Victoria’s broader public governance, financial management and accountability framework
The guidance on public construction procurement is part of Victoria's broader public governance, financial management and accountability framework. It is intended to complement the broader frameworks, and should be read in conjunction with the requirements of this broader framework. The Ministerial Directions for public construction set out the requirements applicable to Public Construction Procurement in Victoria, that is, procuring Works and/or Construction Services.
Some Agencies that must comply with these Directions must also comply with the Victorian Government Purchasing Board's (VGPB) supply policies, which apply to non-Public Construction Procurement. It is for the Accountable Officer of the relevant Agency to decide whether and how to align internal governance frameworks for procurement, noting that where the Ministerial Directions for public construction are inconsistent with the requirements of a supply policy issued by the Victorian Government Purchasing Board, the requirements of these Directions prevail in relation to public construction procurement.
Key elements of Victoria's broader public financial management and governance framework:
- Public Administration Act 2004
- Audit Act 1994
- Independent Broad-based Anti-corruption Commission Act 2011
- Financial Management Act 1994
Ministerial Directions and equivalent issued under legislation:
- Victorian Public Sector Codes of Conduct issued by the Victorian Public Sector Commission under the Public Administration Act 2004
- Standing Directions of the Minister for Finance issued under the Financial Management Act along with the associated Instructions and Guidance
- Ministerial Directions issued under the Project Development and Construction Management Act 1994 and the associated Instructions and Guidance
- Supply policies issued by the Victorian Government Purchasing Board under Part 7A of the Financial Management Act 1994
- Asset Management Accountability Framework
- Policies applicable to procurement delivery methods:
- Victoria Supplier Code of Conduct 2016
The Project Development and Construction Management Act 1994 defines public construction is any construction, maintenance, rehabilitation, alteration, extension or demolition of any improvements on land by, or on behalf of, departments and public bodies and includes:
- design and construction practices,
- tendering processes,
- project delivery,
- contract administration.
The Practice Note – Guidance on what is public construction helps public construction procurement practitioners determine when a procurement is ‘public construction’.
Legislation and policies applying to public construction
The Project Development and Construction Management Act 1994 facilitates government development projects in Victoria. It provides for the responsible Minister to set standards and issue written directions in relation to public construction.
Other Victorian Government legislation relevant to public construction projects include:
- Building Act 1993
- Building and Construction Industry Security of Payment Act 2002
- Architects Act 1991
- Occupational Health and Safety Act 2004
- Domestic Building Contracts Act 1995
- Planning and Environment Act 1987
- Heritage Act 1995
More details on Victorian legislation and parliamentary documents are available from the Victorian Legislation and Parliamentary Documents website
Other codes, policies and agreements which apply to public construction in Victoria include:
- Victorian Industry Participation Policy
- Major Project Skills Guarantee
- Australian Government Building and Construction OH&S Accreditation Scheme
- International agreements, such as the Australia-United States Free Trade Agreement.
Although Australia is now party to a number of Free Trade Agreements that create obligations for government procurement, the Australia United States Free Trade Agreement is a good reference point for understanding those obligations.
The Australia United States Free Trade Agreement sets out rules, procedures and transparency requirements for government purchasing, with the aim of providing United States businesses non-discriminatory access to Australia's Commonwealth, state and territory government procurement markets.
Similarly, Australian businesses are provided wide-ranging access to USA markets.
The Australia United States Free Trade Agreement applies whenever the cost of Victorian public construction procurement is estimated to equal or exceed specified financial thresholds. Under the agreement the financial thresholds are adjusted every two years.
The current financial thresholds for public construction, effective from 1 January 2018 are:
- AUD$9,247,000 for building and construction works; or
- AUD$657,000 for construction related consultancy services.
For further information, refer to Understanding the Australia United States Free Trade Agreement.
The Guide to the Australia-United States Free trade Agreement contains more information for Victorian Government departments. The Guide should be read in conjunction with Ministerial Direction No. 1 - Tendering Provisions for Public Construction and the Guide to Ministerial Direction No. 1.
Status of the Victorian Code
On 18 January 2015, the Victorian Government announced the abolition of the Victorian Code of Practice for the Building and Construction Industry (Victorian Code) and its monitoring body, the Construction Code Compliance Unit.
The Victorian Code no longer applies on any projects.
Please refer to the FAQ sheet for further information.
For more information about legislation, policy and public construction contact the Construction Policy team.