VGPB activities in 2020–21

Strategic priorities

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.

Vision

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 1994.

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 Insights 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.

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.

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 1994, 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 Victoria.

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 Directions 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.

Connecting online

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.

VGPB meetings

In 2020–21, five organisations presented to the VGPB at their bi-monthly board meeting as follows.

November 2020

DTF presented a draft business case for a proposed SPC.

December 2020

Cenitex presented its audit outcomes

February 2021

DJPR presented on its accreditation

April 2021

DPC and DELWP presented a proposed upgrade of geospatial data and analytics panel arrangements in the eServices SPC

June 2021

DPC presented the Victorian Government Digital Strategy.

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

Researching barriers

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.

Interjurisdictional engagement

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.

Address barriers to fit-for-purpose procurement, including focused and coordinated capability building

Capability framework

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.

Collaborative forums

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.

Online forums

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 Commission(IBAC) presented on identifying and dealing with conflicts of interest in procurement
• October 2020 – PepperGreen Farm, 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

Other activities

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 Policy, 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.