Every public sector entity does procurement.
It’s a significant corruption risk as entities must make decisions about purchasing and selecting suppliers.
Your board must ensure your entity:
- manages the risk through transparency, accountability and strong oversight of procurement processes
- follows robust and up-to-date procurement policies with the principles, processes and procedures that apply when purchasing goods and services and construction works and services.
- trains employees so they understand and comply with procurement policies that apply to your entity.
Your board should determine what procurement reports it needs to receive, based on the scale and risk of the procurement activity.
Aim of your procurement policy
At a minimum, your entity’s procurement policies must ensure that it:
- takes consistent and transparent actions
- documents decisions properly
- maintains an audit trail with enough information for independent review and verification
- segregates duties to avoid one employee having end-to-end control over decision-making and approvals
- has employees declare and actively manage conflicts of interest
- has independent checks and approvals to ensure probity
- awards contracts after a competitive tender process where required.
Conflict of interest and procurement
Your board must ensure your entity has a policy for employees and board directors on how to identify, declare and manage conflicts of interest(opens in a new window).
Audits and procurement
Your board needs to regularly include procurement in its internal audits.
Link the frequency of internal audits to the level of risk in your entity’s activities.
Use these audits to:
- review your entity’s procurement policy and process
- check that government policy requirements are being met
- identify gaps and risks, such as corruption.
Victorian Government procurement policies
Your board needs to be familiar with Victorian Government procurement policies(opens in a new window) and ensure your entity follows these where relevant.
This includes:
- policy frameworks for goods and services (under the Victorian Government Purchasing Board)
- policy frameworks for construction works and services (under Ministerial Directions and Instructions administered by DTF)
- other applicable Victorian Government procurement policies and commitments.
The policy frameworks for goods and services and construction works and services say that entities must base their procurement on 4 principles. These are:
- value for money, based on financial and non-financial factors
- probity through procurement processes that emphasise ethical behaviour, fairness and transparency
- accountability with appropriate levels of responsibility and authority
- scalability so that policies and processes reflect how complex a procurement is and how capable an entity is to achieve a good outcome.
Other applicable procurement policies and commitments include:
| The asset is | Which supports entities to |
|---|---|
| Investment lifecycle and High Value/High Risk Guidelines(opens in a new window) | Develop investment projects in Victoria. |
| Investment Management Standard(opens in a new window) | Direct their resources and achieve the best outcomes for investments. |
| Public Private Partnerships Policy(opens in a new window) | Develop contracts through public-private partnerships. |
| Market-led Proposals Guideline(opens in a new window) | Manage infrastructure and service proposals from the private sector. |
| Gateway Review Process(opens in a new window) |
Examine projects at 6 key decision points in their lifecycle. |
| Local Jobs First policy(opens in a new window) |
Support Victorian businesses and workers. |
| Social Procurement Framework(opens in a new window) | Meet Victoria’s approach to social procurement. |
| Supplier Code of Conduct(opens in a new window) | Ensure services are provided by suppliers that meet a set of minimum ethical standards. |
| ICT Procurement Policy and Standards(opens in a new window) | Understand Victoria’s approach to IT procurement. |
| Shared service provider engagements(opens in a new window) | Understand how to engage internal service providers such as for IT support or facilities management. |
| International free trade agreements(opens in a new window) | Meet obligations under Australia’s free trade agreements with other countries. |
| Building Equality policy(opens in a new window) | Create training and employment opportunities for women in construction. |
The Victorian Government Purchasing Board’s (VGPB) procurement framework
The VGPB sets policies on the procurement of goods and services for all departments and some entities.
Go to VGPB’s website to check if the policies apply to your entity(opens in a new window).
If their policies don’t apply to your entity, it’s still a good idea to align with the goods and services supply policies(opens in a new window).
This is because their policies are best practice for the public sector.
Policies in VGPB’s goods and services framework
There are 5 policies that make up the VGPB’s goods and services policy framework.
The governance policy outlines the structures and key roles your entity needs to have in place to support its procurement function.
This includes important documents that provide the basis of how your entity’s procurement function operates.
The remaining 4 policies detail the steps an entity would follow when undertaking procurement.
They are:
- Complexity and capability assessment policy
- Market analysis and review policy
- Market approach policy
- Contract management and disclosure policy.
View these policies at Buying for Victoria(opens in a new window).
Checklist to self-assess
Use the VGPB’s procurement checklist(opens in a new window) to see how aligned your entity is to their goods and services framework.
This may help your board assess your entity’s capability and identify any areas for improvement.
Procurement of construction works and services
The Ministerial Directions and Instructions for Public Construction(opens in a new window) set out the framework for procuring:
- works and construction services for government buildings
- infrastructure projects in Victoria.
Go to the Buying for Victoria(opens in a new window) to check if these directions apply to your entity.
If the directions apply to your entity, you need to ensure your entity complies with them when procuring construction works and services.
Updated