VICTORIAN GOVERNMENT ANNUAL REPORT 2009 … REPORT 2009-10 ... of the Financial Management Act 1994, this annual report ... in 2009-10, the victorian government purchasing board

VICTORIAN GOVERNMENT PURCHASING BOARD

ANNUAL REPORT 2009-10ACHIEVING EXCELLENCE IN GOVERNMENT PROCUREMENT

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victorian government PUrcHaSing board

annUal rePort 2009-10

visionmission 1

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visionto Provide leaderSHiP in government ProcUrement of goodS and ServiceS

missionto create a Policy framework wHicH acHieveS valUe for money in victorian government ProcUrement, wHile maintaining tHe HigHeSt StandardS of Probity, minimiSing riSk and maximiSing oPPortUnitieS for local bUSineSSeS

Chairman’s report 2 about the vgpb 7Chairman and Board memBers 10

proCurement aCtivity in 2009-10 12summary of one-off supply approvals 13

standing offer agreements 22

strategiC proCurement plans 26

departmental proCurement aCtivities 28

ComplianCe with vgpB proCurement poliCies 33

aCCredited purChasing unit aCtivities 34

proCurement training and development 41attendanCe 41

appendixes 43proCurement weBsites 43

glossary 44

aCronyms 46

figures and taBles 47

viCtorian government purChasing board annual report 2009-10secretariat victorian government purchasing board department of treasury and Finance level 8, 120 Collins street melbourne viC 3000 australia

telephone: +61 3 8683 2944 Facsimile: +61 3 8683 2997 www.procurement.vic.gov.au

published by the government services division, department of treasury and Finance

printed by stream solutions level 3, 157 spring street melbourne viC 3000 australia

© Copyright state of victoria 2010

this publication is copyright. no part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 (Cwlth).

issn 1444-4097 series no. 15

published september 2010

a pdF version of this report can be viewed at www.procurement.vic.gov.au

viCtorian government purChasing Board

annual report 2009-10

Contents



visionmission 1

Back to Contents

visionto Provide leaderSHiP in government ProcUrement of goodS and ServiceS

missionto create a Policy framework wHicH acHieveS valUe for money in victorian government ProcUrement, wHile maintaining tHe HigHeSt StandardS of Probity, minimiSing riSk and maximiSing oPPortUnitieS for local bUSineSSeS

Chairman’s report 2 about the vgpb 7Chairman and Board memBers 10

proCurement aCtivity in 2009-10 12summary of one-off supply approvals 13

standing offer agreements 22

strategiC proCurement plans 26

departmental proCurement aCtivities 28

ComplianCe with vgpB proCurement poliCies 33

aCCredited purChasing unit aCtivities 34

proCurement training and development 41attendanCe 41

appendixes 43proCurement weBsites 43

glossary 44

aCronyms 46

figures and taBles 47

viCtorian government purChasing board annual report 2009-10secretariat victorian government purchasing board department of treasury and Finance level 8, 120 Collins street melbourne viC 3000 australia

telephone: +61 3 8683 2944 Facsimile: +61 3 8683 2997 www.procurement.vic.gov.au

published by the government services division, department of treasury and Finance

printed by stream solutions level 3, 157 spring street melbourne viC 3000 australia

© Copyright state of victoria 2010

this publication is copyright. no part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 (Cwlth).

issn 1444-4097 series no. 15

published september 2010

a pdF version of this report can be viewed at www.procurement.vic.gov.au

viCtorian government purChasing Board

annual report 2009-10

Contents

aboUt tHiS annUal rePortAs required by section 54M of the Financial Management Act 1994, this annual report describes the work and activities of the Victorian Government Purchasing Board from 1 July 2009 to 30 June 2010. This report has information about purchasing activity undertaken by eleven departments and two administrative offices.


annUal rePort 2009-10 3

Back to Contents



Back to Contents

Chairman’s report

Chairman’s report

introdUction

in 2009-10, the victorian government purchasing board (vgpb) continued to work towards improving procurement across government. research into the development of the new procurement model for government was a priority for the vgpb in 2009-10.

during the year, the department of treasury and Finance assisted the vgpb with extensive consultation with key stakeholders to help shape the procurement framework. the profile of procurement as a professional service delivering value for money to the victorian community increased significantly during the year.

the vgpb remains committed to overseeing implementation of the procurement reform, building on the momentum achieved with key stakeholders and providing the necessary guidance to ensure consistency of the reform’s application across government.

Chairman’s report

key Strategic PrioritieS for 2009-10In 2009-10, the VGPB focused on four main priorities related to procurement reform:

developing a proCurement governanCe model based on Complexity and CapabilityBack in 2008-09, the VGPB began assessing procurement policy and governance frameworks with particular reference to the interrelationship between procurement complexity and the capability needed to effectively manage procurement processes.

At the same time, the VGPB reviewed the supply policy under which departments are authorised to administer their own procurement activities up to a specified dollar value threshold. This analysis took into account the maturity of procurement capabilities across government and the increasing professionalism of the procurement environment.

This research supported the premise that procurement process decisions based on dollar thresholds can be inefficient, increasing costs to government and suppliers. It also identified opportunities for improved government procurement outcomes with a move to a principles-based framework that matches process and governance arrangements to the complexity of the procurement undertaken.

A procurement framework based on complexity recognises that government bodies know their business best and are best placed to assess the most appropriate path to market.

The VGPB has endorsed ‘in principle’ a new approach to government procurement that reinforces high standards of probity and transparency. It requires the application of sufficient capability to the conduct of procurement activity and provides departments with the capacity to choose the best path to market based on the complexity of a procurement.

developing a standardised proCurement governanCe model that Could apply aCross all major government entitiesIn line with its new approach to government procurement based on complexity and capability, the VGPB is finalising the development of a standardised framework with broad applicability across government bodies.

The framework will require the appointment of a chief procurement officer and the implementation of an internal procurement unit in departments to provide additional support for the accountable officer. This will ensure the development of internal procurement governance, capability and process that meet the specific needs of the organisation and standards of professionalism expected of the public service.

As part of this process, best practice guidelines, tools and templates are being developed to support a new approach to procurement.

review the role oF the vgpb in wider government proCurement within the Current legislative environmentThe VGPB has examined its own role in the context of the current legislative environment, with specific reference to:

– the steps needed for departments to successfully transition to a new framework based on complexity and capability; and

– ∑delivering genuine value to government in the oversight of high-risk procurement and whole-of-government procurement capability.

As the procurement framework moves away from dollar thresholds towards a procurement model based on complexity, the VGPB will transition away from approval of procurement activities based on dollar value.

Under the new framework, the VGPB will refocus its attention primarily on the development of procurement capability and the provision of assurance to government on the procurement probity and process of those complex departmental procurement activities that present the greatest procurement risk to the State.

aboUt tHiS annUal rePortAs required by section 54M of the Financial Management Act 1994, this annual report describes the work and activities of the Victorian Government Purchasing Board from 1 July 2009 to 30 June 2010. This report has information about purchasing activity undertaken by eleven departments and two administrative offices.



Back to Contents



Back to Contents

Chairman’s report

Chairman’s report

introdUction

in 2009-10, the victorian government purchasing board (vgpb) continued to work towards improving procurement across government. research into the development of the new procurement model for government was a priority for the vgpb in 2009-10.

during the year, the department of treasury and Finance assisted the vgpb with extensive consultation with key stakeholders to help shape the procurement framework. the profile of procurement as a professional service delivering value for money to the victorian community increased significantly during the year.

the vgpb remains committed to overseeing implementation of the procurement reform, building on the momentum achieved with key stakeholders and providing the necessary guidance to ensure consistency of the reform’s application across government.

Chairman’s report

key Strategic PrioritieS for 2009-10In 2009-10, the VGPB focused on four main priorities related to procurement reform:

developing a proCurement governanCe model based on Complexity and CapabilityBack in 2008-09, the VGPB began assessing procurement policy and governance frameworks with particular reference to the interrelationship between procurement complexity and the capability needed to effectively manage procurement processes.

At the same time, the VGPB reviewed the supply policy under which departments are authorised to administer their own procurement activities up to a specified dollar value threshold. This analysis took into account the maturity of procurement capabilities across government and the increasing professionalism of the procurement environment.

This research supported the premise that procurement process decisions based on dollar thresholds can be inefficient, increasing costs to government and suppliers. It also identified opportunities for improved government procurement outcomes with a move to a principles-based framework that matches process and governance arrangements to the complexity of the procurement undertaken.

A procurement framework based on complexity recognises that government bodies know their business best and are best placed to assess the most appropriate path to market.

The VGPB has endorsed ‘in principle’ a new approach to government procurement that reinforces high standards of probity and transparency. It requires the application of sufficient capability to the conduct of procurement activity and provides departments with the capacity to choose the best path to market based on the complexity of a procurement.

developing a standardised proCurement governanCe model that Could apply aCross all major government entitiesIn line with its new approach to government procurement based on complexity and capability, the VGPB is finalising the development of a standardised framework with broad applicability across government bodies.

The framework will require the appointment of a chief procurement officer and the implementation of an internal procurement unit in departments to provide additional support for the accountable officer. This will ensure the development of internal procurement governance, capability and process that meet the specific needs of the organisation and standards of professionalism expected of the public service.

As part of this process, best practice guidelines, tools and templates are being developed to support a new approach to procurement.

review the role oF the vgpb in wider government proCurement within the Current legislative environmentThe VGPB has examined its own role in the context of the current legislative environment, with specific reference to:

– the steps needed for departments to successfully transition to a new framework based on complexity and capability; and

– ∑delivering genuine value to government in the oversight of high-risk procurement and whole-of-government procurement capability.

As the procurement framework moves away from dollar thresholds towards a procurement model based on complexity, the VGPB will transition away from approval of procurement activities based on dollar value.

Under the new framework, the VGPB will refocus its attention primarily on the development of procurement capability and the provision of assurance to government on the procurement probity and process of those complex departmental procurement activities that present the greatest procurement risk to the State.


annUal rePort 2009-10 4 victorian

government PUrcHaSing board


Back to ContentsBack to Contents

Chairman’s report

Chairman’s report

proFessionalise proCurement Capability with Formal aCCreditation and training (building government proCurement Capability) The VGPB is aligning Victorian Government procurement training with the twofold agenda of the Australasian Procurement and Construction Council (APCC) – to build government procurement capability and establish procurement as a profession in Australia and New Zealand.

The Victorian Government currently delivers procurement training through its Procurement and Contracting Centre for Education and Research (PACCER) program. Alignment with the APCC’s strategy will open up the Victorian Government public sector to a greater range of courses available through the vocational education and training (VET) and higher education sectors.

These two education sectors offer significantly more units of competency than PACCER, as well as offering VET and higher education qualifications including undergraduate and postgraduate strategic procurement qualifications.

Quality assurance for the registration and auditing of training providers and accreditation of courses is provided under the National Training Framework.

Implementation of this strategy in 2010-11 will be supported by a communications program to departments to ensure they are well-positioned to align their training requirements with the VET sector. PACCER will be decommissioned from 31 December 2010. PACCER course material will be available on the procurement website (www.procurement.vic.gov.au) from 1 January 2011.

ProjectS and initiativeS in 2009-10tenders viC Continues to growThe tender website, Tenders VIC, underwent several system developments in 2009-10, adding greater functionality for users and making it the default choice for Victorian Government departments. Enhancements include supplier briefing meeting registrations, online forums, creation and management of panel contracts, making statistical reports and the ability to combine tender advertisements.

These improvements provide government and industry with a more sophisticated and secure tender facility. An effective tender system can improve the competitiveness of small to medium enterprises by substantially reducing the efforts required by industry to tender for government business.

improving the ContraCts publishing system The VGPB is committed to ongoing improvement of its contracts publishing system. Last year, the VGPB developed a number of improvements to system functionality, for example, better reporting capability in relation to disclosing contract variation details. The VGPB expects these improvements to be implemented in early 2010-11.

The VGPB continues to work on the stability and reliability of the system to ensure sufficient capacity to store contract details online.

managing exemptionsThe VGPB amended its exemption policy; Exemption from Seeking Multiple Quotes, Open or Selective Tendering (Limited Tendering) and ICT IP Default Position.

This policy recognises that an open approach to market is not always the optimal sourcing strategy. There are times when it may be more appropriate to approach a limited number of suppliers or a single supplier during the procurement process. The amended exemption policy covers exemptions from obtaining multiple quotes for purchases up to $150 000 and limited tendering procedures.

Exemption definitions were consolidated into two categories to increase understanding and reduce complexity in applying the policy. Each category is aligned with specific process approval requirements.

The policy was extended to include the circumstances in which departure from the information communications technology software intellectual property (IP) ownership position may apply. The default position with regard to IP for software created under contract allocates ownership to the software developer rather than the Victorian Government. This policy allows for exceptional circumstances in which government entities may need to own IP software created by software developers. For example, security considerations and situations where the government entity needs exclusive use of the software.

This policy was amended after extensive consultation with departments.

state purChase ContraCts poliCyThe VGPB reviewed the State Purchase Contracts (SPC) policy to simplify policy arrangements by changing the requirements for contract variations and SPC expenditure reporting, and separating whole-of-government purchasing arrangements from departmental contract arrangements.

The amended SPC policy now applies only to whole-of-government arrangements. The VGPB created a separate Sole Entity Purchase Contracts (SEPC) policy to replace a number of existing departmental contract arrangements previously covered under the SPC policy. This includes open state purchase contracts, departmental standing offer agreements and open standing offer agreements.

Both the SPC and SEPC policies allow for mandatory and non-mandatory arrangements and include variation requirements specific to each procurement policy. The policies are structured to ensure consistency in their application across departmental and whole-of-government arrangements.

variation proCess approval For one-oFF supply ContraCts The VGPB reviewed similar policy requirements for one-off supply contracts. Administrative and financial variations are now better defined to ensure correct and consistent application, and to clarify reporting processes for departmental accredited purchasing units and the VGPB.

key Strategic PrioritieS for 2010-11The VGPB recognises the importance of continuing its reform agenda to further enhance the integrity of government procurement. Strategic priorities for the coming year include:

developing proCurement Capability aCross government by liFting the FoCus on proCurement proFessionalismRaising the professional capabilities of procurement practitioners will be further championed by the VGPB in 2010-11 through its collaboration with the tertiary education sector and procurement education bodies including the Australasian Procurement and Construction Council and the Chartered Institute of Purchasing and Supply.

The Board will continue to implement its procurement training strategy, decommissioning PACCER and moving towards a system of more formal tertiary qualifications. This will give departments access to a range of accredited procurement modules, allowing them to build capability in line with their requirements.

enhanCing aCCess For small to medium business enterprises and the not-For-proFit seCtor to government purChasing opportunitiesThe VGPB recognises the importance of maximising local industry participation in government procurement. In 2010-11, the Board will examine and identify potential opportunities to increase the participation of local small to medium enterprises and the not-for-profit sector, ensuring fair, equitable and competitive access to government procurement opportunities.






Chairman’s report

Chairman’s report

proFessionalise proCurement Capability with Formal aCCreditation and training (building government proCurement Capability) The VGPB is aligning Victorian Government procurement training with the twofold agenda of the Australasian Procurement and Construction Council (APCC) – to build government procurement capability and establish procurement as a profession in Australia and New Zealand.

The Victorian Government currently delivers procurement training through its Procurement and Contracting Centre for Education and Research (PACCER) program. Alignment with the APCC’s strategy will open up the Victorian Government public sector to a greater range of courses available through the vocational education and training (VET) and higher education sectors.

These two education sectors offer significantly more units of competency than PACCER, as well as offering VET and higher education qualifications including undergraduate and postgraduate strategic procurement qualifications.

Quality assurance for the registration and auditing of training providers and accreditation of courses is provided under the National Training Framework.

Implementation of this strategy in 2010-11 will be supported by a communications program to departments to ensure they are well-positioned to align their training requirements with the VET sector. PACCER will be decommissioned from 31 December 2010. PACCER course material will be available on the procurement website (www.procurement.vic.gov.au) from 1 January 2011.

ProjectS and initiativeS in 2009-10tenders viC Continues to growThe tender website, Tenders VIC, underwent several system developments in 2009-10, adding greater functionality for users and making it the default choice for Victorian Government departments. Enhancements include supplier briefing meeting registrations, online forums, creation and management of panel contracts, making statistical reports and the ability to combine tender advertisements.

These improvements provide government and industry with a more sophisticated and secure tender facility. An effective tender system can improve the competitiveness of small to medium enterprises by substantially reducing the efforts required by industry to tender for government business.

improving the ContraCts publishing system The VGPB is committed to ongoing improvement of its contracts publishing system. Last year, the VGPB developed a number of improvements to system functionality, for example, better reporting capability in relation to disclosing contract variation details. The VGPB expects these improvements to be implemented in early 2010-11.

The VGPB continues to work on the stability and reliability of the system to ensure sufficient capacity to store contract details online.

managing exemptionsThe VGPB amended its exemption policy; Exemption from Seeking Multiple Quotes, Open or Selective Tendering (Limited Tendering) and ICT IP Default Position.

This policy recognises that an open approach to market is not always the optimal sourcing strategy. There are times when it may be more appropriate to approach a limited number of suppliers or a single supplier during the procurement process. The amended exemption policy covers exemptions from obtaining multiple quotes for purchases up to $150 000 and limited tendering procedures.

Exemption definitions were consolidated into two categories to increase understanding and reduce complexity in applying the policy. Each category is aligned with specific process approval requirements.

The policy was extended to include the circumstances in which departure from the information communications technology software intellectual property (IP) ownership position may apply. The default position with regard to IP for software created under contract allocates ownership to the software developer rather than the Victorian Government. This policy allows for exceptional circumstances in which government entities may need to own IP software created by software developers. For example, security considerations and situations where the government entity needs exclusive use of the software.

This policy was amended after extensive consultation with departments.

state purChase ContraCts poliCyThe VGPB reviewed the State Purchase Contracts (SPC) policy to simplify policy arrangements by changing the requirements for contract variations and SPC expenditure reporting, and separating whole-of-government purchasing arrangements from departmental contract arrangements.

The amended SPC policy now applies only to whole-of-government arrangements. The VGPB created a separate Sole Entity Purchase Contracts (SEPC) policy to replace a number of existing departmental contract arrangements previously covered under the SPC policy. This includes open state purchase contracts, departmental standing offer agreements and open standing offer agreements.

Both the SPC and SEPC policies allow for mandatory and non-mandatory arrangements and include variation requirements specific to each procurement policy. The policies are structured to ensure consistency in their application across departmental and whole-of-government arrangements.

variation proCess approval For one-oFF supply ContraCts The VGPB reviewed similar policy requirements for one-off supply contracts. Administrative and financial variations are now better defined to ensure correct and consistent application, and to clarify reporting processes for departmental accredited purchasing units and the VGPB.

key Strategic PrioritieS for 2010-11The VGPB recognises the importance of continuing its reform agenda to further enhance the integrity of government procurement. Strategic priorities for the coming year include:

developing proCurement Capability aCross government by liFting the FoCus on proCurement proFessionalismRaising the professional capabilities of procurement practitioners will be further championed by the VGPB in 2010-11 through its collaboration with the tertiary education sector and procurement education bodies including the Australasian Procurement and Construction Council and the Chartered Institute of Purchasing and Supply.

The Board will continue to implement its procurement training strategy, decommissioning PACCER and moving towards a system of more formal tertiary qualifications. This will give departments access to a range of accredited procurement modules, allowing them to build capability in line with their requirements.

enhanCing aCCess For small to medium business enterprises and the not-For-proFit seCtor to government purChasing opportunitiesThe VGPB recognises the importance of maximising local industry participation in government procurement. In 2010-11, the Board will examine and identify potential opportunities to increase the participation of local small to medium enterprises and the not-for-profit sector, ensuring fair, equitable and competitive access to government procurement opportunities.

about the vgpb



about the vgpb 7

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Chairman’s report

fUnctionSThe VGPB has the following functions as defined by section 54B of the Act:

a. in relation to the supply of goods and services to departments and the management and disposal of goods by departments–

(i) to develop, implement and review policies and practices; and

(ii) to provide advice, staff training and consultancy services;

b. to monitor departmental compliance with supply policies and Ministerial directions and to report irregularities to the relevant Minister, and the Minister for Finance;

c. to foster improvements in the use and application of purchasing systems and electronic trading;

d. to establish and maintain a comprehensive database of purchasing data of departments and supply markets for access by departments; and

e. any other functions conferred on the Board by this Part.

The VGPB was established under the Financial Management Act 1994 (hereafter referred to as the Act) and replaced the State Tender Board from 1 February 1995.

The VGPB currently has eight members and meets bi-monthly to develop and approve policies, approve major procurements from departments and discuss procurement policy and practice. Four of the VGPB members, including the Chairman, are external appointees. The other four are appointed from government departments.

The Board’s mission is to create a policy framework which achieves value for money in Victorian Government procurement, while maintaining the highest standards of probity, minimising risk and maximising opportunities for local businesses.

aPPreciationOn behalf of the VGPB, I would like to express my appreciation to the Hon. Tim Holding MP, Minister for Finance, WorkCover and the Transport Accident Commission for his continued leadership and support of the VGPB and its activities, especially his commitment to the highest standards of probity and value-for-money outcomes for Victoria.

I welcome our newest VGPB members, Mr Michael Beres and Mr Randall Straw and I express my appreciation for the dedication and excellent contribution of all VGPB members during this important period of procurement reform. I am grateful to those members who committed additional time to developing the new procurement framework in the reform subcommittee.

The VGPB’s appreciation also goes to departments and outer budget entities who contributed greatly to the development of the new procurement framework. There was a substantial consultation process during the year requiring a considerable time commitment from participants. The contribution from departments and others has significantly shaped the development of the new procurement model.

I would like to thank the Department of Treasury and Finance for their commitment to delivering a range of SPCs, for supporting procurement reform and for their ongoing support to the operation of the Board, through the VGPB Secretariat.

Finally, I would like to thank all of those involved in providing the PACCER training program over the past thirteen years. The program evolved continuously to meet the changing requirements of staff wanting to increase their procurement and contracting capability.

Rhonda O’Donnell Chairman, Victorian Government Purchasing Board

Continuing proCurement proCess reForm with approaChes to market based on improved strategiC planning and sound market analysisThe VGPB’s reform agenda intends to transition to a procurement governance framework focusing on capability and complexity, as initiated and developed in 2009-10. The VGPB proposes to transition government procurement from the current value-based accreditation system to align with the new framework.

In 2010-11, the VGPB will focus on improving procurement planning in government departments. Strategic procurement plans are helpful for government and the local economy; enhancing the strategic capabilities of procurement practitioners across government and increasing the quantity and quality of information provided to industry and the market regarding Victorian Government procurement strategies, trends and forecasts.

providing guidanCe to government in its appliCation oF loCal sourCing poliCies, Commonwealth and international trade agreements and soCial Commitments In 2010-11, the VGPB will examine the relationship between VGPB policies and the Victorian Government’s obligations under Commonwealth and international trade agreements. The aim of this review is to improve guidance to government departments to ensure fair and consistent application and to identify opportunities to promote a uniform application of procurement policy.

In 2010-11, the VGPB will focus on improving procurement planning in government departments. Strategic procurement plans are helpful for government and the local economy.

PowerSThe VGPB has the following powers under section 54C of the Act:

1. The Board has all the powers necessary to perform its functions.

2. Without limiting subsection (1), the Board may–

a. enter into contracts or arrangements on its own behalf, on behalf of the State or on behalf of departments;

b. call and award tenders and advertise;

c. consider and approve requisitions for the purchase of goods and services by departments;

d. require accountable officers to audit departmental compliance with supply policies and Ministerial directions and provide audit reports to the Board;

e. require accountable officers to provide information and data relating to the supply of goods and services and the management and disposal of goods;

f. exercise any other powers conferred on the Board by this Act or the regulations.

3 An accountable officer must provide to the Board on request:

a. audit reports referred to in subsection (2)(d); and

b. information and data referred to in subsection (2)(e).

about the vgpb



about the vgpb 7

Back to Contents



Back to Contents

Chairman’s report

fUnctionSThe VGPB has the following functions as defined by section 54B of the Act:

a. in relation to the supply of goods and services to departments and the management and disposal of goods by departments–

(i) to develop, implement and review policies and practices; and

(ii) to provide advice, staff training and consultancy services;

b. to monitor departmental compliance with supply policies and Ministerial directions and to report irregularities to the relevant Minister, and the Minister for Finance;

c. to foster improvements in the use and application of purchasing systems and electronic trading;

d. to establish and maintain a comprehensive database of purchasing data of departments and supply markets for access by departments; and

e. any other functions conferred on the Board by this Part.

The VGPB was established under the Financial Management Act 1994 (hereafter referred to as the Act) and replaced the State Tender Board from 1 February 1995.

The VGPB currently has eight members and meets bi-monthly to develop and approve policies, approve major procurements from departments and discuss procurement policy and practice. Four of the VGPB members, including the Chairman, are external appointees. The other four are appointed from government departments.


aPPreciationOn behalf of the VGPB, I would like to express my appreciation to the Hon. Tim Holding MP, Minister for Finance, WorkCover and the Transport Accident Commission for his continued leadership and support of the VGPB and its activities, especially his commitment to the highest standards of probity and value-for-money outcomes for Victoria.

I welcome our newest VGPB members, Mr Michael Beres and Mr Randall Straw and I express my appreciation for the dedication and excellent contribution of all VGPB members during this important period of procurement reform. I am grateful to those members who committed additional time to developing the new procurement framework in the reform subcommittee.

The VGPB’s appreciation also goes to departments and outer budget entities who contributed greatly to the development of the new procurement framework. There was a substantial consultation process during the year requiring a considerable time commitment from participants. The contribution from departments and others has significantly shaped the development of the new procurement model.

I would like to thank the Department of Treasury and Finance for their commitment to delivering a range of SPCs, for supporting procurement reform and for their ongoing support to the operation of the Board, through the VGPB Secretariat.

Finally, I would like to thank all of those involved in providing the PACCER training program over the past thirteen years. The program evolved continuously to meet the changing requirements of staff wanting to increase their procurement and contracting capability.

Rhonda O’Donnell Chairman, Victorian Government Purchasing Board

Continuing proCurement proCess reForm with approaChes to market based on improved strategiC planning and sound market analysisThe VGPB’s reform agenda intends to transition to a procurement governance framework focusing on capability and complexity, as initiated and developed in 2009-10. The VGPB proposes to transition government procurement from the current value-based accreditation system to align with the new framework.

In 2010-11, the VGPB will focus on improving procurement planning in government departments. Strategic procurement plans are helpful for government and the local economy; enhancing the strategic capabilities of procurement practitioners across government and increasing the quantity and quality of information provided to industry and the market regarding Victorian Government procurement strategies, trends and forecasts.

providing guidanCe to government in its appliCation oF loCal sourCing poliCies, Commonwealth and international trade agreements and soCial Commitments In 2010-11, the VGPB will examine the relationship between VGPB policies and the Victorian Government’s obligations under Commonwealth and international trade agreements. The aim of this review is to improve guidance to government departments to ensure fair and consistent application and to identify opportunities to promote a uniform application of procurement policy.

In 2010-11, the VGPB will focus on improving procurement planning in government departments. Strategic procurement plans are helpful for government and the local economy.

PowerSThe VGPB has the following powers under section 54C of the Act:

1. The Board has all the powers necessary to perform its functions.

2. Without limiting subsection (1), the Board may–

a. enter into contracts or arrangements on its own behalf, on behalf of the State or on behalf of departments;

b. call and award tenders and advertise;

c. consider and approve requisitions for the purchase of goods and services by departments;

d. require accountable officers to audit departmental compliance with supply policies and Ministerial directions and provide audit reports to the Board;

e. require accountable officers to provide information and data relating to the supply of goods and services and the management and disposal of goods;

f. exercise any other powers conferred on the Board by this Act or the regulations.

3 An accountable officer must provide to the Board on request:

a. audit reports referred to in subsection (2)(d); and

b. information and data referred to in subsection (2)(e).



about the vgpb 8 victorian



about the vgpb 9


dePartmental accreditation and ProceSS aPProvalThe delegation of the VGPB’s powers through the accreditation process requires departments to assume higher levels of accountability for purchasing and to establish an accredited purchasing unit (APU) to manage the process in compliance with VGPB policies.

The accreditation process delegates procurement approval authority to a department, allowing their APU to oversee the procurement process and to note, endorse or approve purchases up to an accreditation level agreed by the VGPB. Purchases above a department’s accreditation level are referred to the VGPB for approval. Tables 2 and 3 show the accreditation tiers and APU accreditation levels in 2009-10.

The VGPB and APUs assess purchases in line with the requirements of the Act and VGPB procurement policies. A department’s accountable officer can give the APU responsibility for developing internal processes in line with VGPB policy, taking into account factors such as the nature and complexity of procurement undertaken by the department.

ScoPe of vgPb PolicieSThe VGPB’s policies apply to the eleven government departments and a number of administrative offices as outlined in Table 1.

table 1: administrative oFFiCes bound by vgpb poliCies

Office of Police Integrity

Office of Public Prosecutions

Office of the Chief Commissioner of Police (Victoria Police)

Office of the Commissioner for Environmental Sustainability

Office of the Essential Services Commission

Office of the Legal Services Commissioner

Office of the Ombudsman

Office of the Privacy Commissioner

Office of the Special Investigations Monitor

Office of the Victorian Electoral Commission

State Services Authority

Victorian Auditor-General’s Office

For the purpose of reporting procurement activity by departments, administrative offices are defined as departments in accordance with the Act.

The VGPB monitors compliance with procurement policies through the annual supply report; a report completed at the end of each financial year by departments for the Board.

table 2: aCCreditation tiers

aCCreditation tier

purChase value limit

Tier 1 up to $1 million



Tier 4 unlimited

table 3: apu aCCreditation levels, 30 june 2010

aCCreditation level

Tier 1

Education and Early Childhood Development

Innovation, Industry and Regional Development

Planning and Community Development

Premier and Cabinet


Treasury and Finance

Victoria Police

Tier 2

Health

Human Services

Justice

Primary Industries

Sustainability and Environment

Transport

Policy frameworkThe VGPB policy framework is aligned with the three-stage procurement process. The three stages are procurement planning (business case development), market engagement and supplier selection, and contract management.

The policies within the three stages are managed within overarching policy requirements such as procurement principles that apply to all policies and the broader policy objectives of government.

rePorting relationSHiPThe VGPB reports to the Minister for Finance. The Government Services Division (GSD) within the Department of Treasury and Finance (DTF) provides secretariat and other support to the VGPB. GSD has a direct reporting line through DTF to the Minister for Finance on procurement and contracting issues. Figure 1 illustrates this relationship.

The VGPB delegates authority to departmental accountable officers to approve procurement processes up to each department’s level of accreditation. Departments are required to report to the VGPB each year on their procurement activities.

Figure 1: the vgpb reporting relationship

MINISTERS

DEPARTMENTAL SECRETARIES

ACCREDITED PURCHASING UNITSDepartmentsEducation and Early Childhood DevelopmentHealthHuman ServicesInnovation, Industry and Regional DevelopmentJusticePlanning and Community DevelopmentPremier and CabinetPrimary IndustriesSustainability and EnvironmentTransportTreasury and Finance

Administrative OfficesOffice of the Chief Commissioner of Police (Victoria Police)State Services Authority

Other administrative offices operate through theirhost department


SECRETARYDepartment of Treasury

and Finance

DEPUTY SECRETARYGovernment Services Division

DIRECTORStrategy and Policy

Government Services Division

MINISTER FOR FINANCE







about the vgpb 9


dePartmental accreditation and ProceSS aPProvalThe delegation of the VGPB’s powers through the accreditation process requires departments to assume higher levels of accountability for purchasing and to establish an accredited purchasing unit (APU) to manage the process in compliance with VGPB policies.

The accreditation process delegates procurement approval authority to a department, allowing their APU to oversee the procurement process and to note, endorse or approve purchases up to an accreditation level agreed by the VGPB. Purchases above a department’s accreditation level are referred to the VGPB for approval. Tables 2 and 3 show the accreditation tiers and APU accreditation levels in 2009-10.

The VGPB and APUs assess purchases in line with the requirements of the Act and VGPB procurement policies. A department’s accountable officer can give the APU responsibility for developing internal processes in line with VGPB policy, taking into account factors such as the nature and complexity of procurement undertaken by the department.

ScoPe of vgPb PolicieSThe VGPB’s policies apply to the eleven government departments and a number of administrative offices as outlined in Table 1.

table 1: administrative oFFiCes bound by vgpb poliCies

Office of Police Integrity

Office of Public Prosecutions

Office of the Chief Commissioner of Police (Victoria Police)

Office of the Commissioner for Environmental Sustainability

Office of the Essential Services Commission

Office of the Legal Services Commissioner

Office of the Ombudsman

Office of the Privacy Commissioner

Office of the Special Investigations Monitor

Office of the Victorian Electoral Commission


Victorian Auditor-General’s Office

For the purpose of reporting procurement activity by departments, administrative offices are defined as departments in accordance with the Act.


table 2: aCCreditation tiers

aCCreditation tier

purChase value limit




Tier 4 unlimited

table 3: apu aCCreditation levels, 30 june 2010

aCCreditation level

Tier 1




Premier and Cabinet



Victoria Police

Tier 2

Health

Human Services

Justice

Primary Industries


Transport

Policy frameworkThe VGPB policy framework is aligned with the three-stage procurement process. The three stages are procurement planning (business case development), market engagement and supplier selection, and contract management.

The policies within the three stages are managed within overarching policy requirements such as procurement principles that apply to all policies and the broader policy objectives of government.

rePorting relationSHiPThe VGPB reports to the Minister for Finance. The Government Services Division (GSD) within the Department of Treasury and Finance (DTF) provides secretariat and other support to the VGPB. GSD has a direct reporting line through DTF to the Minister for Finance on procurement and contracting issues. Figure 1 illustrates this relationship.

The VGPB delegates authority to departmental accountable officers to approve procurement processes up to each department’s level of accreditation. Departments are required to report to the VGPB each year on their procurement activities.

Figure 1: the vgpb reporting relationship

MINISTERS

DEPARTMENTAL SECRETARIES

ACCREDITED PURCHASING UNITSDepartmentsEducation and Early Childhood DevelopmentHealthHuman ServicesInnovation, Industry and Regional DevelopmentJusticePlanning and Community DevelopmentPremier and CabinetPrimary IndustriesSustainability and EnvironmentTransportTreasury and Finance

Administrative OfficesOffice of the Chief Commissioner of Police (Victoria Police)State Services Authority

Other administrative offices operate through theirhost department


SECRETARYDepartment of Treasury

and Finance

DEPUTY SECRETARYGovernment Services Division

DIRECTORStrategy and Policy

Government Services Division

MINISTER FOR FINANCE


board members

board members






about the vgpb 11


mariSa de cicco Ms De Cicco is the director of justice policy at the Department of Justice. She has experience in policy advice and development, formulation of strategy and legislation, procurement and contracting.

meetingS attended: 5 (eligible to attend: 6)

aPPointed 1 october 2003

alan Hall Mr Hall is currently the executive director of Corporate Services in the Department of Human Services. He has extensive experience in the public sector in the design and delivery of a range of human service programs as well as corporate functions and major project implementation.



SUe jaqUinot Ms Jaquinot is deputy secretary of the Community Development Group in the Department of Planning and Community Development. She has extensive experience in the public sector operating at senior executive levels. Her work focuses on strategic organisational development, major change management programs and service delivery to deliver on government’s key policy directions.



randall Straw Mr Straw is currently deputy secretary for Innovation and Technology/Industry and Trade at the Department of Innovation, Industry and Regional Development. He has an extensive background in technology innovation, policy, planning and implementation with Victorian public sector agencies.



rHonda o’donnell Ms O’Donnell has extensive experience in the private sector, in particular within the technology industry and in leading companies with operations in Australia and Asia. She specialises in business strategy and development, innovation and service management, international relations and managing organisational change.


aPPointed 27 aPril 2005

cHairman Since 1 october 2007

Ms O’Donnell was also a member of the subcommittee overseeing procurement reform. Ms O’Donnell attended five of the six subcommittee meetings held in 2009-10.

micHael bereS Mr Beres is currently national business manager for Good Shepherd Australia and New Zealand. He has extensive experience managing shared services functions and business operations in not-for-profit corporate, university, local government and small to medium business enterprise environments.



anne dalton Ms Dalton holds a number of state government board appointments, and is currently the chancellor of RMIT University. She has been a lawyer for over 20 years, working in the areas of corporate advice/litigation and government law and has extensive experience advising private and public sector clients. Anne has expertise in public administration, corporate governance and probity and provides consultancy services in those areas.



Ms Dalton was also a member of the subcommitee overseeing procurement reform. Ms Dalton attended four of the six subcommitee meetings held in 2009-10.

mike Scrafton Mr Scrafton has over twenty years experience in senior management and policy roles in the federal and state public services. He currently provides consultancy services in strategic policy, executive development and ethics.


aPPointed 1 janUary 2009

Mr Scrafton was also a member of the subcommitee overseeing procurement reform. Mr Scrafton attended five of the six subcommitee meetings held in 2009-10.

external appointees

government appointees


Chairman

board members

board members






about the vgpb 11


mariSa de cicco Ms De Cicco is the director of justice policy at the Department of Justice. She has experience in policy advice and development, formulation of strategy and legislation, procurement and contracting.



alan Hall Mr Hall is currently the executive director of Corporate Services in the Department of Human Services. He has extensive experience in the public sector in the design and delivery of a range of human service programs as well as corporate functions and major project implementation.



SUe jaqUinot Ms Jaquinot is deputy secretary of the Community Development Group in the Department of Planning and Community Development. She has extensive experience in the public sector operating at senior executive levels. Her work focuses on strategic organisational development, major change management programs and service delivery to deliver on government’s key policy directions.



randall Straw Mr Straw is currently deputy secretary for Innovation and Technology/Industry and Trade at the Department of Innovation, Industry and Regional Development. He has an extensive background in technology innovation, policy, planning and implementation with Victorian public sector agencies.



rHonda o’donnell Ms O’Donnell has extensive experience in the private sector, in particular within the technology industry and in leading companies with operations in Australia and Asia. She specialises in business strategy and development, innovation and service management, international relations and managing organisational change.



cHairman Since 1 october 2007

Ms O’Donnell was also a member of the subcommittee overseeing procurement reform. Ms O’Donnell attended five of the six subcommittee meetings held in 2009-10.

micHael bereS Mr Beres is currently national business manager for Good Shepherd Australia and New Zealand. He has extensive experience managing shared services functions and business operations in not-for-profit corporate, university, local government and small to medium business enterprise environments.



anne dalton Ms Dalton holds a number of state government board appointments, and is currently the chancellor of RMIT University. She has been a lawyer for over 20 years, working in the areas of corporate advice/litigation and government law and has extensive experience advising private and public sector clients. Anne has expertise in public administration, corporate governance and probity and provides consultancy services in those areas.



Ms Dalton was also a member of the subcommitee overseeing procurement reform. Ms Dalton attended four of the six subcommitee meetings held in 2009-10.

mike Scrafton Mr Scrafton has over twenty years experience in senior management and policy roles in the federal and state public services. He currently provides consultancy services in strategic policy, executive development and ethics.


aPPointed 1 janUary 2009

Mr Scrafton was also a member of the subcommitee overseeing procurement reform. Mr Scrafton attended five of the six subcommitee meetings held in 2009-10.

external appointees

government appointees


Chairman

proCurement aCtivity in 2009-10

SUmmary of one-off SUPPly aPProvalSroutine proCurement approvalsThis section provides an overview of contracts and agreements relating to one-off supply and contract variations for goods and services approved in the financial year 2009-10.

One-off supply approvals and value relate to the approval of the procurement process (to enter into a contractual arrangement with the selected supplier or suppliers). Actual expenditure occurs later and may occur over a number of financial years, depending on the nature of the contract.

overview oF one-oFF supply approvals by proCurement proCessIn 2009-10, there were 589 procurement process approvals valued at $1 111.8 million.

The average number of procurement process approvals over the past five years is 730, valued at $1 651.1 million.

Table 5 provides an overview of one-off supply approvals by number and value of procurement process compared with the five-year average.

table 5: number and value oF one-oFF supply approvals by proCurement proCess in 2009-10 Compared with the Five-year average

2009-10 Five-year average

number value ($ million)


Public tender 268 $618.8 269 $983.8

Exemption from public tender

31 $18.4 46 $35.6

Exemption from public tender and three quotes

129 $101.3 139 $160.8

Variations 161 $373.3 276 $471.0

Totals 589 $1 111.8 730 $1 651.1








ProcUrement rePortingThe annual supply reports provided by departmental APUs at the end of each financial year report on contracts above the $150 000 public tender threshold, as well as financial contract variations below this threshold. Contracts may have been approved by the APU or the VGPB (or both), depending on the value of the contract and the department’s accreditation level.

The public tender threshold increased from $102 500 to $150 000 in 2008, as shown in Table 4. This should be taken into account when making five year comparisons.

table 4: Changes to the publiC tender threshold From 2005 to 2010

FinanCial year tender threshold

2005-2008 $102 500

2008-2010 $150 000

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. This applies to all figures in the annual report.

This section provides information about departmental procurement activity for goods and services in the 2009-10 financial year. It includes:

One-off supply (based on fixed values) • Routine procurement approvals• Exceptional procurement approvals• Critical incident procurement approvals

Standing offer agreements (based on estimated values) • State purchase contracts• Open state purchase contracts • Departmental standing offer agreements • Open standing offer agreements

Strategic procurement plans (based on planned estimated values)

Departmental procurement activities

Departmental compliance with VGPB policies

Accredited purchasing unit (APU) activities

In 2009-10, there were 589 procurement process approvals valued at $1 111.8 million. The average number of procurement process approvals over the past five years is 730, valued at $1 651.1 million.


SUmmary of one-off SUPPly aPProvalSroutine proCurement approvalsThis section provides an overview of contracts and agreements relating to one-off supply and contract variations for goods and services approved in the financial year 2009-10.

One-off supply approvals and value relate to the approval of the procurement process (to enter into a contractual arrangement with the selected supplier or suppliers). Actual expenditure occurs later and may occur over a number of financial years, depending on the nature of the contract.

overview oF one-oFF supply approvals by proCurement proCessIn 2009-10, there were 589 procurement process approvals valued at $1 111.8 million.

The average number of procurement process approvals over the past five years is 730, valued at $1 651.1 million.

Table 5 provides an overview of one-off supply approvals by number and value of procurement process compared with the five-year average.

table 5: number and value oF one-oFF supply approvals by proCurement proCess in 2009-10 Compared with the Five-year average




Public tender 268 $618.8 269 $983.8


31 $18.4 46 $35.6


129 $101.3 139 $160.8

Variations 161 $373.3 276 $471.0

Totals 589 $1 111.8 730 $1 651.1








ProcUrement rePortingThe annual supply reports provided by departmental APUs at the end of each financial year report on contracts above the $150 000 public tender threshold, as well as financial contract variations below this threshold. Contracts may have been approved by the APU or the VGPB (or both), depending on the value of the contract and the department’s accreditation level.

The public tender threshold increased from $102 500 to $150 000 in 2008, as shown in Table 4. This should be taken into account when making five year comparisons.

table 4: Changes to the publiC tender threshold From 2005 to 2010

FinanCial year tender threshold

2005-2008 $102 500

2008-2010 $150 000

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. This applies to all figures in the annual report.

This section provides information about departmental procurement activity for goods and services in the 2009-10 financial year. It includes:

One-off supply (based on fixed values) • Routine procurement approvals• Exceptional procurement approvals• Critical incident procurement approvals

Standing offer agreements (based on estimated values) • State purchase contracts• Open state purchase contracts • Departmental standing offer agreements • Open standing offer agreements

Strategic procurement plans (based on planned estimated values)

Departmental procurement activities

Departmental compliance with VGPB policies

Accredited purchasing unit (APU) activities

In 2009-10, there were 589 procurement process approvals valued at $1 111.8 million. The average number of procurement process approvals over the past five years is 730, valued at $1 651.1 million.

trends in one-oFF supply approvals by proCurement proCessThere has been a downward trend in the value of one-off supply approvals over the past five years. This could be expected with the increasing focus on more strategic procurement arrangements such as standing offer agreements.

Over the past five years, the number of public tenders has remained stable and the value has decreased. When looking at the five-year trend, exemptions from public tender (including exemptions from public tender and three quotes) have decreased slightly in number and more substantially in value. In 2009-10 there were 160 exemptions valued at $119.7 million compared with the five-year average of 185 valued at $196.4 million. The number of variations decreased substantially in 2009-10, with the value staying fairly consistent over the past five years.

Tables 6 to 8 and Figures 2 to 4 summarise the procurement process approvals for 2009-10 compared with the previous four financial years.

table 6: value oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender $1 514.3 $886.1 $1 348.5 $551.1 $618.8


$49.7 $42.8 $10.6 $56.3 $18.4


$163.6 $283.2 $137.2 $118.8 $101.3

Variations $197.5 $1125.1 $371.2 $287.9 $373.3

Totals ($ million) $1 925.1 $2 337.21 $1 867.52 $1 014.23 $1 111.84

Figure 2: value oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 2: Value of total one-off supply approvals by procurementprocess from 2005-06 to 2009-10

500

2009-104

2005-06

2006-071

2007-082

2008-093

0$ MILLION 1 000 1 500 2 000 2 500

Public tender


Variations


1 Includes 2006-07 extraordinary requisition ($800 million for the WoVG fleet contracts extensions, under the variations category)

2 Excludes 2007-08 extraordinary requisitions ($5 661 million for the metropolitan bus services, interim train rolling stock and interim school bus services)

3 Excludes 2008-09 exceptional procurement ($570.8 million) and critical incident procurement ($92.7 million)

4 Excludes 2009-10 exceptional procurement ($9.5 billion) and critical incident procurement ($29.4 million)

table 7: number oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender 280 232 298 265 268


59 55 36 51 31


158 165 158 84 129

Variations 302 279 309 329 161

Totals (number) 799 731 801 729 589

Figure 3: number oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 3: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10

200

2009-10

2005-06

2006-07

2007-08

2008-09

0NUMBER 400 600 800 1 000

Public tender


Variations









trends in one-oFF supply approvals by proCurement proCessThere has been a downward trend in the value of one-off supply approvals over the past five years. This could be expected with the increasing focus on more strategic procurement arrangements such as standing offer agreements.

Over the past five years, the number of public tenders has remained stable and the value has decreased. When looking at the five-year trend, exemptions from public tender (including exemptions from public tender and three quotes) have decreased slightly in number and more substantially in value. In 2009-10 there were 160 exemptions valued at $119.7 million compared with the five-year average of 185 valued at $196.4 million. The number of variations decreased substantially in 2009-10, with the value staying fairly consistent over the past five years.

Tables 6 to 8 and Figures 2 to 4 summarise the procurement process approvals for 2009-10 compared with the previous four financial years.

table 6: value oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender $1 514.3 $886.1 $1 348.5 $551.1 $618.8


$49.7 $42.8 $10.6 $56.3 $18.4


$163.6 $283.2 $137.2 $118.8 $101.3

Variations $197.5 $1125.1 $371.2 $287.9 $373.3

Totals ($ million) $1 925.1 $2 337.21 $1 867.52 $1 014.23 $1 111.84

Figure 2: value oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 2: Value of total one-off supply approvals by procurementprocess from 2005-06 to 2009-10

500

2009-104

2005-06

2006-071

2007-082

2008-093

0$ MILLION 1 000 1 500 2 000 2 500

Public tender


Variations






table 7: number oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender 280 232 298 265 268


59 55 36 51 31


158 165 158 84 129

Variations 302 279 309 329 161

Totals (number) 799 731 801 729 589

Figure 3: number oF total one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 3: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10

200

2009-10

2005-06

2006-07

2007-08

2008-09

0NUMBER 400 600 800 1 000

Public tender


Variations









table 8: average value ($ million) oF one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender $5.4 $3.8 $4.5 $2.1 $2.3


$0.8 $0.8 $0.3 $1.1 $0.6


$1.0 $1.7 $0.9 $1.4# $0.8

Variations $0.7 $4.01 $1.2 $0.9 $2.3

All one-off supply approvals

$2.4 $3.2 $2.3 $1.4 $1.9

# The average value of all one-off supplies in 2008-09 was reported last year as $2.2 million as the figures included exceptional procurement. The figures have been amended in this year’s report to exclude exceptional procurement, hence the difference in reporting.

Figure 4: average value oF one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 4: Average value of one-off supply approvals byprocurement process from 2005-06 to 2009-10

2

2009-10

2005-06

2006-071

2007-08

2008-09

0$ MILLION 4 6 8 1210

Public tender


Variations



overview oF one-oFF supply approvals by goods and serviCesIn 2009-10, there were 80 process approvals for goods valued at $84.8 million, 344 process approvals for services valued at $652.3 million, and four process approvals for consultants valued at $1.3 million. There were 161 variations valued at $373.3 million.

Table 9 provides an overview of procurement process approvals by number and value of category compared with the five-year average. Table 10 provides a breakdown of variations by goods, services and consultancies.

table 9: number and value oF one-oFF supply approvals by goods and serviCes in 2009-10 Compared with the Five-year average




Goods 80 $84.8 81 $290.5

Services 344 $652.3 355 $884.2

Consultancies 4 $1.3 17 $5.5

Variations 161 $373.3 276 $471.01

Totals 589 $1 111.8 730 $1 651.1


table 10: breakdown oF variations into goods, serviCes and ConsultanCies in 2009-10

2009-10


Goods 16 $187.1

Services 145 $186.2

Consultancies 0 $0.0

Totals 161 $373.3








table 8: average value ($ million) oF one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

proCurement proCess

2005-06 2006-07 2007-08 2008-09 2009-10

Public tender $5.4 $3.8 $4.5 $2.1 $2.3


$0.8 $0.8 $0.3 $1.1 $0.6


$1.0 $1.7 $0.9 $1.4# $0.8

Variations $0.7 $4.01 $1.2 $0.9 $2.3


$2.4 $3.2 $2.3 $1.4 $1.9

# The average value of all one-off supplies in 2008-09 was reported last year as $2.2 million as the figures included exceptional procurement. The figures have been amended in this year’s report to exclude exceptional procurement, hence the difference in reporting.

Figure 4: average value oF one-oFF supply approvals by proCurement proCess From 2005-06 to 2009-10

Figure 4: Average value of one-off supply approvals byprocurement process from 2005-06 to 2009-10

2

2009-10

2005-06

2006-071

2007-08

2008-09

0$ MILLION 4 6 8 1210

Public tender


Variations



overview oF one-oFF supply approvals by goods and serviCesIn 2009-10, there were 80 process approvals for goods valued at $84.8 million, 344 process approvals for services valued at $652.3 million, and four process approvals for consultants valued at $1.3 million. There were 161 variations valued at $373.3 million.

Table 9 provides an overview of procurement process approvals by number and value of category compared with the five-year average. Table 10 provides a breakdown of variations by goods, services and consultancies.

table 9: number and value oF one-oFF supply approvals by goods and serviCes in 2009-10 Compared with the Five-year average




Goods 80 $84.8 81 $290.5

Services 344 $652.3 355 $884.2

Consultancies 4 $1.3 17 $5.5

Variations 161 $373.3 276 $471.01

Totals 589 $1 111.8 730 $1 651.1


table 10: breakdown oF variations into goods, serviCes and ConsultanCies in 2009-10

2009-10


Goods 16 $187.1

Services 145 $186.2


Totals 161 $373.3








trends in one-oFF supply approvals by goods and serviCes The number and value of goods and services is at the lower end of the five-year trend. This could be expected with the increasing focus on more strategic procurement arrangements such as standing offer agreements.

Most one-off supply approvals were in the $150 000 to $500 000 range, accounting for 46 per cent of the total number. Only a small number of one-off supply approvals exceeded $10 million, i.e. three per cent of the total number.

Goods in 2009-10 accounted for fourteen per cent of the total number of one-off supply approvals, and seven per cent of the total value of one-off supply approvals; this compared with seven per cent of the total number and 24 per cent of the total value of one-off supply approvals in 2008-09.

Services in 2009-10 accounted for the highest numbers and value of one-off supply approvals: 58 per cent and 60 per cent respectively. The total number of services increased by three per cent (333 in 2008-09 and 344 in 2009-10), while the total value increased by 37 per cent (from $474.5 million in 2008-09 to $652.3 million in 2009-10).

Consultancies in 2009-10 accounted for one per cent of the total number and 0.1 per cent of the total value of all one-off supply approvals. The total number of consultancies declined by 76 per cent from 17 in 2008-09 to four in 2009-10. Their total value decreased by 86 per cent (from $9.3 million in 2008-09 to $1.3 million in 2009-10).

Variations in 2009-10 accounted for 27 per cent of the total number of all one-off supply approvals and 32 per cent of the total value of one-off supply approvals. This is a decrease of 51 per cent in the total number of variations from 329 in 2008-09 to 161 in 2009-10.

Tables 11 to 13 and Figures 5 to 6 provide a breakdown of procurement process approvals by number and value of category (goods, services, consultancies and variations).

table 11: value oF total one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

2005-06 2006-07 2007-08 2008-09 2009-10

Goods $224.4 $366.1 $534.7 $242.4 $84.8

Services $1 497.9 $840.0 $956.2 $474.5 $652.3

Consultancies $5.3 $6.0 $5.4 $9.3 $1.3

Variations $197.5 $1125.1 $371.2 $287.9 $373.3

Totals ($ million) $1 925.1 $2 337.21 $1 867.52 $1 014.23 $1 111.84

Figure 5: value oF total one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

500 1 000 1 500 2 000 2 500

Figure 5: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10

2005-06

2006-071

2007-082

2008-093

2009-104

0$ MILLION

Goods

Services

Variations

Consultancies





table 12: number and value ranges oF one-oFF supply approvals by goods and serviCes in 2009-10

$0 - $150 000 $150 001 - $500 000

$500 001 - $1 million

$1 million - $10 million

> $10 million

Goods - 36 27 17 0

Services - 163 107 64 10

Consultancies - 3 1 0 0

Variations 38 67 22 30 4

Totals ($ million) 38 269 157 111 14

Note: departments do not report on one-off supply approvals below the $150 000 public tender threshold

table 13: number oF one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

2005-06 2006-07 2007-08 2008-09 2009-10

Goods 95 87 93 50 80

Services 380 342 378 333 344

Consultancies 22 23 21 17 4

Variations 302 279 309 329 161

Totals (number) 799 731 801 729 589

Figure 6: number oF total one-oFF supply approvals by Category From 2005-06 to 2009-10

200 400 600 800 1 000

Figure 6: Number of total one-off supply approvals by category from 2005-06 to 2009-10

2005-06

2006-07

2007-08

2008-09

2009-10

0NUMBER

Goods

Services

Variations

Consultancies








trends in one-oFF supply approvals by goods and serviCes The number and value of goods and services is at the lower end of the five-year trend. This could be expected with the increasing focus on more strategic procurement arrangements such as standing offer agreements.

Most one-off supply approvals were in the $150 000 to $500 000 range, accounting for 46 per cent of the total number. Only a small number of one-off supply approvals exceeded $10 million, i.e. three per cent of the total number.

Goods in 2009-10 accounted for fourteen per cent of the total number of one-off supply approvals, and seven per cent of the total value of one-off supply approvals; this compared with seven per cent of the total number and 24 per cent of the total value of one-off supply approvals in 2008-09.

Services in 2009-10 accounted for the highest numbers and value of one-off supply approvals: 58 per cent and 60 per cent respectively. The total number of services increased by three per cent (333 in 2008-09 and 344 in 2009-10), while the total value increased by 37 per cent (from $474.5 million in 2008-09 to $652.3 million in 2009-10).

Consultancies in 2009-10 accounted for one per cent of the total number and 0.1 per cent of the total value of all one-off supply approvals. The total number of consultancies declined by 76 per cent from 17 in 2008-09 to four in 2009-10. Their total value decreased by 86 per cent (from $9.3 million in 2008-09 to $1.3 million in 2009-10).

Variations in 2009-10 accounted for 27 per cent of the total number of all one-off supply approvals and 32 per cent of the total value of one-off supply approvals. This is a decrease of 51 per cent in the total number of variations from 329 in 2008-09 to 161 in 2009-10.

Tables 11 to 13 and Figures 5 to 6 provide a breakdown of procurement process approvals by number and value of category (goods, services, consultancies and variations).

table 11: value oF total one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

2005-06 2006-07 2007-08 2008-09 2009-10

Goods $224.4 $366.1 $534.7 $242.4 $84.8

Services $1 497.9 $840.0 $956.2 $474.5 $652.3

Consultancies $5.3 $6.0 $5.4 $9.3 $1.3

Variations $197.5 $1125.1 $371.2 $287.9 $373.3

Totals ($ million) $1 925.1 $2 337.21 $1 867.52 $1 014.23 $1 111.84

Figure 5: value oF total one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

500 1 000 1 500 2 000 2 500

Figure 5: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10

2005-06

2006-071

2007-082

2008-093

2009-104

0$ MILLION

Goods

Services

Variations

Consultancies





table 12: number and value ranges oF one-oFF supply approvals by goods and serviCes in 2009-10

$0 - $150 000 $150 001 - $500 000

$500 001 - $1 million

$1 million - $10 million

> $10 million

Goods - 36 27 17 0

Services - 163 107 64 10

Consultancies - 3 1 0 0

Variations 38 67 22 30 4

Totals ($ million) 38 269 157 111 14

Note: departments do not report on one-off supply approvals below the $150 000 public tender threshold

table 13: number oF one-oFF supply approvals by goods and serviCes From 2005-06 to 2009-10

2005-06 2006-07 2007-08 2008-09 2009-10

Goods 95 87 93 50 80

Services 380 342 378 333 344

Consultancies 22 23 21 17 4

Variations 302 279 309 329 161

Totals (number) 799 731 801 729 589

Figure 6: number oF total one-oFF supply approvals by Category From 2005-06 to 2009-10

200 400 600 800 1 000

Figure 6: Number of total one-off supply approvals by category from 2005-06 to 2009-10

2005-06

2006-07

2007-08

2008-09

2009-10

0NUMBER

Goods

Services

Variations

Consultancies








exCeptional proCurement approvalsDepartments report separately on exceptional procurement so that underlying trends in routine government procurement can be clearly identified.

Exceptional procurement includes high value procurement projects which support a major industry or economic initiative of the Government. In general, it includes initiatives announced by Government prior to the commencement of the procurement process. It may also include initiatives within the National Reform Agenda and may relate to a specific project approved by Cabinet.

In 2009-10, there were seven exceptional procurement projects valued at $9 472.1 million, as detailed in Table 14.

In 2008-09, four items valued at $570.8 million were reported by the Department of Transport.

table 14: exCeptional proCurement approvals in 2009-10

department number value ($ million)

title/desCription tender type

Transport 7 $146.3 Country and regional urban bus services - interim contracts

Ex & 3Q

$1 200.0 Country and regional urban bus services contracts

Ex & 3Q

$146.3 Country and regional urban bus services - interim agreements

Ex & 3Q

$180.8 Free country school bus services - tendered contract stream

Public tender

$801.4 Melbourne metropolitan tram franchise

Public tender

$2 117.2 Free country school bus services - negotiated contract stream

Ex & 3Q

$4 880.1 Melbourne metropolitan train franchise

Public tender

Totals 7 $9 472.1

Ex & 3Q = Exemption from public tender and three quotes

The country and regional urban bus contract is a Cabinet-endorsed initiative to achieve the Government’s public transport objectives for country and regional Victoria in the short and medium term. The free country school bus services contract is an initiative under the Victorian Transport Plan that aims to provide efficient delivery of school bus services throughout regional Victoria.

CritiCal inCident proCurement approvalsThe critical incident procurement (CIP) policy establishes an alternative procurement process to operate during a critical incident and in relation to any subsequent relief effort. The processes under this policy aim to accommodate urgent procurement needs, while ensuring that the procurement process adopted is reasonable and conducted with appropriate consideration of good practice purchasing principles.

Table 15 provides an overview of procurement carried out under CIP policy in 2009-10.

table 15: number and value oF CritiCal inCident proCurement approvals by goods and serviCes in 2009-10


Goods 1 $0.3

Services 3 $3.4


Variations 1 $25.7

Total 5 $29.4

The Department of Health carried out one procurement in 2009-10 under CIP policy valued at $0.3 million. This was related to the H1N1 pandemic in 2009.

The remaining procurements listed in Table 15 relate to contracts activated in the previous financial year but processed by the Department of Premier and Cabinet (DPC) APU in 2009-10. These CIPs relate to 2009 Victorian bushfire activities, for example, management of the storage and distribution of goods donated to bushfire-affected communities.

In 2008-09, DPC contracted for major clean-up services to a value of $74 million. The variation listed above in Table 15 is for additional clean-up to a value of $25.7 million. The services covered the continued clean-up of buildings destroyed by the bushfires (subject to the voluntary registration by property owners), as well as provision of temporary toilets, showers and building advisory services for those affected by the bushfires.








exCeptional proCurement approvalsDepartments report separately on exceptional procurement so that underlying trends in routine government procurement can be clearly identified.


In 2009-10, there were seven exceptional procurement projects valued at $9 472.1 million, as detailed in Table 14.

In 2008-09, four items valued at $570.8 million were reported by the Department of Transport.

table 14: exCeptional proCurement approvals in 2009-10

department number value ($ million)

title/desCription tender type

Transport 7 $146.3 Country and regional urban bus services - interim contracts

Ex & 3Q

$1 200.0 Country and regional urban bus services contracts

Ex & 3Q

$146.3 Country and regional urban bus services - interim agreements

Ex & 3Q

$180.8 Free country school bus services - tendered contract stream

Public tender

$801.4 Melbourne metropolitan tram franchise

Public tender

$2 117.2 Free country school bus services - negotiated contract stream

Ex & 3Q

$4 880.1 Melbourne metropolitan train franchise

Public tender

Totals 7 $9 472.1


The country and regional urban bus contract is a Cabinet-endorsed initiative to achieve the Government’s public transport objectives for country and regional Victoria in the short and medium term. The free country school bus services contract is an initiative under the Victorian Transport Plan that aims to provide efficient delivery of school bus services throughout regional Victoria.

CritiCal inCident proCurement approvalsThe critical incident procurement (CIP) policy establishes an alternative procurement process to operate during a critical incident and in relation to any subsequent relief effort. The processes under this policy aim to accommodate urgent procurement needs, while ensuring that the procurement process adopted is reasonable and conducted with appropriate consideration of good practice purchasing principles.

Table 15 provides an overview of procurement carried out under CIP policy in 2009-10.

table 15: number and value oF CritiCal inCident proCurement approvals by goods and serviCes in 2009-10


Goods 1 $0.3

Services 3 $3.4


Variations 1 $25.7

Total 5 $29.4

The Department of Health carried out one procurement in 2009-10 under CIP policy valued at $0.3 million. This was related to the H1N1 pandemic in 2009.

The remaining procurements listed in Table 15 relate to contracts activated in the previous financial year but processed by the Department of Premier and Cabinet (DPC) APU in 2009-10. These CIPs relate to 2009 Victorian bushfire activities, for example, management of the storage and distribution of goods donated to bushfire-affected communities.

In 2008-09, DPC contracted for major clean-up services to a value of $74 million. The variation listed above in Table 15 is for additional clean-up to a value of $25.7 million. The services covered the continued clean-up of buildings destroyed by the bushfires (subject to the voluntary registration by property owners), as well as provision of temporary toilets, showers and building advisory services for those affected by the bushfires.








Standing offer agreementS This section provides an overview of the number and estimated potential value of all standing offer agreements (SOA) by type approved in 2009-10. SOAs include state purchase contracts (SPCs), departmental standing offer agreements (DSOAs), open standing offer agreements (OSOAs), open state purchase contracts (OSPCs) and software licensing enterprise agreements (SLEAs). There were no SLEAs reported in 2009-10.

The values in the tables are estimates, and the expenditure occurs over a number of years, as detailed in the contract term and option to extend columns.

state purChase ContraCtsState purchase contracts (SPCs) are standing offer agreements for common use goods and services, which are established when value for money can be best achieved through aggregating demand across departments and other government entities.

SPCs can involve arrangements with one or more suppliers for a set period of time (usually three to five years), incorporate a schedule of rates and performance levels, and usually require no obligation on the State to purchase a particular quantity of the goods or services. SPCs can be used by all government agencies as well as departments, provided that they commit to the requirements of the agreement.

SPCs can be structured as sole or multiple suppliers (multiple suppliers constitute a panel arrangement), or open or closed panels (where open panels are able to accept new suppliers at set or other times during the contract period, whereas closed panels are restricted to the suppliers engaged at the commencement of the contract).

In 2009-10, eight SPCs were approved with a total value of $507.3 million, as detailed in Table 16.

table 16: number and estimated potential value oF spCs approved in 2009-10

department number total estimated

value ($ million)

title/desCription

ContraCt term

(years)

option to extend (years)

tender type


8 $15.0 National emergency warning system

4 1 Exemption from public tender

$45.0 Travel services 3 2 x 1 year options

Public tender

$54.0 Marketing services panel

3 2 x 1 year options

Public tender

$335.0 Fuel and associated products


Public tender

$0.3 Fringe benefits tax software

5 Nil Public tender

$2.0 Financial assessment services

3 Nil Public tender

$16.0 Motor vehicle and fleet disposal services


Public tender

$40.0 Print management services

4 1 x 1 year option

Public tender

Total 8 $507.3

open state purChase ContraCts An open state purchase contract (OSPC) refers to a contract established by one department that other departments with a similar need can access. It is similar to an SPC arrangement, but is not mandatory for those departments that have not committed to it.

On 17 June 2010, DSOAs were superseded by sole entity purchase contracts (SEPC).

In 2009-10, one OSPC was approved with a total value of $37.7 million as detailed in Table 17.

table 17: number and estimated potential value oF ospCs approved in 2009-10


value ($ million)

title/desCription ContraCt term

(years)


tender type

Justice 1 $37.7 Provision of essential safety measures programmed maintenance, management services and compliance service in the owned buildings of the Department of Justice

3 3 Public tender

Total 1 $37.3

departmental standing oFFer agreements Departmental standing offer agreements (DSOAs) are a strategic approach to procuring common use goods and services used exclusively by one department. These long-term agreements have benefits to the department such as:

– ∑using the aggregated purchasing power of the department to negotiate lower prices and better service; and

– ∑reducing the administrative burden for end users in preparing specifications, requesting quotations and tenders, and evaluating offers for similar purchases.

Greater use of DSOAs is seen by suppliers as an alternative to supplying the same information at significant time and cost, for multiple rounds of offers for requirements which are substantially the same.

On 17 June 2010, DSOAs were superseded by SEPCs.

In 2009-10, 50 DSOAs were approved with a total value of $183.3 million, as detailed in Table 18.

table 18: number and estimated potential value oF dsoas approved in 2009-10


value ($ million)


(years)


tender type


1 $15.5 School review services for Victorian Government schools 2 3 Public tender


2 $4.1 Victorian Government eRecruitment services tender 4 2 x 1 year options

Public tender

$2.1 Candidate management services for the Victorian public service graduate recruitment and selection process


Public tender


10 $36.0 Sixth generation valuation services panel 3 0 Public tender

$0.3 Panel of independent water savings auditors 1 5 Public tender

$1.0 Risk, insurance, OHS and wellbeing services panel 3 2 Public tender

$2.3 Panel supply of contract labour hire during bushfire activity across Victoria

2.5 0 Public tender








Standing offer agreementS This section provides an overview of the number and estimated potential value of all standing offer agreements (SOA) by type approved in 2009-10. SOAs include state purchase contracts (SPCs), departmental standing offer agreements (DSOAs), open standing offer agreements (OSOAs), open state purchase contracts (OSPCs) and software licensing enterprise agreements (SLEAs). There were no SLEAs reported in 2009-10.

The values in the tables are estimates, and the expenditure occurs over a number of years, as detailed in the contract term and option to extend columns.

state purChase ContraCtsState purchase contracts (SPCs) are standing offer agreements for common use goods and services, which are established when value for money can be best achieved through aggregating demand across departments and other government entities.

SPCs can involve arrangements with one or more suppliers for a set period of time (usually three to five years), incorporate a schedule of rates and performance levels, and usually require no obligation on the State to purchase a particular quantity of the goods or services. SPCs can be used by all government agencies as well as departments, provided that they commit to the requirements of the agreement.

SPCs can be structured as sole or multiple suppliers (multiple suppliers constitute a panel arrangement), or open or closed panels (where open panels are able to accept new suppliers at set or other times during the contract period, whereas closed panels are restricted to the suppliers engaged at the commencement of the contract).

In 2009-10, eight SPCs were approved with a total value of $507.3 million, as detailed in Table 16.

table 16: number and estimated potential value oF spCs approved in 2009-10


value ($ million)

title/desCription

ContraCt term

(years)


tender type


8 $15.0 National emergency warning system


$45.0 Travel services 3 2 x 1 year options

Public tender

$54.0 Marketing services panel


Public tender

$335.0 Fuel and associated products


Public tender

$0.3 Fringe benefits tax software

5 Nil Public tender

$2.0 Financial assessment services

3 Nil Public tender

$16.0 Motor vehicle and fleet disposal services


Public tender

$40.0 Print management services

4 1 x 1 year option

Public tender

Total 8 $507.3

open state purChase ContraCts An open state purchase contract (OSPC) refers to a contract established by one department that other departments with a similar need can access. It is similar to an SPC arrangement, but is not mandatory for those departments that have not committed to it.

On 17 June 2010, DSOAs were superseded by sole entity purchase contracts (SEPC).

In 2009-10, one OSPC was approved with a total value of $37.7 million as detailed in Table 17.

table 17: number and estimated potential value oF ospCs approved in 2009-10


value ($ million)


(years)


tender type

Justice 1 $37.7 Provision of essential safety measures programmed maintenance, management services and compliance service in the owned buildings of the Department of Justice

3 3 Public tender

Total 1 $37.3

departmental standing oFFer agreements Departmental standing offer agreements (DSOAs) are a strategic approach to procuring common use goods and services used exclusively by one department. These long-term agreements have benefits to the department such as:

– ∑using the aggregated purchasing power of the department to negotiate lower prices and better service; and

– ∑reducing the administrative burden for end users in preparing specifications, requesting quotations and tenders, and evaluating offers for similar purchases.

Greater use of DSOAs is seen by suppliers as an alternative to supplying the same information at significant time and cost, for multiple rounds of offers for requirements which are substantially the same.

On 17 June 2010, DSOAs were superseded by SEPCs.

In 2009-10, 50 DSOAs were approved with a total value of $183.3 million, as detailed in Table 18.

table 18: number and estimated potential value oF dsoas approved in 2009-10


value ($ million)


(years)


tender type


1 $15.5 School review services for Victorian Government schools 2 3 Public tender


2 $4.1 Victorian Government eRecruitment services tender 4 2 x 1 year options

Public tender

$2.1 Candidate management services for the Victorian public service graduate recruitment and selection process


Public tender


10 $36.0 Sixth generation valuation services panel 3 0 Public tender

$0.3 Panel of independent water savings auditors 1 5 Public tender

$1.0 Risk, insurance, OHS and wellbeing services panel 3 2 Public tender

$2.3 Panel supply of contract labour hire during bushfire activity across Victoria

2.5 0 Public tender









value ($ million)


(years)


tender type

Sustainability and Environment (continued)

$9.0 Panel for the supply of first aid services to the Department of Sustainability and Environment

2.3 2 Public tender

$2.5 Panel for the supply of hire transport vehicles 2.3 2 Public tender

$1.0 Panel for staff performance development coaching 2 0 Public tender

$3.0 Panel for supply of drummed and bulk aviation fuel 2.5 0 Public tender

$2.5 Supply of catering services for state control centre 2.5 2 Public tender

$3.0 'Fit for Fire' medical assessments across Victoria 2.5 2 Public tender


4 $3.8 Panel of legal service providers for Essential Services Commission 5 0 Public tender

$1.6 Financial management compliance support services and technical advice

3 2 Public tender

$1.3 Impairment assessment training guides for medical practitioners (for TAC and WorkCover assessments)

3 4 Public tender

$6.8 Panel of economic and technical services 3 2 Public tender

Victoria Police 33 $0.5 Licensing and registration system 2 0 Exemption from public tender

$2.1 Random access digital audio recording system - support, maintenance and development services

5 0 Ex & 3Q

$1.0 Digital evidence capture project - video and audio taping of evidence

3 2 Public tender

$1.0 Light cartage (parcel delivery) services to the Victoria Police warehouse

3 2 Public tender

$0.8 Provision of uniform caps and hats 3 0 Public tender

$0.2 Undergarment ballistic vests 0.3 0 Ex & 3Q

$0.2 Victoria police forms and books 0.3 0 Ex & 3Q

$0.2 Spatial web service -Victorian Mapping and Address Service (Land Data Validation System replacement)


$3.0 Food supplies to Victoria Police academy and Airlie Leader Development Centre

2 3 Public tender

$2.3 Design and development of intelligence and investigation management system

1 0 Ex & 3Q

$0.8 Satellite navigation units and mounting hardware 2 0 Public tender

$0.6 Moving mode radars 2 0 Ex & 3Q

$3.3 Livescan digital fingerprint devices maintenance and support services

0.6 2 Ex & 3Q

$0.2 Security name tags & accessories 3 0 Public tender

$0.6 Provision of equipment binders, folders and covers 2.5 2 Public tender

$4.8 Instrument maintenance contracts and consumables for automated forensic DNA profiling


$1.3 Uniform socks 5 0 Public tender


value ($ million)


(years)


tender type

Victoria Police (continued)

$0.2 Provision of quality test tool licences for information and communication technology projects

3 0 Ex & 3Q

$1.4 The supply of custom labelled recordable DVDs for interview recording equipment which records interviews directly to DVD media

3 2 Public tender

$0.2 Crime scene officer uniform shirts and trousers 1 1 Public tender

$7.1 Supply of semi-automatic pistols and ancillaries - Smith & Wesson MP40 semi-automatic pistols

5 0 Public tender

$1.4 Supply of semi-automatic pistols and ancillaries - TLR-1 tactical lighting system

5 0 Public tender

$0.2 Monitoring and analysis of open source intelligence information 1.6 0 Ex & 3Q

$0.5 Victoria Police organisation-wide census 1 2 Public tender

$45.7 Custodial services for the Melbourne Custody Centre 3 4 Public tender

$4.5 .40 calibre operational and training ammunition 2 2 Public tender

$1.0 Supply and installation of gunsafes 1 2 Public tender

$0.8 Handheld lasers 2 0 Ex & 3Q

$0.7 Regional boundaries alterations to HR assist project 0.3 0.3 Ex & 3Q

$0.7 Property and laboratory management peripherals and consumables

3 0 Public tender

$0.3 Supply of operational boots 1 0 Ex & 3Q

$0.2 Oleoresin capsicum foam 1 0 Ex & 3Q

$0.2 Oleoresin capsicum spray 1 0 Ex & 3Q

Total 50 $183.3


open standing oFFer agreementsOpen standing offer agreements (OSOAs) are a procurement arrangement established when a sole department has a specific requirement for frequently purchased goods and services. OSOAs are mandatory contracts for the department that established the procurement arrangement. An OSOA is similar to a DSOA except that other departments with a similar need can access it.

On 17 June 2010, OSOAs were superseded by SEPCs.

In 2009-10, one OSOA was approved with a total value of $19.1 million, as detailed in Table 19.

table 19: number and estimated potential value oF osoas approved in 2009-10


value ($ million)

title/desCription

ContraCt term

(years)


tender type


1 $19.1 Engagement of Novell for provision of services in relation to Rosetta and Efficient Technology Services


Total 1 $19.1










value ($ million)


(years)


tender type

Sustainability and Environment (continued)

$9.0 Panel for the supply of first aid services to the Department of Sustainability and Environment

2.3 2 Public tender

$2.5 Panel for the supply of hire transport vehicles 2.3 2 Public tender

$1.0 Panel for staff performance development coaching 2 0 Public tender

$3.0 Panel for supply of drummed and bulk aviation fuel 2.5 0 Public tender

$2.5 Supply of catering services for state control centre 2.5 2 Public tender

$3.0 'Fit for Fire' medical assessments across Victoria 2.5 2 Public tender


4 $3.8 Panel of legal service providers for Essential Services Commission 5 0 Public tender

$1.6 Financial management compliance support services and technical advice

3 2 Public tender

$1.3 Impairment assessment training guides for medical practitioners (for TAC and WorkCover assessments)

3 4 Public tender

$6.8 Panel of economic and technical services 3 2 Public tender

Victoria Police 33 $0.5 Licensing and registration system 2 0 Exemption from public tender

$2.1 Random access digital audio recording system - support, maintenance and development services

5 0 Ex & 3Q

$1.0 Digital evidence capture project - video and audio taping of evidence

3 2 Public tender

$1.0 Light cartage (parcel delivery) services to the Victoria Police warehouse

3 2 Public tender

$0.8 Provision of uniform caps and hats 3 0 Public tender

$0.2 Undergarment ballistic vests 0.3 0 Ex & 3Q

$0.2 Victoria police forms and books 0.3 0 Ex & 3Q

$0.2 Spatial web service -Victorian Mapping and Address Service (Land Data Validation System replacement)


$3.0 Food supplies to Victoria Police academy and Airlie Leader Development Centre

2 3 Public tender

$2.3 Design and development of intelligence and investigation management system

1 0 Ex & 3Q

$0.8 Satellite navigation units and mounting hardware 2 0 Public tender

$0.6 Moving mode radars 2 0 Ex & 3Q

$3.3 Livescan digital fingerprint devices maintenance and support services

0.6 2 Ex & 3Q

$0.2 Security name tags & accessories 3 0 Public tender

$0.6 Provision of equipment binders, folders and covers 2.5 2 Public tender

$4.8 Instrument maintenance contracts and consumables for automated forensic DNA profiling


$1.3 Uniform socks 5 0 Public tender


value ($ million)


(years)


tender type

Victoria Police (continued)

$0.2 Provision of quality test tool licences for information and communication technology projects

3 0 Ex & 3Q

$1.4 The supply of custom labelled recordable DVDs for interview recording equipment which records interviews directly to DVD media

3 2 Public tender

$0.2 Crime scene officer uniform shirts and trousers 1 1 Public tender

$7.1 Supply of semi-automatic pistols and ancillaries - Smith & Wesson MP40 semi-automatic pistols

5 0 Public tender

$1.4 Supply of semi-automatic pistols and ancillaries - TLR-1 tactical lighting system

5 0 Public tender

$0.2 Monitoring and analysis of open source intelligence information 1.6 0 Ex & 3Q

$0.5 Victoria Police organisation-wide census 1 2 Public tender

$45.7 Custodial services for the Melbourne Custody Centre 3 4 Public tender

$4.5 .40 calibre operational and training ammunition 2 2 Public tender

$1.0 Supply and installation of gunsafes 1 2 Public tender

$0.8 Handheld lasers 2 0 Ex & 3Q

$0.7 Regional boundaries alterations to HR assist project 0.3 0.3 Ex & 3Q

$0.7 Property and laboratory management peripherals and consumables

3 0 Public tender

$0.3 Supply of operational boots 1 0 Ex & 3Q

$0.2 Oleoresin capsicum foam 1 0 Ex & 3Q

$0.2 Oleoresin capsicum spray 1 0 Ex & 3Q

Total 50 $183.3


open standing oFFer agreementsOpen standing offer agreements (OSOAs) are a procurement arrangement established when a sole department has a specific requirement for frequently purchased goods and services. OSOAs are mandatory contracts for the department that established the procurement arrangement. An OSOA is similar to a DSOA except that other departments with a similar need can access it.

On 17 June 2010, OSOAs were superseded by SEPCs.

In 2009-10, one OSOA was approved with a total value of $19.1 million, as detailed in Table 19.

table 19: number and estimated potential value oF osoas approved in 2009-10


value ($ million)

title/desCription

ContraCt term

(years)


tender type


1 $19.1 Engagement of Novell for provision of services in relation to Rosetta and Efficient Technology Services


Total 1 $19.1









Strategic ProcUrement PlanS A strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts (usually over $10 million and/or complex projects of lesser value) and draws a strategic connection between higher levels of project planning and implementation through procurement.

SPPs are prepared before starting the procurement process, and must be approved before any approach is made to market. The procurement process after approval may take some time. The estimated expenditure provided in this section does not signify a formal budget commitment by the agency. The indicative value is based on a business case assessment of need and market capability to supply. Actual expenditure approved will be reported after the procurement process is completed.

SPPs are not required for SPCs and OSPCs, as they are incorporated in the SPC business plan.

Details of SPPs are contained in Table 20.

table 20: number and planned estimated value oF spps in 2009-10


value ($ million)

title/desCription ContraCt type approved in FinanCial

year 2009-10


6 $22.0 Workplace learning coordinators One-off supply Yes

$15.5 School review services for Victorian Government schools DSOA Yes

$15.0 New departmental research and evaluation partnerships DSOA No

$27.8 Assessment service - program for students with disabilities One-off supply Yes

$61.6 Microsoft large account reseller services SLEA Yes

$687.3 Special school bus contracts One-off supply No

Health 1 $284.0 IT applications to support the HealthSmart service including Smart Card capability for users

One-off supply No

Human Services 2 $16.4 Migration and optional hosting service for departmental SAP/HR payroll systems and rostering attendance system

One-off supply Yes

$75.3 Program of equipment aids for disabled people One-off supply No

Justice 1 $30.2 Provision of working with children check application capture services One-off supply No


1 $2.1 Provision for candidate management services for the Victorian public service graduate recruitment and selection process

DSOA Yes


3 $86.0 Water surface monitoring field services One-off supply Yes

$430.0 Aviation services between 2009-10 and 2014-15 One-off supply No

$50.0 Ongoing panel of civil contractors (note: value is estimated maximum per annum)

DSOA No

Transport 2 $63.0 Road freight access charge collection service at the Port of Melbourne - design, installation, operation and maintenance

One-off supply No

$1 200.0 Country and regional urban bus services contracts One-off supply Yes


2 $92.2 Whole of Victorian Government (WoVG) arrangement including support and maintenance for the provision of specific Oracle products

WoVG No

$60.6 WoVG arrangement for the provision of Citrix products and services WoVG No


value ($ million)


year 2009-10

Victoria Police 4 $52.9 Custodial services for the Melbourne Custody Centre DSOA Yes

$6.6 Short term accommodation DSOA No

$8.0 Firearms replacement project (.40 calibre ammunition, gun safes, small torch, holsters)

DSOA Yes

$4.8 Instrument contacts and consumables for automated forensic DNA profiling

DSOA Yes

Total 22 $3 291.3








A strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts and draws a strategic connection between higher levels of project planning and implementation through procurement.

Strategic ProcUrement PlanS A strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts (usually over $10 million and/or complex projects of lesser value) and draws a strategic connection between higher levels of project planning and implementation through procurement.

SPPs are prepared before starting the procurement process, and must be approved before any approach is made to market. The procurement process after approval may take some time. The estimated expenditure provided in this section does not signify a formal budget commitment by the agency. The indicative value is based on a business case assessment of need and market capability to supply. Actual expenditure approved will be reported after the procurement process is completed.

SPPs are not required for SPCs and OSPCs, as they are incorporated in the SPC business plan.

Details of SPPs are contained in Table 20.

table 20: number and planned estimated value oF spps in 2009-10


value ($ million)


year 2009-10


6 $22.0 Workplace learning coordinators One-off supply Yes

$15.5 School review services for Victorian Government schools DSOA Yes

$15.0 New departmental research and evaluation partnerships DSOA No

$27.8 Assessment service - program for students with disabilities One-off supply Yes

$61.6 Microsoft large account reseller services SLEA Yes

$687.3 Special school bus contracts One-off supply No

Health 1 $284.0 IT applications to support the HealthSmart service including Smart Card capability for users

One-off supply No

Human Services 2 $16.4 Migration and optional hosting service for departmental SAP/HR payroll systems and rostering attendance system

One-off supply Yes

$75.3 Program of equipment aids for disabled people One-off supply No

Justice 1 $30.2 Provision of working with children check application capture services One-off supply No


1 $2.1 Provision for candidate management services for the Victorian public service graduate recruitment and selection process

DSOA Yes


3 $86.0 Water surface monitoring field services One-off supply Yes

$430.0 Aviation services between 2009-10 and 2014-15 One-off supply No

$50.0 Ongoing panel of civil contractors (note: value is estimated maximum per annum)

DSOA No

Transport 2 $63.0 Road freight access charge collection service at the Port of Melbourne - design, installation, operation and maintenance

One-off supply No

$1 200.0 Country and regional urban bus services contracts One-off supply Yes


2 $92.2 Whole of Victorian Government (WoVG) arrangement including support and maintenance for the provision of specific Oracle products

WoVG No

$60.6 WoVG arrangement for the provision of Citrix products and services WoVG No


value ($ million)


year 2009-10

Victoria Police 4 $52.9 Custodial services for the Melbourne Custody Centre DSOA Yes

$6.6 Short term accommodation DSOA No

$8.0 Firearms replacement project (.40 calibre ammunition, gun safes, small torch, holsters)

DSOA Yes

$4.8 Instrument contacts and consumables for automated forensic DNA profiling

DSOA Yes

Total 22 $3 291.3








A strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts and draws a strategic connection between higher levels of project planning and implementation through procurement.

dePartmental ProcUrement activitieS This section provides a breakdown of the value and number of one-off supply approvals over $150 000 approved by departments. The data includes variations but excludes exceptional procurement, standing offer agreements and critical incident procurement.

The Department of Health was created in 2009 so the tables and graphics contain no retrospective data for this department.

The Department of Health was created out of the Department of Human Services so any retrospective data would be incorporated under this department.

overview oF one-oFF supply approvals by departmentIn 2009-10, departments approved or endorsed 589 one-off supply contracts with a total value of $1 111.8 million.

Table 21 provides an overview of procurement process approvals by department and a comparison with the five-year average.

table 21: number and value oF one-oFF supply ContraCts by department in 2009-10 Compared with the Five-year average

department 2009-10 Five-year average




124 $243.3 86 $146.8

Health 29 $34.8 – –

Human Services 44 $222.7 90 $293.8


35 $12.1 44 $30.9

Justice 107 $112.4 138 $247.2


10 $8.0 54 $21.5

Premier and Cabinet 7 $3.0 14 $152.6

Primary Industries 56 $55.5 44 $28.6

State Services Authority 2 $1.0 2 $0.4


63 $246.5 82 $177.0

Transport 47 $61.7 51 $130.9

Treasury and Finance 29 $78.6 54 $262.61

Victoria Police 36 $32.2 65 $152.0

Totals 589 $1 111.8 730 $1 651.2

Note: Department of Health was created in 2009 so there is no five-year data available.


value oF one-oFF supply approvals by departmentFigure 7 provides a departmental comparison of one-off supply approvals by value in 2009-10.

Table 22 and Figure 9 provide an overview of the value of departmental one-off supply approvals over the past five years.

Figure 7: departmental Comparison oF one-oFF supply approvals in 2009-10 by value

Figure 7: Departmental comparison of one-off supply approvals in 2009-10 by value


Human Services

Justice


Premier and Cabinet


Health

Primary Industries


Transport


Victoria Police


1%

3%

3%

7%

6%

5%

22%

20%

22%

10%

1%0%

0%

table 22: value oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10

Education and Early Childhood Development $69.7 $88.6 $210.1 $122.2 $243.3

Health - - - - $34.8

Human Services $345.1 $309.3 $443.6 $148.2 $222.7

Innovation, Industry and Regional Development $19.9 $16.9 $52.2 $53.5 $12.1

Justice $162.6 $145.3 $705.7 $109.9 $112.4

Planning and Community Development $69.3 $7.8 $13.3 $9.2 $8.0

Premier and Cabinet $557.7 $174.1 $12.4 $15.6 $3.0

Primary Industries $8.2 $12.0 $45.6 $21.5 $55.5

State Services Authority $0.0 $0.7 $0.2 $0.2 $1.0

Sustainability and Environment $172.4 $119.7 $121.3 $224.9 $246.5

Transport $178.3 $150.7 $181.7 $82.1 $61.7

Treasury and Finance $69.8 $1014.7 $44.2 $105.7 $78.6

Victoria Police $272.1 $297.4 $37.2 $121.2 $32.2

Totals ($ million) $1 925.1 $2 337.2 $1 867.5 $1 014.2 $1 111.8

Note: Department of Health was created in 2009.








dePartmental ProcUrement activitieS This section provides a breakdown of the value and number of one-off supply approvals over $150 000 approved by departments. The data includes variations but excludes exceptional procurement, standing offer agreements and critical incident procurement.

The Department of Health was created in 2009 so the tables and graphics contain no retrospective data for this department.

The Department of Health was created out of the Department of Human Services so any retrospective data would be incorporated under this department.

overview oF one-oFF supply approvals by departmentIn 2009-10, departments approved or endorsed 589 one-off supply contracts with a total value of $1 111.8 million.

Table 21 provides an overview of procurement process approvals by department and a comparison with the five-year average.

table 21: number and value oF one-oFF supply ContraCts by department in 2009-10 Compared with the Five-year average

department 2009-10 Five-year average




124 $243.3 86 $146.8

Health 29 $34.8 – –

Human Services 44 $222.7 90 $293.8


35 $12.1 44 $30.9

Justice 107 $112.4 138 $247.2


10 $8.0 54 $21.5

Premier and Cabinet 7 $3.0 14 $152.6

Primary Industries 56 $55.5 44 $28.6

State Services Authority 2 $1.0 2 $0.4


63 $246.5 82 $177.0

Transport 47 $61.7 51 $130.9

Treasury and Finance 29 $78.6 54 $262.61

Victoria Police 36 $32.2 65 $152.0

Totals 589 $1 111.8 730 $1 651.2

Note: Department of Health was created in 2009 so there is no five-year data available.


value oF one-oFF supply approvals by departmentFigure 7 provides a departmental comparison of one-off supply approvals by value in 2009-10.


Figure 7: departmental Comparison oF one-oFF supply approvals in 2009-10 by value

Figure 7: Departmental comparison of one-off supply approvals in 2009-10 by value


Human Services

Justice


Premier and Cabinet


Health

Primary Industries


Transport


Victoria Police


1%

3%

3%

7%

6%

5%

22%

20%

22%

10%

1%0%

0%

table 22: value oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10

Education and Early Childhood Development $69.7 $88.6 $210.1 $122.2 $243.3

Health - - - - $34.8

Human Services $345.1 $309.3 $443.6 $148.2 $222.7

Innovation, Industry and Regional Development $19.9 $16.9 $52.2 $53.5 $12.1

Justice $162.6 $145.3 $705.7 $109.9 $112.4

Planning and Community Development $69.3 $7.8 $13.3 $9.2 $8.0




Sustainability and Environment $172.4 $119.7 $121.3 $224.9 $246.5

Transport $178.3 $150.7 $181.7 $82.1 $61.7


Victoria Police $272.1 $297.4 $37.2 $121.2 $32.2

Totals ($ million) $1 925.1 $2 337.2 $1 867.5 $1 014.2 $1 111.8









number oF one-oFF supply approvals by departmentFigure 8 provides a departmental comparison of one-off supply approvals by number in 2009-10.


Figure 8: departmental Comparison oF one-oFF supply approvals in 2009-10 by number

Figure 8: Departmental comparison of one-off supply approvals in 2009-10 by number


Human Services

Justice


Premier and Cabinet


Health

Primary Industries


Transport


Victoria Police


6%5%

8%

10%6%

7%

5%11%

21%

18%

1% 2%0%

table 23: number oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10

Education and Early Childhood Development 79 108 62 59 124

Health - - - - 29

Human Services 88 108 121 90 44

Innovation, Industry and Regional Development 36 36 71 42 35

Justice 124 119 142 197 107

Planning and Community Development 174 34 30 21 10

Premier and Cabinet 22 23 11 7 7

Primary Industries 19 30 59 54 56

State Services Authority 0 5 3 1 2

Sustainability and Environment 73 63 89 123 63

Transport 50 59 65 34 47

Treasury and Finance 40 74 71 54 29

Victoria Police 94 72 77 47 36

Totals (number) 799 731 801 729 589


Figure 9: value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 9: Value ($ million) of one-off supply approvalsby department from 2005-06 to 2009-10

$0

$200

$400

$600

$800

$1 000

2005-06 2006-07 2007-08 2008-09 2009-10

Education and EarlyChildhood Development

Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police

Figure 10: number oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 10: Number of one-off supply approvals bydepartment from 2005-06 to 2009-10

0

50

100

150

200

2005-06 2006-07 2007-08 2008-09 2009-10


Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police








number oF one-oFF supply approvals by departmentFigure 8 provides a departmental comparison of one-off supply approvals by number in 2009-10.


Figure 8: departmental Comparison oF one-oFF supply approvals in 2009-10 by number

Figure 8: Departmental comparison of one-off supply approvals in 2009-10 by number


Human Services

Justice


Premier and Cabinet


Health

Primary Industries


Transport


Victoria Police


6%5%

8%

10%6%

7%

5%11%

21%

18%

1% 2%0%

table 23: number oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10

Education and Early Childhood Development 79 108 62 59 124

Health - - - - 29

Human Services 88 108 121 90 44

Innovation, Industry and Regional Development 36 36 71 42 35

Justice 124 119 142 197 107

Planning and Community Development 174 34 30 21 10

Premier and Cabinet 22 23 11 7 7

Primary Industries 19 30 59 54 56

State Services Authority 0 5 3 1 2

Sustainability and Environment 73 63 89 123 63

Transport 50 59 65 34 47

Treasury and Finance 40 74 71 54 29

Victoria Police 94 72 77 47 36

Totals (number) 799 731 801 729 589


Figure 9: value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 9: Value ($ million) of one-off supply approvalsby department from 2005-06 to 2009-10

$0

$200

$400

$600

$800

$1 000

2005-06 2006-07 2007-08 2008-09 2009-10


Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police

Figure 10: number oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 10: Number of one-off supply approvals bydepartment from 2005-06 to 2009-10

0

50

100

150

200

2005-06 2006-07 2007-08 2008-09 2009-10


Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police








average value oF one-oFF supply approvals by departmentTable 24 and Figure 11 provide details of the average value of one-off supply approvals by department over the last five financial years.

The total average value of one-off supply approvals by department in 2009-10 was $1.9 million. Compared with the five-year average, this is at the lower end.

table 24: average value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10


$0.9 $0.8 $3.4 $2.1 $2.0

Health $1.2

Human Services $3.9 $2.9 $3.7 $1.6 $5.1


$0.6 $0.5 $0.7 $1.3 $0.3

Justice $1.3 $1.2 $5.0 $0.6 $1.1


$0.4 $0.2 $0.4 $0.4 $0.8





$2.4 $1.9 $1.4 $1.8 $3.9

Transport $3.6 $2.6 $2.8 $2.4 $1.3


Victoria Police $2.9 $4.1 $0.5 $2.6 $0.9


$2.4 $3.2 $2.3 $1.4 $1.9


Figure 11: average value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 11: Average value ($ million) of one-off supplyapprovals by department from 2005-06 to 2009-10

0

$5

$10

$15

$20

$25

$30

2005-06 2006-07 2007-08 2008-09 2009-10


Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police

comPliance witH vgPb ProcUrement PolicieSSection 54L of the Financial Management Act 1994 requires all accountable officers and departmental officers to comply with VGPB procurement policies when acquiring goods and services. Failure to comply with these policies is a breach. Where a breach involves a financial commitment above $150 000, the accountable officer is to report the breach to the VGPB immediately.

The VGPB will note:

– ∑factors leading to the non-compliance;

– ∑actions taken to rectify the breach; and

– ∑processes implemented to prevent a recurrence of factors that led to the non-compliance in the first instance.

The department may finalise the outstanding financial matter after noting by the VGPB and proceeding with approval from an officer with appropriate financial delegation.

The ten breaches of VGPB policies in 2009-10 make up 1.7 per cent of the total number of procurement approvals and 0.5 per cent of the total value of procurement approvals.

The following six departments recorded no breaches to the VGPB during 2009-10:

– ∑Department of Education and Early Childhood Development

– Department of Innovation, Industry and Regional Development

– ∑Department of Premier and Cabinet

– ∑Department of Primary Industries

– ∑Department of Treasury and Finance

– ∑State Services Authority

The number of breaches recorded has declined from 13 in 2008-09 to ten in 2009-10, while the value of breaches has substantially decreased from $45.3 million in 2008-09 to $5.7 million in 2009-10.

table 25: ComplianCe with vgpb proCurement poliCies in 2009-10

department number oF breaChes

total number oF purChases

level oF ComplianCe

Education and Early Childhood Development 0 124 100%

Health 1 29 97%

Human Services 1 44 98%

Innovation, Industry and Regional Development 0 35 100%

Justice 1 107 99%

Planning and Community Development 2 10 80%

Premier and Cabinet 0 7 100%

Primary Industries 0 56 100%

State Services Authority 0 2 100%

Sustainability and Environment 2 63 97%

Transport 1 47 98%

Treasury and Finance 0 29 100%

Victoria Police 2 36 94%

Total 10 589* 98%

* Includes one-off supply approvals and variations but excludes exceptional procurement, SOAs and CIP.








average value oF one-oFF supply approvals by departmentTable 24 and Figure 11 provide details of the average value of one-off supply approvals by department over the last five financial years.

The total average value of one-off supply approvals by department in 2009-10 was $1.9 million. Compared with the five-year average, this is at the lower end.

table 24: average value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10

department 2005-06 2006-07 2007-08 2008-09 2009-10


$0.9 $0.8 $3.4 $2.1 $2.0

Health $1.2

Human Services $3.9 $2.9 $3.7 $1.6 $5.1


$0.6 $0.5 $0.7 $1.3 $0.3

Justice $1.3 $1.2 $5.0 $0.6 $1.1


$0.4 $0.2 $0.4 $0.4 $0.8





$2.4 $1.9 $1.4 $1.8 $3.9

Transport $3.6 $2.6 $2.8 $2.4 $1.3


Victoria Police $2.9 $4.1 $0.5 $2.6 $0.9


$2.4 $3.2 $2.3 $1.4 $1.9


Figure 11: average value ($ million) oF one-oFF supply approvals by department From 2005-06 to 2009-10 Figure 11: Average value ($ million) of one-off supplyapprovals by department from 2005-06 to 2009-10

0

$5

$10

$15

$20

$25

$30

2005-06 2006-07 2007-08 2008-09 2009-10


Human Services

Health


Justice


Premier and Cabinet

Primary Industries



Transport


Victoria Police

comPliance witH vgPb ProcUrement PolicieSSection 54L of the Financial Management Act 1994 requires all accountable officers and departmental officers to comply with VGPB procurement policies when acquiring goods and services. Failure to comply with these policies is a breach. Where a breach involves a financial commitment above $150 000, the accountable officer is to report the breach to the VGPB immediately.

The VGPB will note:

– ∑factors leading to the non-compliance;

– ∑actions taken to rectify the breach; and

– ∑processes implemented to prevent a recurrence of factors that led to the non-compliance in the first instance.

The department may finalise the outstanding financial matter after noting by the VGPB and proceeding with approval from an officer with appropriate financial delegation.

The ten breaches of VGPB policies in 2009-10 make up 1.7 per cent of the total number of procurement approvals and 0.5 per cent of the total value of procurement approvals.

The following six departments recorded no breaches to the VGPB during 2009-10:

– ∑Department of Education and Early Childhood Development

– Department of Innovation, Industry and Regional Development

– ∑Department of Premier and Cabinet

– ∑Department of Primary Industries

– ∑Department of Treasury and Finance

– ∑State Services Authority

The number of breaches recorded has declined from 13 in 2008-09 to ten in 2009-10, while the value of breaches has substantially decreased from $45.3 million in 2008-09 to $5.7 million in 2009-10.

table 25: ComplianCe with vgpb proCurement poliCies in 2009-10

department number oF breaChes

total number oF purChases

level oF ComplianCe

Education and Early Childhood Development 0 124 100%

Health 1 29 97%

Human Services 1 44 98%

Innovation, Industry and Regional Development 0 35 100%

Justice 1 107 99%

Planning and Community Development 2 10 80%

Premier and Cabinet 0 7 100%

Primary Industries 0 56 100%

State Services Authority 0 2 100%

Sustainability and Environment 2 63 97%

Transport 1 47 98%

Treasury and Finance 0 29 100%

Victoria Police 2 36 94%

Total 10 589* 98%

* Includes one-off supply approvals and variations but excludes exceptional procurement, SOAs and CIP.








accredited PUrcHaSing Unit activitieSsummary oF apu aCtivities in 2009-10This section provides information about the strategic projects and initiatives undertaken by APUs in relation to procurement of goods and services. It may include progress towards implementing electronic procurement; skills development and training; communication activities; and implementing commitments towards APU accreditation.

APUs and their secretariat ensure compliance with VGPB supply policies, keeping departmental policies, tools and templates aligned and up-to-date. APUs provide advice, assistance and expertise towards supporting departmental staff in their procurement activities.

In addition to the activities outlined below, APUs are heavily involved in the consultation process for changes to procurement policies such as changes to VGPB supply policies. APUs may also participate in reference groups and tender evaluation panels to provide departmental input and strategic advice on whole-of-government purchasing arrangements.

In 2009-10, departments participated in regular working groups providing invaluable input into the new procurement framework. In the year ahead, departments will continue to work on procurement reform, preparing a change process to help them transition to the new framework.

Department of Education and Early Childhood Development

apu ChairJanet Thompson Acting General Manager, Procurement Division, Office for Resources and Infrastructure

Formerly Ms Gail Hart, General Manager, Corporate Services Division, Office for Resources and Infrastructure

aCCreditation levelTier 1

In 2009-10, the Department of Education and Early Childhood Development (DEECD) underwent an independent review of their procurement processes. As a result of the review, the department is adopting a centre-led procurement model designed to improve the entire procurement process. This will be implemented in 2010-11.

Other activities undertaken by the APU: – ∑Introduced a travel and personal expenses module within the Ariba purchase-to-pay system to facilitate online approval for travel and reimbursement of personal travel expenses.

– ∑Created a dedicated procurement unit within DEECD. – ∑Established a quarterly report to keep executive management abreast of procurement activity, trends, policy compliance and emerging issues.

– ∑Provided procurement training for executive officers and Victorian public service staff.

– ∑Reviewed the DEECD research panel to improve the rules of engagement and better define the terms of use.

– ∑Reviewed APU membership to ensure adequate representation across DEECD and to measure the impact of APU activity on delivery of departmental projects and on APU member workloads. The departmental management committee endorsed the proposal for an additional executive officer position to be filled on a twelve month rotational basis.

– ∑Developed the Corporate and School Gifts, Benefits and Hospitality policy.

– ∑Endorsed six strategic procurement plans with an estimated value of $829.1 million.

Activities planned for 2010-11 include: – ∑Implementing the independent procurement review findings and next steps. This includes developing a departmental procurement plan aligned with the department’s strategic priorities.

– Establishing a new APU site to log and track APU submissions. – Reviewing and simplifying the suite of DEECD agreements and commercial contracts to ensure they are easy to understand, contractually sound and adequately address intellectual property.

– ∑Updating the request for tender and request for quotation models.






Department of Health Department of Human Services

apu Chair (shared with the department oF health)Mr Alan Hall Executive Director, Corporate Services Division (DHS)


On 12 August 2009, the Victorian Government created the Department of Health (Health) following machinery of government changes. The associated Administrative Arrangements Order allowed the Department of Human Services (DHS) to undertake transactions on behalf of Health until 30 September 2009.

The DHS APU reviewed its operations to determine the best mechanism for processing procurement activity in the two departments, given that DHS would continue to supply a range of shared services to Health. A joint APU based on the existing DHS APU structure was considered as the best option and the VGPB supported this decision.

The joint APU has four Health and four DHS members, all at the executive level, with the chairman from DHS. The senior procurement manager of Health attends bi-monthly APU meetings and the APU secretariat is made up of two staff members from Health and two from DHS.

Other activities undertaken by the APU: – ∑Developed a contract reporting system (CRS) to capture major contracts and help contract managers monitor their key deliverables. The CRS will be implemented across both departments in 2010-11.

– ∑Continued to promote the ‘Excellence in Procurement’ framework developed in 2007-08 with an emphasis on the uptake of procurement training across both departments.

– ∑Supported DTF procurement spendmapping exercises and provided the APU with a 2008-09 goods and services spend map.

– Incorporated environmental sustainability into procurement processes and practices.

– ∑Participated in a review of the funding process for supply of services to the public by community sector organisations (CSO). DHS updated several key APU templates to improve communications with CSOs.



Activities planned for 2010-11 include: – ∑Implementing the new CRS (as mentioned before). The CRS will enable devolved, streamlined monitoring and reporting of contract activity at branch, divisional/regional and departmental levels, replacing a number of shadow systems.

– ∑Developing strategic implementation plans for the two departments recognising the common linkages of co-location of metropolitan and regional business operations and shared services responsibilities of each department in relation to the other.

– ∑Managing the risks associated with the separation of the financial structures of DHS and Health and ensuring ongoing compliance during the procurement reform.

– Continuing the ‘Excellence in Procurement’ framework across both departments.

accredited PUrcHaSing Unit activitieSsummary oF apu aCtivities in 2009-10This section provides information about the strategic projects and initiatives undertaken by APUs in relation to procurement of goods and services. It may include progress towards implementing electronic procurement; skills development and training; communication activities; and implementing commitments towards APU accreditation.

APUs and their secretariat ensure compliance with VGPB supply policies, keeping departmental policies, tools and templates aligned and up-to-date. APUs provide advice, assistance and expertise towards supporting departmental staff in their procurement activities.

In addition to the activities outlined below, APUs are heavily involved in the consultation process for changes to procurement policies such as changes to VGPB supply policies. APUs may also participate in reference groups and tender evaluation panels to provide departmental input and strategic advice on whole-of-government purchasing arrangements.

In 2009-10, departments participated in regular working groups providing invaluable input into the new procurement framework. In the year ahead, departments will continue to work on procurement reform, preparing a change process to help them transition to the new framework.

Department of Education and Early Childhood Development

apu ChairJanet Thompson Acting General Manager, Procurement Division, Office for Resources and Infrastructure

Formerly Ms Gail Hart, General Manager, Corporate Services Division, Office for Resources and Infrastructure


In 2009-10, the Department of Education and Early Childhood Development (DEECD) underwent an independent review of their procurement processes. As a result of the review, the department is adopting a centre-led procurement model designed to improve the entire procurement process. This will be implemented in 2010-11.

Other activities undertaken by the APU: – ∑Introduced a travel and personal expenses module within the Ariba purchase-to-pay system to facilitate online approval for travel and reimbursement of personal travel expenses.

– ∑Created a dedicated procurement unit within DEECD. – ∑Established a quarterly report to keep executive management abreast of procurement activity, trends, policy compliance and emerging issues.

– ∑Provided procurement training for executive officers and Victorian public service staff.

– ∑Reviewed the DEECD research panel to improve the rules of engagement and better define the terms of use.

– ∑Reviewed APU membership to ensure adequate representation across DEECD and to measure the impact of APU activity on delivery of departmental projects and on APU member workloads. The departmental management committee endorsed the proposal for an additional executive officer position to be filled on a twelve month rotational basis.

– ∑Developed the Corporate and School Gifts, Benefits and Hospitality policy.

– ∑Endorsed six strategic procurement plans with an estimated value of $829.1 million.

Activities planned for 2010-11 include: – ∑Implementing the independent procurement review findings and next steps. This includes developing a departmental procurement plan aligned with the department’s strategic priorities.

– Establishing a new APU site to log and track APU submissions. – Reviewing and simplifying the suite of DEECD agreements and commercial contracts to ensure they are easy to understand, contractually sound and adequately address intellectual property.

– ∑Updating the request for tender and request for quotation models.






Department of Health Department of Human Services

apu Chair (shared with the department oF health)Mr Alan Hall Executive Director, Corporate Services Division (DHS)


On 12 August 2009, the Victorian Government created the Department of Health (Health) following machinery of government changes. The associated Administrative Arrangements Order allowed the Department of Human Services (DHS) to undertake transactions on behalf of Health until 30 September 2009.

The DHS APU reviewed its operations to determine the best mechanism for processing procurement activity in the two departments, given that DHS would continue to supply a range of shared services to Health. A joint APU based on the existing DHS APU structure was considered as the best option and the VGPB supported this decision.

The joint APU has four Health and four DHS members, all at the executive level, with the chairman from DHS. The senior procurement manager of Health attends bi-monthly APU meetings and the APU secretariat is made up of two staff members from Health and two from DHS.

Other activities undertaken by the APU: – ∑Developed a contract reporting system (CRS) to capture major contracts and help contract managers monitor their key deliverables. The CRS will be implemented across both departments in 2010-11.

– ∑Continued to promote the ‘Excellence in Procurement’ framework developed in 2007-08 with an emphasis on the uptake of procurement training across both departments.

– ∑Supported DTF procurement spendmapping exercises and provided the APU with a 2008-09 goods and services spend map.

– Incorporated environmental sustainability into procurement processes and practices.

– ∑Participated in a review of the funding process for supply of services to the public by community sector organisations (CSO). DHS updated several key APU templates to improve communications with CSOs.



Activities planned for 2010-11 include: – ∑Implementing the new CRS (as mentioned before). The CRS will enable devolved, streamlined monitoring and reporting of contract activity at branch, divisional/regional and departmental levels, replacing a number of shadow systems.

– ∑Developing strategic implementation plans for the two departments recognising the common linkages of co-location of metropolitan and regional business operations and shared services responsibilities of each department in relation to the other.

– ∑Managing the risks associated with the separation of the financial structures of DHS and Health and ensuring ongoing compliance during the procurement reform.

– Continuing the ‘Excellence in Procurement’ framework across both departments.








Department of Innovation, Industry and Regional Development

apu ChairMr Rob Barr Deputy Secretary, Corporate Services and Development

Formerly Mr John Hall, Acting Deputy Secretary, Corporate Services and Development


The APU continued to play a key role in ensuring the integrity of the procurement process and providing a central focus for the coordination and strategic management of purchasing activity within the Department of Innovation, Industry and Regional Development (DIIRD). The APU conducts an ongoing review of procurement performance to identify areas of improvement and ensures they are promptly addressed.

The APU increased its membership from five to seven to develop a broader perspective of procurement in the department and enhance the skills and experience of the APU.

Other activities undertaken by the APU: – ∑Reviewed DIIRD’s chart of accounts to provide improved financial and procurement reporting for the department.

– ∑Started developing a contract management framework and good practice guide to improve contract management practices. This is due for completion in 2010-11.

– ∑Transitioned users to the new eTender system (Tenders VIC).

– ∑Built contract management skills in the department by promoting PACCER training, with a mandatory requirement for inexperienced contract managers to attend the PACCER contract management course.

Activities planned for 2010-11 include: – ∑Finalising the contract management framework (mentioned above).

– ∑Introducing a procurement training program to increase awareness and knowledge of departmental procurement practices, particularly for new staff. This was originally planned for 2009-10 but was delayed to align with the procurement reform and the new VGPB training strategy.

– ∑Reviewing APU processes to reduce the organisational administrative burden.

– ∑Investigating contract management systems for DIIRD following finalisation of the contract management framework review.

Department of Justice

apu ChairMs Gail Moody Executive Director, Strategic Projects and Planning


In 2009-10, the Department of Justice (DOJ) APU focused on training and raising staff awareness to ensure compliance with procurement policies. This included in-house training sessions and forums, as well as promoting PACCER and mandating the PACCER contract management course for all contract managers.

The department also worked on minimising financial risks by mandating the use of financial risk reports to assess the financial stability of companies before entering into a contractual arrangement. High risk or strategic purchases must also be continually financially monitored.

Other activities undertaken by the APU: – ∑Added a number of environmental products to its range of office supplies such as recycled or recyclable items.

– Implemented recommendations from audits carried out in 2008-09 to ensure alignment with the Financial Management Act and VGPB policies, and continuous improvement of departmental business practice.

– ∑Reviewed and updated the department’s online procurement and contracting content. As a result of this review, the APU is planning to develop a new format for delivering this information.

– Created a procurement toolbox with a self-serve approach for clients, reducing processing time for the APU. The toolbox is due for release in August 2010.

– ∑Held forums for contract managers and procurement officers. Attendees learnt about procurement-related matters and meet subject matter experts.

– ∑Conducted procurement awareness sessions to keep staff informed of policy changes and to refresh procurement knowledge.

Activities planned for 2010-11 include: – ∑Launching the procurement toolbox (mentioned above). – ∑Financial monitoring of companies identified as high risk or companies who are contractually linked to the department. This will allow DOJ to quickly address and limit identified risks.

– ∑Developing procurement induction material and tracking new starters through the department’s learning management system.

– ∑Providing procurement training at prison forums and meetings to raise awareness of procurement policies and procedures. This is a recommendation from a contract management audit carried out in November 2009.

– ∑Reviewing APU processes and benchmarking against other departments with a view to minimising any unnecessary administrative burden on business units and the APU.

Department of Planning and Community Development

apu ChairMr Stephen Gregory Chief Finance Officer, Corporate Finance


The APU extended its membership to ensure a wide range of Department of Planning and Community Development (DPCD) business units are represented and involved in APU activities. DPCD continues to increase procurement capability – all staff involved in procurements above $150 000 attend PACCER courses to the requisite level. The department continues to work on integrating procurement training and accreditation into the DPCD capability framework

Other activities undertaken by the APU: – ∑Revised the department’s procurement policy to align with VGPB policy updates and the Victorian Industry Participation Policy.

– ∑Successfully prepared for the Victorian Auditor-General’s Office audit of the department’s contract publishing systems.

– ∑Continually assessed the DPCD contracts register for improvements to functionality, such as simplifying the management and reporting of contracts (taking into account annual reporting requirements).

– ∑Provided in-house procurement training to improve the quality of APU submissions and ensure greater compliance with VGPB and departmental processes

– ∑Developed and updated the procurement pages on the DPCD intranet to help project managers comply with VGPB and DPCD procurement policies.

Activities planned for 2010-11 include: – ∑Improving the level of procurement expertise through training, assessment and accreditation. In-house training programs will be closely monitored to align with the move towards a national standard in procurement training.

Department of Primary Industries

apu ChairMs Giovanna Tivisini General Counsel, Office of the General Counsel


In 2009-10, the APU improved their response time and turnaround of APU submissions. The APU continues to work with divisions and business units to ensure that Department of Primary Industries (DPI) staff are aware and understand VGPB procurement policies. The contract resource unit is assisting more business units to develop twelve-month procurement plans.

Other activities undertaken by the APU: – ∑Incorporated category and spend analysis in quarterly executive management reporting.

– ∑Engaged senior solicitors early in the negotiation of terms and conditions with vendors for major contracts.

– ∑Implemented a procurement and contract management training strategy to improve access to training across the State.

– ∑Improved management of exemptions by helping staff understand how to research the market and when to appropriately seek an exemption.

Activities planned for 2010-11 include: – ∑Carrying out strategic business planning in early 2010-11 with a focus on improving procurement and contract management.








Department of Innovation, Industry and Regional Development

apu ChairMr Rob Barr Deputy Secretary, Corporate Services and Development

Formerly Mr John Hall, Acting Deputy Secretary, Corporate Services and Development


The APU continued to play a key role in ensuring the integrity of the procurement process and providing a central focus for the coordination and strategic management of purchasing activity within the Department of Innovation, Industry and Regional Development (DIIRD). The APU conducts an ongoing review of procurement performance to identify areas of improvement and ensures they are promptly addressed.

The APU increased its membership from five to seven to develop a broader perspective of procurement in the department and enhance the skills and experience of the APU.

Other activities undertaken by the APU: – ∑Reviewed DIIRD’s chart of accounts to provide improved financial and procurement reporting for the department.

– ∑Started developing a contract management framework and good practice guide to improve contract management practices. This is due for completion in 2010-11.

– ∑Transitioned users to the new eTender system (Tenders VIC).

– ∑Built contract management skills in the department by promoting PACCER training, with a mandatory requirement for inexperienced contract managers to attend the PACCER contract management course.

Activities planned for 2010-11 include: – ∑Finalising the contract management framework (mentioned above).

– ∑Introducing a procurement training program to increase awareness and knowledge of departmental procurement practices, particularly for new staff. This was originally planned for 2009-10 but was delayed to align with the procurement reform and the new VGPB training strategy.

– ∑Reviewing APU processes to reduce the organisational administrative burden.

– ∑Investigating contract management systems for DIIRD following finalisation of the contract management framework review.

Department of Justice

apu ChairMs Gail Moody Executive Director, Strategic Projects and Planning


In 2009-10, the Department of Justice (DOJ) APU focused on training and raising staff awareness to ensure compliance with procurement policies. This included in-house training sessions and forums, as well as promoting PACCER and mandating the PACCER contract management course for all contract managers.

The department also worked on minimising financial risks by mandating the use of financial risk reports to assess the financial stability of companies before entering into a contractual arrangement. High risk or strategic purchases must also be continually financially monitored.

Other activities undertaken by the APU: – ∑Added a number of environmental products to its range of office supplies such as recycled or recyclable items.

– Implemented recommendations from audits carried out in 2008-09 to ensure alignment with the Financial Management Act and VGPB policies, and continuous improvement of departmental business practice.

– ∑Reviewed and updated the department’s online procurement and contracting content. As a result of this review, the APU is planning to develop a new format for delivering this information.

– Created a procurement toolbox with a self-serve approach for clients, reducing processing time for the APU. The toolbox is due for release in August 2010.

– ∑Held forums for contract managers and procurement officers. Attendees learnt about procurement-related matters and meet subject matter experts.

– ∑Conducted procurement awareness sessions to keep staff informed of policy changes and to refresh procurement knowledge.

Activities planned for 2010-11 include: – ∑Launching the procurement toolbox (mentioned above). – ∑Financial monitoring of companies identified as high risk or companies who are contractually linked to the department. This will allow DOJ to quickly address and limit identified risks.

– ∑Developing procurement induction material and tracking new starters through the department’s learning management system.

– ∑Providing procurement training at prison forums and meetings to raise awareness of procurement policies and procedures. This is a recommendation from a contract management audit carried out in November 2009.

– ∑Reviewing APU processes and benchmarking against other departments with a view to minimising any unnecessary administrative burden on business units and the APU.

Department of Planning and Community Development

apu ChairMr Stephen Gregory Chief Finance Officer, Corporate Finance


The APU extended its membership to ensure a wide range of Department of Planning and Community Development (DPCD) business units are represented and involved in APU activities. DPCD continues to increase procurement capability – all staff involved in procurements above $150 000 attend PACCER courses to the requisite level. The department continues to work on integrating procurement training and accreditation into the DPCD capability framework

Other activities undertaken by the APU: – ∑Revised the department’s procurement policy to align with VGPB policy updates and the Victorian Industry Participation Policy.

– ∑Successfully prepared for the Victorian Auditor-General’s Office audit of the department’s contract publishing systems.

– ∑Continually assessed the DPCD contracts register for improvements to functionality, such as simplifying the management and reporting of contracts (taking into account annual reporting requirements).

– ∑Provided in-house procurement training to improve the quality of APU submissions and ensure greater compliance with VGPB and departmental processes

– ∑Developed and updated the procurement pages on the DPCD intranet to help project managers comply with VGPB and DPCD procurement policies.

Activities planned for 2010-11 include: – ∑Improving the level of procurement expertise through training, assessment and accreditation. In-house training programs will be closely monitored to align with the move towards a national standard in procurement training.

Department of Primary Industries

apu ChairMs Giovanna Tivisini General Counsel, Office of the General Counsel


In 2009-10, the APU improved their response time and turnaround of APU submissions. The APU continues to work with divisions and business units to ensure that Department of Primary Industries (DPI) staff are aware and understand VGPB procurement policies. The contract resource unit is assisting more business units to develop twelve-month procurement plans.

Other activities undertaken by the APU: – ∑Incorporated category and spend analysis in quarterly executive management reporting.

– ∑Engaged senior solicitors early in the negotiation of terms and conditions with vendors for major contracts.

– ∑Implemented a procurement and contract management training strategy to improve access to training across the State.

– ∑Improved management of exemptions by helping staff understand how to research the market and when to appropriately seek an exemption.

Activities planned for 2010-11 include: – ∑Carrying out strategic business planning in early 2010-11 with a focus on improving procurement and contract management.








Department of Treasury and Finance Department of Premier and Cabinet

joint apu ChairDr Ian Gibson General Counsel, DTF Legal


The central agencies of the Department of Treasury and Finance (DTF) and the Department of Premier and Cabinet (DPC) operate with a joint APU, with the nominated chair being from DTF. The APU works closely with its operational arm the contract resourcing unit (CRU).

In 2009-10, the central agencies APU undertook two major strategic initiatives. Firstly, the CRU carried out a major review of all procurement information, creating a new format based on procurement life-cycle and migrating this content from a Lotus Notes database to the DTF intranet. The new process-driven format offers step-by-step guidance and flowcharts for the novice and quick links for experienced procurement practitioners. DPC has full access to this content.

Secondly, the APU began using Tenders VIC for lodgment and closing of tenders, helping to test the functionality and improve site usability before general release to other departments and agencies.

Other activities undertaken by the central agencies APU: – ∑Introduced a new contract management policy to ensure all DPC staff members working in contract management have the appropriate skills to perform in the role. The policy requirements are included in procurement process reports as a checklist designed to assess the contract manager’s capabilities before the procurement is approved. This policy is now being taken up by DTF.

– ∑Created a contract management information session for DTF and DPC staff. The session will assist contract managers, from experienced to novice, to implement good practice.

– ∑Reviewed Government House procurement processes, offering advice where necessary to improve their procurement activities. Government House is in the process of implementing these recommendations.

– ∑Provided tailored procurement training for Victorian Auditor-General’s Office staff to help them meet their requirements under their newly acquired VGPB tier 1 status.

– ∑Developed an evaluation report to help buyers select goods and/or services based on the best possible value for money. The report and accompanying matrix are available on DTF’s intranet.

Activities planned for 2010-11 include: – ∑Implementing a contract management system to improve the management of contracts over $100 000. Contracts will be monitored to ensure all policies are adhered to and expenditure is monitored appropriately.

Department of Sustainability and Environment

apu ChairMs Judy Backhouse Executive Director, Organisational Improvement, Corporate Services

Formerly Kathy Duffy, Executive Director, Organisational Risk, Corporate Services


The APU appointed a new member with knowledge and experience in audit and finance to broaden the skill set of the team. The APU’s expertise extends beyond submissions requiring APU approval as it also looks at a significant number of contracts outside of the APU’s jurisdiction. This includes building and construction related contracts, small variations (less than $100 000) to contracts lower than the APU threshold and purchases from previously approved panels. The Department of Sustainability and Environment (DSE) considers this to be highly beneficial to the business.

Other activities undertaken by the APU: – ∑Assisted the Land and Fire Management Division with developing a process to implement a state-wide panel of civil contractors for fire fighting and general works. Contracts are expected to be signed prior to November 2010.

– ∑Actively participated in the emergency services procurement forum; a forum of Victorian departments and agencies with an emergency service role. The forum will develop opportunities for cooperative purchasing aligned with the Australian Fire and Emergency Services Council. DSE will host the forum scheduled for August 2010.

– Trained staff to facilitate the tender evaluation process for major procurements. This service significantly reduces processing time and improves the quality of documentation.

– ∑Requested procurement plans for larger scale projects to show how different contracts interact with medium and longer term procurement strategies for the projects. This helps reduce submissions, such as variations related to the projects.

– ∑Added a scanned copy of signed contracts to the DSE contract register to reduce processing time and use of paper.

Activities planned for 2010-11 include: – ∑Developing the DSE network of procurement experts. DSE found that having a nominated procurement expert in key business areas significantly improved procurement performance by providing a local contact for advice and assistance. The procurement expert is able to apply quality control at an early stage of procurement activity and maintain a ‘critical mass of knowledge’ by regularly reviewing submissions and supporting project managers.


apu ChairMs Karen Cleave Chief Executive Officer, State Services Authority


The State Services Authority (SSA) continued to review and approve all purchases above $50 000 to ensure compliance with VGPB and SSA policies and guidelines. SSA reviewed the learning and development calendar to ensure staff have access to adequate procurement training.

Other activities undertaken by SSA: – Redesigned the request for tender and request for quotation templates to streamline the application process for suppliers, and updated content to ensure compliance with all relevant directives and legislation.

– Introduced additional business rules and procedures for all purchases of goods and services.

– Monitored and updated the SSA’s procurement and contract management toolkit.

Activities planned for 2010-11 include: – ∑Implementing a new records management system to include procurement checklists and templates for staff to use as part of their project management activities.

Department of Transport

apu ChairMr Bruce Drinkwater Director, Procurement Advisory and Support Services


In 2009-10, the Department of Transport (DOT) undertook a number of major procurements and implemented high priority projects listed in the Victorian Transport Plan. DOT operated a division to oversee the procurement and implementation of the regional rail link, the largest rail project for 40 years. Some of the major procurements included refranchising the metropolitan train and tram services, ongoing procurement of train rolling stock, purchase of tram rolling stock, and procurement of free country school bus services (1 514 service contracts).

Other activities undertaken by the APU: – ∑Upgraded the contract management system to make it more responsive for users.

– ∑Introduced a series of specialist forums (The Art and Science of Procurement) presented by subject matter experts.

– ∑Reviewed expenditure by supplier and/or project to develop strategies to better manage key suppliers.

– ∑Developed a classification of procurement risks relevant to projects being undertaken by DOT. Staff will be briefed in 2010-11.

– ∑Reviewed expenditure and supplier performance of the public transport specialist supplier panel with recommendations for better management of the panel.

– ∑Completed a needs and options assessment of the contracts management system which is nearing the end of its useful life. The APU recommended further upgrading the existing contract management system.

Activities planned for 2010-11 include: – ∑Upgrading the contract management system to meet the requirements of the procurement reform.

– ∑Continuing to develop the Art and Science of Procurement forums.








Department of Treasury and Finance Department of Premier and Cabinet

joint apu ChairDr Ian Gibson General Counsel, DTF Legal


The central agencies of the Department of Treasury and Finance (DTF) and the Department of Premier and Cabinet (DPC) operate with a joint APU, with the nominated chair being from DTF. The APU works closely with its operational arm the contract resourcing unit (CRU).

In 2009-10, the central agencies APU undertook two major strategic initiatives. Firstly, the CRU carried out a major review of all procurement information, creating a new format based on procurement life-cycle and migrating this content from a Lotus Notes database to the DTF intranet. The new process-driven format offers step-by-step guidance and flowcharts for the novice and quick links for experienced procurement practitioners. DPC has full access to this content.

Secondly, the APU began using Tenders VIC for lodgment and closing of tenders, helping to test the functionality and improve site usability before general release to other departments and agencies.

Other activities undertaken by the central agencies APU: – ∑Introduced a new contract management policy to ensure all DPC staff members working in contract management have the appropriate skills to perform in the role. The policy requirements are included in procurement process reports as a checklist designed to assess the contract manager’s capabilities before the procurement is approved. This policy is now being taken up by DTF.

– ∑Created a contract management information session for DTF and DPC staff. The session will assist contract managers, from experienced to novice, to implement good practice.

– ∑Reviewed Government House procurement processes, offering advice where necessary to improve their procurement activities. Government House is in the process of implementing these recommendations.

– ∑Provided tailored procurement training for Victorian Auditor-General’s Office staff to help them meet their requirements under their newly acquired VGPB tier 1 status.

– ∑Developed an evaluation report to help buyers select goods and/or services based on the best possible value for money. The report and accompanying matrix are available on DTF’s intranet.

Activities planned for 2010-11 include: – ∑Implementing a contract management system to improve the management of contracts over $100 000. Contracts will be monitored to ensure all policies are adhered to and expenditure is monitored appropriately.

Department of Sustainability and Environment

apu ChairMs Judy Backhouse Executive Director, Organisational Improvement, Corporate Services

Formerly Kathy Duffy, Executive Director, Organisational Risk, Corporate Services


The APU appointed a new member with knowledge and experience in audit and finance to broaden the skill set of the team. The APU’s expertise extends beyond submissions requiring APU approval as it also looks at a significant number of contracts outside of the APU’s jurisdiction. This includes building and construction related contracts, small variations (less than $100 000) to contracts lower than the APU threshold and purchases from previously approved panels. The Department of Sustainability and Environment (DSE) considers this to be highly beneficial to the business.

Other activities undertaken by the APU: – ∑Assisted the Land and Fire Management Division with developing a process to implement a state-wide panel of civil contractors for fire fighting and general works. Contracts are expected to be signed prior to November 2010.

– ∑Actively participated in the emergency services procurement forum; a forum of Victorian departments and agencies with an emergency service role. The forum will develop opportunities for cooperative purchasing aligned with the Australian Fire and Emergency Services Council. DSE will host the forum scheduled for August 2010.

– Trained staff to facilitate the tender evaluation process for major procurements. This service significantly reduces processing time and improves the quality of documentation.

– ∑Requested procurement plans for larger scale projects to show how different contracts interact with medium and longer term procurement strategies for the projects. This helps reduce submissions, such as variations related to the projects.

– ∑Added a scanned copy of signed contracts to the DSE contract register to reduce processing time and use of paper.

Activities planned for 2010-11 include: – ∑Developing the DSE network of procurement experts. DSE found that having a nominated procurement expert in key business areas significantly improved procurement performance by providing a local contact for advice and assistance. The procurement expert is able to apply quality control at an early stage of procurement activity and maintain a ‘critical mass of knowledge’ by regularly reviewing submissions and supporting project managers.


apu ChairMs Karen Cleave Chief Executive Officer, State Services Authority


The State Services Authority (SSA) continued to review and approve all purchases above $50 000 to ensure compliance with VGPB and SSA policies and guidelines. SSA reviewed the learning and development calendar to ensure staff have access to adequate procurement training.

Other activities undertaken by SSA: – Redesigned the request for tender and request for quotation templates to streamline the application process for suppliers, and updated content to ensure compliance with all relevant directives and legislation.

– Introduced additional business rules and procedures for all purchases of goods and services.

– Monitored and updated the SSA’s procurement and contract management toolkit.

Activities planned for 2010-11 include: – ∑Implementing a new records management system to include procurement checklists and templates for staff to use as part of their project management activities.

Department of Transport

apu ChairMr Bruce Drinkwater Director, Procurement Advisory and Support Services


In 2009-10, the Department of Transport (DOT) undertook a number of major procurements and implemented high priority projects listed in the Victorian Transport Plan. DOT operated a division to oversee the procurement and implementation of the regional rail link, the largest rail project for 40 years. Some of the major procurements included refranchising the metropolitan train and tram services, ongoing procurement of train rolling stock, purchase of tram rolling stock, and procurement of free country school bus services (1 514 service contracts).

Other activities undertaken by the APU: – ∑Upgraded the contract management system to make it more responsive for users.

– ∑Introduced a series of specialist forums (The Art and Science of Procurement) presented by subject matter experts.

– ∑Reviewed expenditure by supplier and/or project to develop strategies to better manage key suppliers.

– ∑Developed a classification of procurement risks relevant to projects being undertaken by DOT. Staff will be briefed in 2010-11.

– ∑Reviewed expenditure and supplier performance of the public transport specialist supplier panel with recommendations for better management of the panel.

– ∑Completed a needs and options assessment of the contracts management system which is nearing the end of its useful life. The APU recommended further upgrading the existing contract management system.

Activities planned for 2010-11 include: – ∑Upgrading the contract management system to meet the requirements of the procurement reform.

– ∑Continuing to develop the Art and Science of Procurement forums.

proCurement training and development



Back to Contents



Back to Contents



The procurement profession is increasingly recognised for its contribution to public sector organisations in terms of delivering best value outcomes through strategic procurement. For more than a decade the Procurement and Contracting Centre for Education and Research (PACCER) has offered the Victorian public sector high-quality procurement and contract management training. PACCER accredited courses align to nationally endorsed competency standards in the Public Sector Training Package (PSP04) under the Australian Qualifications Framework.

Victoria Police

apu ChairKen Lay Deputy Commissioner, Road Policing

Formerly Jenny Peachey, Director, Corporate Strategy and Performance Department


In 2009-10 Victoria Police embarked on a comprehensive change program of its procurement practices. As part of this program, the APU refreshed its membership, broadening representation from a more senior level across the organisation. Victoria Police doubled the number of procurement practitioners in the central group and delivered procurement training to more than 350 employees.

Other activities undertaken by the APU: – ∑Ran employee education programs for more than 350 staff to improve employee competency, knowledge and confidence when undertaking procurement.

– ∑Implemented a new contract management system across the State with user training for more than 50 employees.

– ∑Introduced a risk assessment process for all APU submissions which includes an analysis of whole-of-life costs, policy compliance and strategic fit.

– ∑Finalised approximately 15 five-year corporate procurement strategies with the remainder to be completed by August 2010. This includes the overarching Victoria Police 2010-11 procurement strategy.

– ∑Established an organisational change program to reposition Victoria Police as a ‘best in class’ commercial practitioner across State government agencies with implementation planned to commence incrementally from October 2010.

Activities planned for 2010-11 include: – ∑Independently accrediting Victoria Police’s commercial capability and capacity.

– ∑Creating a set of procurement tools, templates and educational material to help staff understand procurement and how to comply with procurement policies with the aim of improving value-for-money outcomes.

– ∑Introducing procurement and contract risk assessments to ensure procurement and contract management activities are assigned to parties with appropriate levels of competency and capability.

– ∑Delivering a new procurement governance model for Victoria Police by December 2010 with clearly assigned personal accountabilities, minimised bureaucracy and improved overarching sustainable value-for-money outcomes.

attendancePACCER has delivered accredited and non-accredited training programs since its inception in 1997. PACCER offers both public and in-house customised training. In 2009-10, 578 participants attended PACCER programs, exceeding the VGPB annual target of 500 participants.

In 2009-10, a total of 169 participants from across departments and the private sector attended public procurement training sessions as shown in figure 12. PACCER also delivered customised, in-house training programs to 378 departmental participants as shown in figure 13.

winning government businessThe Winning Government Business seminar teaches small to medium size businesses how to access the Victorian Government market. It aims to explain to suppliers how they can best offer their goods or services as well as pricing to win government contracts. The seminar focuses on the supply of goods and services to government.

In May this year, PACCER delivered a seminar in Ballarat to approximately 30 businesses.

Figure 12: attendanCe at publiC paCCer training sessions in 2009-10 Figure 12: Attendance at public PACCER training sessions in 2009-10

COU

RSE NA

ME

Category Management

Contract Management

Probity - Conduct ofCommercial Engagements

Procurement Planningand Tender Preparation

Procurement ThroughQuotation

Strategic Sourcing

Tender Process

Victorian GovernmentPurchasing Policies

Winning GovernmentBusiness

Attended by other

Attended by departments

NUMBER OF PARTICIPANTS

0 5 10 15 20 25 30 35 40




Back to Contents



Back to Contents



The procurement profession is increasingly recognised for its contribution to public sector organisations in terms of delivering best value outcomes through strategic procurement. For more than a decade the Procurement and Contracting Centre for Education and Research (PACCER) has offered the Victorian public sector high-quality procurement and contract management training. PACCER accredited courses align to nationally endorsed competency standards in the Public Sector Training Package (PSP04) under the Australian Qualifications Framework.

Victoria Police

apu ChairKen Lay Deputy Commissioner, Road Policing

Formerly Jenny Peachey, Director, Corporate Strategy and Performance Department


In 2009-10 Victoria Police embarked on a comprehensive change program of its procurement practices. As part of this program, the APU refreshed its membership, broadening representation from a more senior level across the organisation. Victoria Police doubled the number of procurement practitioners in the central group and delivered procurement training to more than 350 employees.

Other activities undertaken by the APU: – ∑Ran employee education programs for more than 350 staff to improve employee competency, knowledge and confidence when undertaking procurement.

– ∑Implemented a new contract management system across the State with user training for more than 50 employees.

– ∑Introduced a risk assessment process for all APU submissions which includes an analysis of whole-of-life costs, policy compliance and strategic fit.

– ∑Finalised approximately 15 five-year corporate procurement strategies with the remainder to be completed by August 2010. This includes the overarching Victoria Police 2010-11 procurement strategy.

– ∑Established an organisational change program to reposition Victoria Police as a ‘best in class’ commercial practitioner across State government agencies with implementation planned to commence incrementally from October 2010.

Activities planned for 2010-11 include: – ∑Independently accrediting Victoria Police’s commercial capability and capacity.

– ∑Creating a set of procurement tools, templates and educational material to help staff understand procurement and how to comply with procurement policies with the aim of improving value-for-money outcomes.

– ∑Introducing procurement and contract risk assessments to ensure procurement and contract management activities are assigned to parties with appropriate levels of competency and capability.

– ∑Delivering a new procurement governance model for Victoria Police by December 2010 with clearly assigned personal accountabilities, minimised bureaucracy and improved overarching sustainable value-for-money outcomes.

attendancePACCER has delivered accredited and non-accredited training programs since its inception in 1997. PACCER offers both public and in-house customised training. In 2009-10, 578 participants attended PACCER programs, exceeding the VGPB annual target of 500 participants.

In 2009-10, a total of 169 participants from across departments and the private sector attended public procurement training sessions as shown in figure 12. PACCER also delivered customised, in-house training programs to 378 departmental participants as shown in figure 13.

winning government businessThe Winning Government Business seminar teaches small to medium size businesses how to access the Victorian Government market. It aims to explain to suppliers how they can best offer their goods or services as well as pricing to win government contracts. The seminar focuses on the supply of goods and services to government.

In May this year, PACCER delivered a seminar in Ballarat to approximately 30 businesses.

Figure 12: attendanCe at publiC paCCer training sessions in 2009-10 Figure 12: Attendance at public PACCER training sessions in 2009-10

COU

RSE NA

ME

Category Management

Contract Management

Probity - Conduct ofCommercial Engagements

Procurement Planningand Tender Preparation

Procurement ThroughQuotation

Strategic Sourcing

Tender Process


Winning GovernmentBusiness

Attended by other

Attended by departments


0 5 10 15 20 25 30 35 40

appendixes







appendixesproCurement websites

Figure 13: attendanCe at Customised paCCer training sessions in 2009-10 Figure 13: Attendance at customised PACCER training sessions in 2009-10

Advanced Tender Evaluation

Contract Management

Category Management

Contract Negotiations

Contract Review

Contracting Strategies

Good Procurement

Introduction to Procurement

Probity in Victorian Government

Procurement Planning

Procurement Planningand Tender Process

Procurement through Quotation

Request for Quotation

Strategic Sourcing

Tender Evaluation

Tender Preparation

Tender Process


Department

Other


COU

RSE NA

ME

0 50 100 150 200

viCtorian loCal government proFessional proCurement programThe professional procurement program (PPP) developed via a partnership between PACCER, Local Government Victoria within DPCD and CIPS Australia started in October 2009.

PPP is an accredited, twelve-month custom-designed training course launched under the Councils Reforming Business (CRB) program in 2009, in partnership with PACCER, DPCD and CIPS Australia. The first group of 17 participants who enrolled in the program in October 2009 will graduate in February 2011. A second group of 14 participants enrolled in April 2010 and will finish in May 2011.

The course is an excellent opportunity for council staff to participate in the most comprehensive training available in Australia for local government procurement professionals, and apply this knowledge to improve council procurement practices.

ProcUrement webSiteSproCurement viCtoriaA one-stop procurement portal for goods and services for government and businesses in Victoria. The portal contains VGPB policies, guidelines, tools and templates, and links to other procurement related websites.

www.procurement.vic.gov.au

PACCER

proCurement and ContraCt management trainingwww.paccer.vic.gov.au

Tenders VIC

all tenders advertised by viCtorian government departments, inCluding listings oF past tenderswww.tenders.vic.gov.au

Contracts VIC

Central register oF major ContraCts awarded by the viCtorian government sinCe 1992www.contracts.vic.gov.au

appendixes







appendixesproCurement websites

Figure 13: attendanCe at Customised paCCer training sessions in 2009-10 Figure 13: Attendance at customised PACCER training sessions in 2009-10

Advanced Tender Evaluation

Contract Management

Category Management

Contract Negotiations

Contract Review

Contracting Strategies

Good Procurement

Introduction to Procurement

Probity in Victorian Government

Procurement Planning

Procurement Planningand Tender Process

Procurement through Quotation

Request for Quotation

Strategic Sourcing

Tender Evaluation

Tender Preparation

Tender Process


Department

Other


COU

RSE NA

ME

0 50 100 150 200

viCtorian loCal government proFessional proCurement programThe professional procurement program (PPP) developed via a partnership between PACCER, Local Government Victoria within DPCD and CIPS Australia started in October 2009.

PPP is an accredited, twelve-month custom-designed training course launched under the Councils Reforming Business (CRB) program in 2009, in partnership with PACCER, DPCD and CIPS Australia. The first group of 17 participants who enrolled in the program in October 2009 will graduate in February 2011. A second group of 14 participants enrolled in April 2010 and will finish in May 2011.

The course is an excellent opportunity for council staff to participate in the most comprehensive training available in Australia for local government procurement professionals, and apply this knowledge to improve council procurement practices.

ProcUrement webSiteSproCurement viCtoriaA one-stop procurement portal for goods and services for government and businesses in Victoria. The portal contains VGPB policies, guidelines, tools and templates, and links to other procurement related websites.

www.procurement.vic.gov.au

PACCER

proCurement and ContraCt management trainingwww.paccer.vic.gov.au

Tenders VIC

all tenders advertised by viCtorian government departments, inCluding listings oF past tenderswww.tenders.vic.gov.au

Contracts VIC

Central register oF major ContraCts awarded by the viCtorian government sinCe 1992www.contracts.vic.gov.au






appendixesglossary

appendixesglossary

gloSSaryAccountable officer refers to the head of any given department, or, for a public body, the chief executive officer (whatever their title) of that body.

Accreditation refers to a system where the VGPB delegates its authority to a department through the accountable officer to allow the department to note, endorse, or approve requisitions up to an accreditation level as agreed by the VGPB. Requisitions above a department’s accreditation level are referred to the VGPB for approval after endorsement by the APU.

Accredited purchasing unit (APU) refers to a body in each department responsible for ensuring that the procurement activities of its department are driven by business needs, and comply with VGPB policy. The APU has authority from the VGPB to approve all purchasing processes that fall within its accreditation limit.

Annual supply report refers to a report to the VGPB from the accountable officer providing information and data relating to the purchase of goods and services.

Breach refers to a case of non-compliance with VGPB policies. Where a breach involves a financial commitment above $150 000, the accountable officer is to report the breach to the VGPB immediately.

Business case refers to the information needed to enable a manager to decide whether to support a proposed project, before significant resources are committed to its development. The core of the business case is an assessment of the costs and benefits of proceeding with a project.

Central agencies refers to the Department of Treasury and Finance and the Department of Premier and Cabinet.

Open state purchase contract (OSPC) refers to a contract established by one department that other departments with a similar need can access. It is similar to an SPC arrangement, but is not mandatory for those departments that have not committed to it. On 17 June 2010, OSPCs were replaced by SEPCs.

Open tender refers to the process of publicly inviting tenders usually through the release of an RFT to the open market.

Outer budget entity refers to government business enterprises, statutory bodies, authorities, corporations, or any entity that is not a department or an administrative office.

Probity means uprightness, honesty, proper and ethical conduct and propriety in dealings. It is often also used in government in a general sense to mean good process.

Procurement refers to all the business processes associated with purchasing, spanning the whole cycle from the identification of needs to the end of a service contract or the end of the useful life and subsequent disposal of an asset. It does not include stores management and logistics that are aspects of the wider subject of supply chain management. Often used interchangeably with purchasing.

Procurement and Contracting Centre for Education and Research (PACCER) refers to the DTF learning centre which provides training in a wide range of procurement skills.

Procurement process refers to the step-by-step process for the planning, establishment and contract management of small and large acquisitions.

Registration of interest (ROI) is used to identify suppliers interested in, and capable of, delivering the required goods or services. Potential suppliers are asked to provide information on their capability to do the work. It is usually the first stage of a multi-stage tender process.

Consultancy refers to a contract to provide services which meet the following criteria:

• expert analysis and advice which facilitates decision making;

• a specific, one-off task or set of tasks;

• a task involving skills or perspectives which would not normally be expected to reside within the department.

Contract refers to an agreement between two or more authorised persons on behalf of their organisations to perform or not perform a specific act that is enforceable in law. A contract may be verbal or written or inferred by conduct.

Contract management refers to all activities at the commencement of, during and after the contract period, to ensure that all contractual obligations are fulfilled.

Contract publishing system refers to a web-based system which provides information about contracts greater than $100 000 entered into by Victorian Government departments and some agencies.

Contract variation refers to an addition or alteration to the goods and/or services under a contract that is within the general scope of the original contract. A contract variation can be documented between the parties with a letter or a deed of variation.

Department refers to a body existing by virtue of an order made under s10 of the Public Sector Management and Employment Act 1998.

Departmental standing offer agreement (DSOA) is a standing offer agreement established by one department for use only by that department. On 17 June 2010, DSOAs were replaced by SEPCs.

eTendering refers to an internet-based electronic tendering system that provides the facility to electronically invite or advertise ROIs and RFTs, distribute ROIs and RFT documents, securely receive, and open tenders, and provide various notices.

Evaluation criteria refers to standards of judgement, and ranking or priority, used to assess offers and compare alternatives put forward by respondents to quotes and tenders.

Request for quotation (RFQ) refers to a written process of inviting offers to supply goods and/or services involving simple documentation and a limited number of potential suppliers.

Request for tender (RFT) refers to a request for offer against a set of clearly defined and specified requirements. Tenderers are advised of all requirements involved, including the conditions of tendering and proposed contract conditions.

Selective tender refers to a two stage approach to the open market involving a registration/expression of interest, followed by a request for tender to a shortlist of registrants who satisfied an assessment of their capability and capacity.

Sole entity purchase contract (SEPC) is a procurement arrangement established when a sole department has a specific requirement for frequently purchased goods and services. SEPCs are mandatory contracts for the department establishing the procurement arrangement.

Software licence enterprise agreements (SLEAs) are agreements to supply multiple software licences and associated services on a WoVG or departmental basis.

Standing offer agreement (SOA) refers to an agreement for commonly used goods and services, and is used to provide more effective and efficient procurement. It covers a set period of time, and usually requires no obligation on the State to purchase a particular quantity of the goods or services from the supplier. As a group it includes SPCs, OSPCs, DSOAs and SLEAs. Purchases can be made from the SOA by complying with the SOA’s rules of use. On 17 June 2010, SOAs were replaced by SEPCs.

State purchase contract (SPC) refers to a mandatory standing offer agreement for departments for the purchase of goods and services, which is subject to VGPB procurement policies. The purpose of SPCs is to pursue WoVG contracts to achieve the best value for money outcomes, and make best use of the State’s aggregated purchasing power.


Financial delegate refers to a person authorised by the Minister to make general or specified decisions constrained only by the instrument of financial delegation. Specifically, financial delegates commit and incur expenditure, and sign contracts.

Financial delegation refers to a power handed down to a second party to act on their own behalf, but not including power to further delegate. The second party is responsible for actions arising from their use of such power.

Intellectual property (IP) is the term for property rights such as: patents, trademarks, design, confidential information, copyrights, and know-how.

Liability cap refers to an arrangement whereby a supplier’s liability for damage or loss incurred by the agency is limited to a certain amount.

Liability means a debt or responsibility; an obligation that may arise by a contract made or by a tort committed.

Limited tendering refers to the approach to one or a limited number of potential suppliers in special circumstances after obtaining an exemption form from the accountable officer or delegate for not having to conduct an open tender or selective tender.

One-off supply refers to a purchase of a specific quantity of goods or services, which has been subject to a discrete quotation or tender process.

Open standing offer arrangement (OSOA) is a standing offer agreement established by one department that is accessible by other departments with a similar need. On 17 June 2010, OSOAs were replaced by SEPCs.

Strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts and draws a strategic connection between the higher level project planning and implementation through procurement.

Strategic sourcing refers to the strategies and mechanisms used to approach and interact with the supply market that take account of both present and future business needs.

Tender refers to a document in the form of an offer to supply goods and/or services, usually submitted in response to a public or selective invitation such as an RFT.

Tender box refers to a secure location within which tenders, offers, quotations or bids are placed.

Tenders VIC refers to the website provided by Department of Treasury and Finance for advertising all government tenders.

Variation – refer to contract variation

Victorian Government Purchasing Board (VGPB) refers to the government entity that develops and approves procurement policies, approves major referrals for goods and services from departments, and discusses related procurement policy and practice matters.

Victorian Industry Participation Policy (VIPP) refers to the policy document that aims to ensure that options for local supply are adequately considered.






appendixesglossary

appendixesglossary

gloSSaryAccountable officer refers to the head of any given department, or, for a public body, the chief executive officer (whatever their title) of that body.

Accreditation refers to a system where the VGPB delegates its authority to a department through the accountable officer to allow the department to note, endorse, or approve requisitions up to an accreditation level as agreed by the VGPB. Requisitions above a department’s accreditation level are referred to the VGPB for approval after endorsement by the APU.

Accredited purchasing unit (APU) refers to a body in each department responsible for ensuring that the procurement activities of its department are driven by business needs, and comply with VGPB policy. The APU has authority from the VGPB to approve all purchasing processes that fall within its accreditation limit.

Annual supply report refers to a report to the VGPB from the accountable officer providing information and data relating to the purchase of goods and services.

Breach refers to a case of non-compliance with VGPB policies. Where a breach involves a financial commitment above $150 000, the accountable officer is to report the breach to the VGPB immediately.

Business case refers to the information needed to enable a manager to decide whether to support a proposed project, before significant resources are committed to its development. The core of the business case is an assessment of the costs and benefits of proceeding with a project.

Central agencies refers to the Department of Treasury and Finance and the Department of Premier and Cabinet.

Open state purchase contract (OSPC) refers to a contract established by one department that other departments with a similar need can access. It is similar to an SPC arrangement, but is not mandatory for those departments that have not committed to it. On 17 June 2010, OSPCs were replaced by SEPCs.

Open tender refers to the process of publicly inviting tenders usually through the release of an RFT to the open market.

Outer budget entity refers to government business enterprises, statutory bodies, authorities, corporations, or any entity that is not a department or an administrative office.

Probity means uprightness, honesty, proper and ethical conduct and propriety in dealings. It is often also used in government in a general sense to mean good process.

Procurement refers to all the business processes associated with purchasing, spanning the whole cycle from the identification of needs to the end of a service contract or the end of the useful life and subsequent disposal of an asset. It does not include stores management and logistics that are aspects of the wider subject of supply chain management. Often used interchangeably with purchasing.

Procurement and Contracting Centre for Education and Research (PACCER) refers to the DTF learning centre which provides training in a wide range of procurement skills.

Procurement process refers to the step-by-step process for the planning, establishment and contract management of small and large acquisitions.

Registration of interest (ROI) is used to identify suppliers interested in, and capable of, delivering the required goods or services. Potential suppliers are asked to provide information on their capability to do the work. It is usually the first stage of a multi-stage tender process.

Consultancy refers to a contract to provide services which meet the following criteria:

• expert analysis and advice which facilitates decision making;

• a specific, one-off task or set of tasks;

• a task involving skills or perspectives which would not normally be expected to reside within the department.

Contract refers to an agreement between two or more authorised persons on behalf of their organisations to perform or not perform a specific act that is enforceable in law. A contract may be verbal or written or inferred by conduct.

Contract management refers to all activities at the commencement of, during and after the contract period, to ensure that all contractual obligations are fulfilled.

Contract publishing system refers to a web-based system which provides information about contracts greater than $100 000 entered into by Victorian Government departments and some agencies.

Contract variation refers to an addition or alteration to the goods and/or services under a contract that is within the general scope of the original contract. A contract variation can be documented between the parties with a letter or a deed of variation.

Department refers to a body existing by virtue of an order made under s10 of the Public Sector Management and Employment Act 1998.

Departmental standing offer agreement (DSOA) is a standing offer agreement established by one department for use only by that department. On 17 June 2010, DSOAs were replaced by SEPCs.

eTendering refers to an internet-based electronic tendering system that provides the facility to electronically invite or advertise ROIs and RFTs, distribute ROIs and RFT documents, securely receive, and open tenders, and provide various notices.

Evaluation criteria refers to standards of judgement, and ranking or priority, used to assess offers and compare alternatives put forward by respondents to quotes and tenders.

Request for quotation (RFQ) refers to a written process of inviting offers to supply goods and/or services involving simple documentation and a limited number of potential suppliers.

Request for tender (RFT) refers to a request for offer against a set of clearly defined and specified requirements. Tenderers are advised of all requirements involved, including the conditions of tendering and proposed contract conditions.

Selective tender refers to a two stage approach to the open market involving a registration/expression of interest, followed by a request for tender to a shortlist of registrants who satisfied an assessment of their capability and capacity.

Sole entity purchase contract (SEPC) is a procurement arrangement established when a sole department has a specific requirement for frequently purchased goods and services. SEPCs are mandatory contracts for the department establishing the procurement arrangement.

Software licence enterprise agreements (SLEAs) are agreements to supply multiple software licences and associated services on a WoVG or departmental basis.

Standing offer agreement (SOA) refers to an agreement for commonly used goods and services, and is used to provide more effective and efficient procurement. It covers a set period of time, and usually requires no obligation on the State to purchase a particular quantity of the goods or services from the supplier. As a group it includes SPCs, OSPCs, DSOAs and SLEAs. Purchases can be made from the SOA by complying with the SOA’s rules of use. On 17 June 2010, SOAs were replaced by SEPCs.

State purchase contract (SPC) refers to a mandatory standing offer agreement for departments for the purchase of goods and services, which is subject to VGPB procurement policies. The purpose of SPCs is to pursue WoVG contracts to achieve the best value for money outcomes, and make best use of the State’s aggregated purchasing power.


Financial delegate refers to a person authorised by the Minister to make general or specified decisions constrained only by the instrument of financial delegation. Specifically, financial delegates commit and incur expenditure, and sign contracts.

Financial delegation refers to a power handed down to a second party to act on their own behalf, but not including power to further delegate. The second party is responsible for actions arising from their use of such power.

Intellectual property (IP) is the term for property rights such as: patents, trademarks, design, confidential information, copyrights, and know-how.

Liability cap refers to an arrangement whereby a supplier’s liability for damage or loss incurred by the agency is limited to a certain amount.

Liability means a debt or responsibility; an obligation that may arise by a contract made or by a tort committed.

Limited tendering refers to the approach to one or a limited number of potential suppliers in special circumstances after obtaining an exemption form from the accountable officer or delegate for not having to conduct an open tender or selective tender.

One-off supply refers to a purchase of a specific quantity of goods or services, which has been subject to a discrete quotation or tender process.

Open standing offer arrangement (OSOA) is a standing offer agreement established by one department that is accessible by other departments with a similar need. On 17 June 2010, OSOAs were replaced by SEPCs.

Strategic procurement plan (SPP) refers to a detailed plan for a proposed procurement process. It outlines the procurement strategy for major contracts and draws a strategic connection between the higher level project planning and implementation through procurement.

Strategic sourcing refers to the strategies and mechanisms used to approach and interact with the supply market that take account of both present and future business needs.

Tender refers to a document in the form of an offer to supply goods and/or services, usually submitted in response to a public or selective invitation such as an RFT.

Tender box refers to a secure location within which tenders, offers, quotations or bids are placed.

Tenders VIC refers to the website provided by Department of Treasury and Finance for advertising all government tenders.

Variation – refer to contract variation

Victorian Government Purchasing Board (VGPB) refers to the government entity that develops and approves procurement policies, approves major referrals for goods and services from departments, and discusses related procurement policy and practice matters.

Victorian Industry Participation Policy (VIPP) refers to the policy document that aims to ensure that options for local supply are adequately considered.






appendixesFigures and tables

appendixesaCronyms

acronymSAPCC Australasian Procurement and Construction Council

APU Accredited purchasing unit

CIP Critical incident procurement

CIPS Chartered Institute of Purchasing and Supply

DEECD Department of Education and Early Childhood Development

DHS Department of Human Services

DIIRD Department of Innovation, Industry and Regional Development

DOJ Department of Justice

DOT Department of Transport

DPC Department of Premier and Cabinet

DPCD Department of Planning and Community Development

DPI Department of Primary Industries

DSE Department of Sustainability and Environment

DTF Department of Treasury and Finance

GSD Government Services Division

IP Intellectual property

OSOA Open standing offer agreement

OSPC Open state purchase contract

PACCER Procurement and Contracting Centre for Education and Research

ROI Registration of interest

RFQ Request for quotation

RFT Request for tender

SEPC Sole entity purchase contract

SOA Standing offer agreement

SPC State purchase contract

SSA State Services Authority

VGPB Victorian Government Purchasing Board

VicPol Office of the Chief Commissioner of Police (Victoria Police)

VIPP Victorian Industry Participation Policy

WoVG Whole of Victorian Government

figUreS and tableSlist oF Figures

Figure 1: The VGPB reporting relationship 08

Figure 2: Value of total one-off supply approvals by procurement process from 2005-06 to 2009-10 14

Figure 3: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10 15

Figure 4: Average value of one-off supply approvals by procurement process from 2005-06 to 2009-10 16

Figure 5: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10 18

Figure 6: Number of total one-off supply approvals by category from 2005-06 to 2009-10 19

Figure 7: Departmental comparison of one-off supply approvals in 2009-10 by value 29

Figure 8: Departmental comparison of one-off supply approvals in 2009-10 by number 30

Figure 9: Value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 31

Figure 10: Number of one-off supply approvals by department from 2005-06 to 2009-10 31

Figure 11: Average value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 32

Figure 12: Attendance at public PACCER training sessions in 2009-10 41

Figure 13: Attendance at customised PACCER training sessions in 2009-10 42







appendixesaCronyms

acronymSAPCC Australasian Procurement and Construction Council

APU Accredited purchasing unit

CIP Critical incident procurement

CIPS Chartered Institute of Purchasing and Supply

DEECD Department of Education and Early Childhood Development

DHS Department of Human Services

DIIRD Department of Innovation, Industry and Regional Development

DOJ Department of Justice

DOT Department of Transport

DPC Department of Premier and Cabinet

DPCD Department of Planning and Community Development

DPI Department of Primary Industries

DSE Department of Sustainability and Environment

DTF Department of Treasury and Finance

GSD Government Services Division

IP Intellectual property

OSOA Open standing offer agreement

OSPC Open state purchase contract

PACCER Procurement and Contracting Centre for Education and Research

ROI Registration of interest

RFQ Request for quotation

RFT Request for tender

SEPC Sole entity purchase contract

SOA Standing offer agreement

SPC State purchase contract

SSA State Services Authority

VGPB Victorian Government Purchasing Board

VicPol Office of the Chief Commissioner of Police (Victoria Police)

VIPP Victorian Industry Participation Policy

WoVG Whole of Victorian Government

figUreS and tableSlist oF Figures

Figure 1: The VGPB reporting relationship 08

Figure 2: Value of total one-off supply approvals by procurement process from 2005-06 to 2009-10 14

Figure 3: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10 15

Figure 4: Average value of one-off supply approvals by procurement process from 2005-06 to 2009-10 16

Figure 5: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10 18

Figure 6: Number of total one-off supply approvals by category from 2005-06 to 2009-10 19

Figure 7: Departmental comparison of one-off supply approvals in 2009-10 by value 29

Figure 8: Departmental comparison of one-off supply approvals in 2009-10 by number 30

Figure 9: Value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 31

Figure 10: Number of one-off supply approvals by department from 2005-06 to 2009-10 31

Figure 11: Average value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 32

Figure 12: Attendance at public PACCER training sessions in 2009-10 41

Figure 13: Attendance at customised PACCER training sessions in 2009-10 42

Back to Contents



Back to Contents


Table 1: Administrative offices bound by VGPB policies 08

Table 2: Accreditation tiers 09

Table 3: APU accreditation levels, 30 June 2010 09

Table 4: Changes to the public tender threshold from 2005 to 2010 12

Table 5: Number and value of one-off supply approvals by procurement process in 2009-10 compared with the five-year average 13

Table 6: Value of total one-off supply approvals by procurement process from 2005-06 to 2009-10 14

Table 7: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10 15

Table 8: Average value ($ million) of one-off supply approvals by procurement process from 2005-06 to 2009-10 16

Table 9: Number and value of one-off supply approvals by goods and services in 2009-10 compared with the five-year average 17

Table 10: Breakdown of variations into goods, services and consultancies in 2009-10 17

Table 11: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10 18

Table 12: Number and value ranges of one-off supply approvals by goods and services in 2009-10 19

Table 13: Number of one-off supply approvals by goods and services from 2005-06 to 2009-10 19

Table 14: Exceptional procurement approvals in 2009-10 20

Table 15: Number and value of critical incident procurement approvals by goods and services in 2009-10 21

Table 16: Number and estimated potential value of SPCs approved in 2009-10 22

Table 17: Number and estimated potential value of OSPCs approved in 2009-10 23

Table 18: Number and estimated potential value of DSOAs approved in 2009-10 23


Table 20: Number and planned estimated value of SPPs approved in 2009-10 26

Table 21: Number and value of one-off supply contracts by department in 2009-10 compared with the five-year average 28

Table 22: Value of one-off supply approvals by department from 2005-06 to 2009-10 29

Table 23: Number of one-off supply approvals by department from 2005-06 to 2009-10 30

Table 24: Average value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 32

Table 25: Compliance with VGPB procurement policies in 2009-10 33

list oF tables

The annual report is printed on Impact 100 per cent recycled paper sourced from an internationally certified pulp plantation. Impact is made from 100 per cent post consumer waste. It is manufactured carbon neutral and processed free of chlorine bleached fibres (Process Chlorine Free).

Back to Contents



Back to Contents


Table 1: Administrative offices bound by VGPB policies 08

Table 2: Accreditation tiers 09

Table 3: APU accreditation levels, 30 June 2010 09

Table 4: Changes to the public tender threshold from 2005 to 2010 12

Table 5: Number and value of one-off supply approvals by procurement process in 2009-10 compared with the five-year average 13

Table 6: Value of total one-off supply approvals by procurement process from 2005-06 to 2009-10 14

Table 7: Number of total one-off supply approvals by procurement process from 2005-06 to 2009-10 15

Table 8: Average value ($ million) of one-off supply approvals by procurement process from 2005-06 to 2009-10 16

Table 9: Number and value of one-off supply approvals by goods and services in 2009-10 compared with the five-year average 17

Table 10: Breakdown of variations into goods, services and consultancies in 2009-10 17

Table 11: Value of total one-off supply approvals by goods and services from 2005-06 to 2009-10 18

Table 12: Number and value ranges of one-off supply approvals by goods and services in 2009-10 19

Table 13: Number of one-off supply approvals by goods and services from 2005-06 to 2009-10 19

Table 14: Exceptional procurement approvals in 2009-10 20

Table 15: Number and value of critical incident procurement approvals by goods and services in 2009-10 21

Table 16: Number and estimated potential value of SPCs approved in 2009-10 22


Table 18: Number and estimated potential value of DSOAs approved in 2009-10 23


Table 20: Number and planned estimated value of SPPs approved in 2009-10 26

Table 21: Number and value of one-off supply contracts by department in 2009-10 compared with the five-year average 28

Table 22: Value of one-off supply approvals by department from 2005-06 to 2009-10 29

Table 23: Number of one-off supply approvals by department from 2005-06 to 2009-10 30

Table 24: Average value ($ million) of one-off supply approvals by department from 2005-06 to 2009-10 32

Table 25: Compliance with VGPB procurement policies in 2009-10 33

list oF tables

The annual report is printed on Impact 100 per cent recycled paper sourced from an internationally certified pulp plantation. Impact is made from 100 per cent post consumer waste. It is manufactured carbon neutral and processed free of chlorine bleached fibres (Process Chlorine Free).


ANNUAL REPORT 2009-10ACHIEVING EXCELLENCE IN GOVERNMENT PROCUREMENT

www.procurement.vic.gov.auwww.procurement.vic.gov.au

Back to Contents

Documents

VICTORIAN GOVERNMENT ANNUAL REPORT 2009 … REPORT 2009-10 ... of the Financial Management Act 1994, this annual report ... in 2009-10, the victorian government purchasing board