as those whose job was impacted by COVID-19. Over the next four years, up to 5 000 Victorians will be supported to retrain and reimagine their career.
This initiative will significantly grow the state’s digital workforce and shows how good procurement is being used by DJPR to boost Victoria’s economic recovery and growth by creating more jobs and assisting in the skills development of Victorians.
Address barriers to fit-for-purpose procurement, including focused and coordinated capability building
Just before the end of the 2019–20 financial year, we published a buyer capability framework setting out standardised skillsets for procurement professionals. Skillsets are based on procurement complexity, making it suitable for any size agency.
In 2020–21, we updated the capability guide and tools to align with this framework. The capability assessment tool was also revised in preparation for the expansion rollout to ensure that the rating scale is relevant for smaller agencies.
We hosted three procurement community of practice forums during the year, bringing together more than 800 procurement practitioners from across government. Moving this forum online to meet COVID-19 restrictions gave us the additional benefit of extending our reach and having regionally-based agencies participate.
This forum helps build awareness of procurement policies, guides, tools and templates and encourages a culture of procurement knowledge sharing and best practice.
We also host a smaller, more focused group for procurement practitioners called the whole of Victorian Government (WoVG) Procurement Officers meeting. We held six procurement officer meetings during the year, covering a range of topics.
This collaborative forum is focused on the changing procurement landscape, pressing issues and sharing ideas and best practice to improve collective procurement expertise and capability. This is a great opportunity for those working in procurement policy to network and learn from their peers.
Our online buyers community of practice on the innovation network expanded from about 600 to 800 members, allowing us to reach even more procurement professionals across government with procurement updates, resources and materials.
Topics on offer at the Whole of Victorian Government procurement officers meetings:
- August 2020 – Independent Broad-based Anti-corruption (IBAC) presented on identifying and dealing with conflicts of interest in procurement
- October 2020 – PepperGreen , an Australian disability social enterprise presented on working with social enterprises
- December 2020 – Social Procurement Framework Practical tools and templates to support government buyers with incorporating social procurement content in their invitations to supply
- February 2021 – Category management in WoVG context with DET and DJCS presenting their category management approach
- April 2021 – Circular economy and sustainability with a single‑use plastic policy update from DELWP and a Zoos Victoria case study
- June 2021 – Workshop on defining fit-for-purpose procurement and identifying barriers to its implementation
Priority 4: Key achievements
- 3 Procurement Community of Practice forums with 533 attendees
- 6 Procurement Officers’ meetings
- 803 government members of our online buyers community of practice (600+ end of last year)
Cleaning contract awarded to Aboriginal company
Cleaning offices is an important task. Finding the right company can be challenging.
The Victorian Fisheries (VFA) did things a little differently this year when they approached the market for a company to clean their offices across regional Victoria.
VFA’s CEO Travis Dowling identified early in the planning process that the contract offered an opportunity to create a social value outcome. To see this vision through, his team approached cleaning and maintenance companies that were either social enterprises, disability enterprises or Aboriginal companies to submit a tender.
The three-year $700 000+ cleaning contract was awarded to Jarrah Integrated Services.
Based on Wurundjeri land in North Melbourne, Jarrah Integrated Services was started in 2017 by Chadd Croshaw, a proud Anaiwan man from Tingha, New South Wales.
Jarrah Integrated Services is committed to creating and promoting the employment of Aboriginal and Torres Strait Islander people and businesses. They offer training and support to grow measurable, long-term career pathways for all Aboriginal Australians and have exceeded their own aspirations for Aboriginal employment.
‘We are delighted that we could offer Jarrah Integrated Services the job, as well as provide the opportunity for other social enterprise companies to be engaged in the tender process,’ said Travis.
Harmonise goods and services and construction procurement
A review of government procurement in late 2017 noted significant differences in processes for construction procurement and goods and services procurement. The review recommended that departments and agencies seek to harmonise these processes to reduce complexity and the administrative burden for buyers and suppliers.
Benefits of harmonising procurement processes:
- Quick and coordinated delivery of essential services
- More efficient procurement processes
- Less complexity
- Reduced administrative burden
- More consistent application of procurement principles
- A consistent and integrated procurement framework
In 2020–21, in consultation with the VGPB, DTF released a new approach to harmonisation for departments and agencies that procure a combination of goods and services and construction goods and services. These organisations will now harmonise their two policy frameworks where relevant and useful, using existing procurement arrangements and opportunities to maximise benefits for buyers.
An integrated procurement framework template was published to help agencies integrate their separate procurement frameworks, on a case-by-case basis.
Going forward, the VGPB will continue to consider how harmonisation could work more broadly to simplify the procurement landscape.
Update standard contract templates in response to the Fair Payments Policy
The Minister for Small Business announced reforms to the Government’s Fair Payment , with payment terms for contracts under $3 million to move from the current 30 days to 10 days from 1 January 2021. We updated all six VGPB standard contract templates to reflect these changes.
Case study: Mark of quality for Victoria’s livestock
The Department of Jobs, Precincts and (DJPR’s) procurement team helped source new contracts for the supply of electronic National Livestock Identification (NLIS) tags to Victorian producers. The NLIS is Australia's system for the identification and traceability of cattle, sheep and goats. This protects the reputation of Victoria's livestock industry as a supplier of ‘clean’ meat and dairy products for domestic and export markets.
DJPR contracted four tag manufacturers to make 14 different and suitable NLIS ear tags as choices for more than 45,000 Victorian cattle, sheep and goat producers. These contracts will supply the 13 million electronic tags ordered through Agriculture Victoria each year.
In conjunction with an industry sourced subsidy, the contracts allow Victorian producers to access the most cost-effective electronic NLIS tags in Australia. They also allow DJPR to ensure the tag manufacturers have appropriate quality assurance processes in place and provide excellent customer interaction to Victorian producers.
All the tag manufacturers have a presence in Australia, with two manufacturing exclusively in Victoria. This is a great example of how procurement can be used to deliver benefits to the local economy.
More than half of Victoria’s total product exports come from food and fibre products. The robust livestock traceability system, underpinned by electronic NLIS tags, allows DJPR to maintain the biosecurity and reputation of Victoria’s livestock trade. This is crucial in maintaining the health of Victoria’s economy.
Reviewed 26 October 2021