Priority 4: Create fit-for-purpose procurement

Making it easier to do business with Government.

A key focus for the VGPB is to simplify and streamline government procurement to help make the Victorian Government a buyer of choice. The VGPB does this by addressing barriers to fit-for-purpose procurement, which are identified through both consultation and ongoing feedback channels.

In 2022–23, the VGPB progressed 2 projects under this priority to improve value-for-money outcomes in procurement. A contract disclosure guide to support buyers’ compliance with disclosure requirements was also developed and published on the Buying for Victoria website in December 2022.

The VGPB is also overseeing a project to review and simplify its standard form contracts and templates and develop guidance for buyers and suppliers to explain the clauses. These updated templates will support buyers to better navigate and implement policies and provide consistency for suppliers. These templates are expected to be published on the Buying for Victoria website in 2023–24.

New policies and guidance material 

Improving value-for-money outcomes

The Government uses its spending power to achieve a range of policy outcomes for Victorians. Consultation and research show that it can be challenging for buyers and suppliers to understand how these policies intersect when navigating the procurement process. To address this, the VGPB is strengthening its guidance on evaluating value for money. This will help departments and agencies assess and achieve value for money when weighing up multiple government policy outcomes during the procurement process.

Value for money is a foundational principle of the VGPB policy framework. It involves carefully evaluating many competing factors to procure the most suitable product or service. The new guide will reinforce the requirement to show value for money when procuring goods and services and includes an updated definition of value for money with broader government objectives and supplier capability.

The guide emphasises value for money across the entire lifecycle of goods and services and explains how to assess and achieve this. It links strategic planning with planning for individual procurements.

Supporting collaboration across Government 

Collaboration within and between departments and agencies when buying goods and services offers many benefits. SPCs and sole entity purchase contracts (SEPCs) that combine demand for commonly used goods and services are examples of where collaboration has led to improved value for money, standardised procurement processes and reduced duplication.

Consultation and research have identified other opportunities for departments and agencies to work together to improve value-for-money outcomes. Work is currently underway to update the VGPB market analysis and review policy and related guides to facilitate collaboration in procurement. The updated policy and guides will set out a clear and consistent approach to collaboration between agencies.

The updated policy and guides are expected to be released by the end of 2023.

Improving contract disclosure guidance

Contract disclosure, including disclosure of variations, ensures high standards of probity and transparency in government procurement. Disclosing contracts builds public trust and allows suppliers and the Victorian community to access clear and accurate information on government contracts and see how agencies perform their functions.

Through department and agency feedback, the VGPB identified common issues with interpreting and applying contract disclosure policy requirements. In response, the VGPB released a contract disclosure guide to help buyers comply with disclosure requirements in the VGPB’s contract management and contract disclosure policy. The guide details how to publicly disclose contractual information in different scenarios. It is expected to promote policy compliance and increase consistency of contract disclosures across government.

Case study: Department of Education’s unprecedented air purifier procurement mission for safe schools

Photo of children in a classroom sitting at desks

With the threat of COVID-19 still looming in 2022, the Department of Education (DE) (formerly the Department of Education and Training) took on the massive task of rapidly procuring and delivering 51,000 air purifiers to 2,177 schools across Victoria over a 4-month period.

Despite the tight timeframe, the department was able to quickly mobilise a team to work with a variety of suppliers, including social benefit supplier Wallara, to ensure the safe delivery of the air purifiers just in time for the start of the school year.

A team effort from start to finish

DE worked with the Department of Health and the Department of Jobs, Precincts and Regions (now the Department of Jobs, Skills, Industry and Regions) to develop a suitable design specification and activated its Emergency Procurement Plan to enable a streamlined and flexible procurement process to facilitate a swift response to the needs of the project.

“The VGPB's policies relating to emergency procurement allowed us to deliver the air purifiers in a timely manner,” said Sandy Carveth, CPO at DE.

Once the air purifiers were sourced, the warehousing and distribution of the 51,000 units presented another challenge. Existing lists of warehouse and distribution services were unable to fully meet the requirements due to COVID and fuel shortages, so the department had to explore other options.

DE secured seven suppliers to deliver the units. This included a mini consortium of social benefit suppliers led by Wallara who delivered a total of 10,000 units.

“Our procurement team worked round the clock, leveraging existing contracts and even recruiting 20 volunteers from within the department, to overcome the challenges of delivery logistics,” added Sandy.

“But the success of this procurement mission would not have been possible without the help of suppliers.”

Coordinating with school security officers enabled delivery during the school holidays, and as a result, the last 500 air purifiers were delivered just in time for the start of term 1.

Maintaining good procurement throughout

Although facing tight timelines and frequent contract negotiations, DE secured good value for money, including a per unit cost from the supplier that was below market rates and included all freight costs.

The department’s commitment to prioritise the safety of teachers and students exemplifies how teamwork, determination and a good procurement strategy can overcome the most difficult obstacles.

“What we are most proud of is that, despite the tight timeframes, we were still able to achieve good value for money,” 

Sandy Carveth
CPO at the Department of Education