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Your board’s obligations to oversee procurement in your entity.

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.

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 policiesExternal Link 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:

  1. value for money, based on financial and non-financial factors
  2. probity through procurement processes that emphasise ethical behaviour, fairness and transparency
  3. accountability with appropriate levels of responsibility and authority
  4. 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 GuidelinesExternal Link Develop investment projects in Victoria.
Investment Management StandardExternal Link Direct their resources and achieve the best outcomes for investments.
Public Private Partnerships PolicyExternal Link Develop contracts through public-private partnerships.
Market-led Proposals GuidelineExternal Link Manage infrastructure and service proposals from the private sector.
Gateway Review ProcessExternal Link

Examine projects at 6 key decision points in their lifecycle.

Local Jobs First policyExternal Link

Support Victorian businesses and workers.

Social Procurement FrameworkExternal Link Meet Victoria’s approach to social procurement.
Supplier Code of ConductExternal Link Ensure services are provided by suppliers that meet a set of minimum ethical standards.
ICT Procurement Policy and StandardsExternal Link Understand Victoria’s approach to IT procurement.
Shared service provider engagementsExternal Link Understand how to engage internal service providers such as for IT support or facilities management.
International free trade agreementsExternal Link Meet obligations under Australia’s free trade agreements with other countries.
Building Equality policyExternal Link 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 entityExternal Link .

If their policies don’t apply to your entity, it’s still a good idea to align with the goods and services supply policiesExternal Link .

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 VictoriaExternal Link .

Checklist to self-assess

Use the VGPB’s procurement checklistExternal Link 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 ConstructionExternal Link set out the framework for procuring:

  • works and construction services for government buildings
  • infrastructure projects in Victoria.

Go to the Buying for VictoriaExternal Link 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.

Reviewed 19 August 2022

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