Non-Standard Commercial Arrangements (Public Construction – Guidance 7.2.2)

This Guidance explains what Non-Standard Commercial Arrangements are in public construction and how they are approved.

Effective date: 1 July 2018

Objective: To explain what Non-Standard Commercial Arrangements are and how they are approved

Summary

Commercial agreements may create precedents for future procurements undertaken by other Agencies. Contract terms or conditions that may materially impact future procurements require approval.

This Guidance describes what Non-Standard Commercial Arrangements are and when they require approval.

What are Non-standard commercial arrangements

A Non-Standard Commercial Arrangement is a term or condition in a contract or deed, including the contents of binding schedules or annexures, that:

  • in any way contravenes the Ministerial Directions or the Instructions; or
  • in all of the circumstances is highly unusual for a procurement of that type and Procurement Model as procured by a prudent Agency;

and that is so material as to have potential to impact that market segment generally or contracting practices by the State of Victoria as a whole.

For example, a contract that:

  • does not satisfy a mandatory Government policy;
  • does not require standard insurances commonly used in that industry sector; or
  • contains unique arrangements (for example, industrial arrangements) not commonly used in that industry sector.

Approval of Non-standard commercial arrangements

Where non-standard commercial arrangements are being considered these must only be proposed or agreed to by the Agency following approval by the Secretary of the Department of Treasury and Finance or a person authorised in writing by the Secretary.

The Accountable Officer should request approval in writing to the Secretary to the Department of Treasury and Finance, or a person authorised in writing by the Secretary, specifying:

  • the nature of the proposed arrangement;
  • how the proposed arrangement arose; and
  • reasons why the proposed arrangement should be approved.

Tools and support

The Practitioners Toolkit includes key documents, guidance and information about the Ministerial Directions and Instructions for public construction.

For further information about the Ministerial Directions and Instructions for public construction procurement, please contact the Construction Policy Team.

Reviewed 24/07/2018
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