The scope of the Victorian Government Purchasing Board’s (VGPB) power and functions is set to expand beyond departments to include special entities under an amendment bill currently before the Victorian Parliament.
The State Taxation and Financial Legislation Amendment Bill (2013) proposes changes to a number of Acts including the Financial Management Act (1994)(FMA) under which the VGPB was established.
The VGBP develops, implements and reviews procurement policies and monitors Department’s compliance with supply policies.
The FMA currently stipulates the way all Victorian departments and 12 other government entities must conduct their procurements including the fact that an accountable officer (AO) (who is usually the Departmental head) must develop a procurement strategy. This is reviewed annually by the VGPB to ensure the organisation is capable of managing its own procurement.
In addition, the VGPB outlines the approach to market that must be taken for at differing thresholds:
- Up to 2,500- one written or verbal quote
- Between $2,500 and $25,000- one written quote
- Between $25,000 and $150,000- three written quotes
- More than $150,000- public tender
According to Hansard documents the amendments mean that “specific entities that are not departments or administrative offices which undertake a considerable volume of goods and services procurement but are not currently subject to the procurement provisions of the VGPB can be required to comply with those provisions”.
The twelve entities currently required to comply with the VGPB are all relatively small ICT consumers:
- Essential Services Commission;
- Office of Police Integrity;
- Office of Public Prosecutions;
- Office of the Chief Commissioner of Police;
- Office of the Commissioner for Environmental Sustainability;
- Office of the Legal Services Commissioner;
- Office of the Ombudsman;
- Office of the Privacy Commissioner;
- Office of the Special Investigations Monitor;
- Office of the Victorian Electoral Commission;
- State Services Authority; and
- Victorian Auditor-General's Office.
According to a spokesperson from the Department of Treasury and Finance (DTF), as part of the amendment the VGPB will consider the inclusion of a number of entities “by assessing the volume, complexity and strategic value of the procurement activity to the State”.
The Bill is likely to pass as the Opposition has affirmed that it “does not oppose this Bill and wishes it a speedy passage”.
While the entities for possible inclusion have not yet been named, Labor’s Timothy Pallas stated, “As an illustration, these changes will include the ability of the Department of Treasury and Finance to oversee Public Transport Victoria’s purchasing of rolling stock.” The amendment is also likely to see agencies like the State Services Authority, the State Emergency Service and Tourism Victoria fall under the Act. Despite the proposed inclusion of more entities, a spokesperson from DTF also stated that the Government is committed to “ensuring red tape is minimised, especially for small or low risk procurement activities”. In January 2013, the Coalition introduced the target reduction of red tape by 25% by 2015.
According to DTF, “The time spent and costs incurred by business and the community dealing with excessive regulatory requirements is an unacceptable burden.” The Guidelines for preparing reducing red tape Statements of Expectations for regulators stated that in order to do so, reporting and notification requirements must be removed “in low‐risk areas of operation” and “in areas where those requirements have a minimal impact on regulatory activity and outcomes”.
In line with this target, as part of the proposed amendment, smaller entities subject to the oversight of the VGPB will be relieved of some of the requirements for low-risk procurement activity. They will however, still be encouraged to use the policy to benchmark procurement processes.
Reducing red tape is just one of the initiatives being implemented by the Government to make the state more competitive.
More flexible procurement practices to be brought in by June 2014 were flagged in the 2013-14 Victorian ICT Strategy as part of a new VGPB policy framework. The Strategy stated that the Government is endeavouring to avoid “being locked into single suppliers by favouring open standards”.
Agencies are also required to “reuse and share solutions, and engage in joint procurement where requirements are closely aligned”. Shared procurement was enabled by the launch of the eServices Register on 1 July 2013 which replaced the eServices panel as the mandatory ICT procurement vehicle.
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