Government Insight: Victorian procurement reform

In our latest Government Insight, we welcome Samantha Young, Senior Strategy and Policy Officer, Strategic Sourcing, Victorian Department of Treasury and Finance to talk procurement reform.

What was the main reason for procurement reform?

In February 2013, the Victorian Government Purchasing Board (VGPB) introduced a new procurement framework to improve the way government organisations procure goods and services. The reform emphasised high standards of probity and transparency, giving businesses fair and equal access to the government market place.

The framework emphasises:

  • good governance and accountability
  • forward strategic planning
  • early and thorough market analysis
  • more interactive market engagement
  • equity for local businesses
  • high standards of probity and transparency
  • recognition of procurement as an end-to-end activity with better contract management
  • better management of procurement risks to the state
  • sufficient flexibility to allow each organisation to develop a long term strategy suited to their unique procurement profile, maximising potential savings from procurement spend

All government departments, Victoria Police and Court Services must now comply with this procurement reform framework. VicRoads and Public Transport Victoria are currently applying for accreditation to procure goods and services through the VGPB procurement framework.

How does the new procurement environment make it easier for businesses to acquire government contracts?

The procurement reform ensures that government organisations have a planned approach to their procurement activity. Policy requires that they publish a procurement activity plan that details their procurement activity for the forthcoming 12-24 month period. The plan must be published online so that businesses can see what relevant opportunities are coming up and who to contact.

Policy also requires that organisations undertake in-depth market analysis before making any approach to the market. They must know the capacity and capability of the market to supply. They must also establish a supplier engagement plan, which documents their supplier engagement process to improve relationships with suppliers.

They are also required to:

  • consider how they can encourage Small Medium Enterprises (SMEs) and local suppliers to participate in government procurement
  • simplify their procurement processes wherever possible to avoid imposing unnecessary barriers to entry for local suppliers and SMEs.

What are you three top tips for businesses seeking to make the most out of the new procurement environment?

  1. Review the government organisations’ procurement activity plans to know when possible business opportunities are occurring. Get in touch with the contact person and seek out further information where appropriate.
  2. When bidding for government work, always understand the evaluation criteria. Demonstrate to the organisation how you offer better value for money than competitors in the marketplace. If you are unsuccessful in the procurement process don’t be disheartened. Use it as a learning opportunity. Always ask for feedback from the procurer and give feedback on the process. Government organisations cannot improve their process unless they know there is a problem.  Refer to the guide to supplier feedback to understand what the VGPB expects from Victorian government procurers.
  3. Undertake research to understand what each government organisation does and focus your energy on the government organisations that are most likely to procure from you.

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