Procurement reform in DTF

Overview

A framework designed to support a more strategic and more efficient approach to procurement.


Procurement reform in DTF

In February 2013, the Victorian Government Purchasing Board (VGPB introduced a new policy framework. This framework is designed to  support a more strategic and more efficient approach to procurement. It is underpinned by high standards of probity, accountability and flexibility with a strong focus on value for money, more interactive engagement with the market and productivity improvement.

All government Departments and offices subject to VGPB policy must transition to the new procurement framework over the next 12-18 months. The Department of Treasury and Finance transitioned to operate under the new framework on 1 July 2013, the first department to do so.

Policies

The VGPB’s new procurement framework is supported by five policies. They are:

Governance: Governance structure embeds procurement across the organisation and ensures alignment with business planning. It encompasses greater focus on upfront strategic planning and transparency to provide consistency of market approach and better value-for-money procurement decisions.

Complexity and capability assessment: Procurement decisions based on an assessment of complexity and the capability of the entity to conduct the procurement. Procurement can only proceed when an organisation determines it has the necessary capability to meet the complexity of the procurement activity.

Market analysis and review: Market analysis determines the capacity of the market to supply and the opportunities for market-based solutions. A review of requirements and processes in response to market analysis determines the most appropriate path to market.

Market approach: Applying a structured, measured approach to informing, evaluating and negotiating with suppliers.

Contract management and contract disclosure: Contract management is escalated to a high-level consideration early in the planning process to arrive at an integrated end-to-end procurement framework.

Directives

In addition, the VGPB requires departments to ensure that all procurement activity meets the following directives:

Value for money: A balanced judgement of a range of financial and non-financial factors, taking into account the mix of quality, cost and resources; fitness for purpose; total cost of ownership; and risk.

Accountability: The Accountable Officer has the flexibility to conduct procurement activities using appropriate capability to provide value-for-money outcomes.

Probity: High standards of behaviour and actions in the conduct of procurement processes, including equity, confidentiality, avoiding conflicts of interest, and consumer/supplier confidence in the integrity of government procurement processes.

Scalability: The relationship between the complexity of a procurement project and the capability of the organisation to conduct it to achieve a good procurement outcome.

All procurement undertaken by the Department will be in line with the above. During the transition period, this may mean that procurements are done very differently by DTF than other Departments.