2001-2002 victorian government purchasing board annual report · victorian government purchasing...
TRANSCRIPT
www.vgpb.vic.gov.auISSN 1444-4097 series no. 7.
VICTORIANGOVERNM
ENTPURCHASING
BOARDANNUAL
REPORT2001-2002
VGPBVICTORIAN
GOVERNMENT
PURCHASINGBOARD
ANNUALREPORT
2001-02
Achieving Excellence in Government Procurement
Vision
To achieve best practice in
the purchasing of goods and
services which will deliver value
for money, cost savings, effective
implementation of government
policy, integrity, ethics and
probity in government
purchasing.
Mission
To provide a framework within
which the Victorian Government
can use its purchasing power
to achieve value for money
purchasing with minimum risk
and maximum participation
from Australian and New Zealand
suppliers, for the benefit of
all Victorian citizens.
2
CO
NT
EN
TS
Page
Vision and Mission 1
List of Figures and Tables 4
Chairperson’s Report 6
Achievements in 2001-02 6
Future Developments 7
Appreciation 7
About the VGPB 8
Overview 8
Functions 8
Powers 8
Reporting Relationship 9
Scope of VGPB Policies 9
VGPB Members 10
VGPB Meeting Attendance 10
Strategic Priorities 2001-02 11
Procurement Policy Development and Refreshment Project 11
Management and Review of Accreditation Standards 11
Contract Management Improvement Program 11
Stakeholder Communications Strategy Development 12
Review of the Purchasing Database 12
Other Activities 2001-02 13
Seminars to Outer-Budget Agencies 13
PACCER 14
Trends 15
National Network 15
Winning Government Business 15
Panel of Presenters 15
Review of VGPB Website Functionality 16
About this Annual Report 5
Page
Procurement in 2001-02 18
Procurement Approvals Process 18
Purchasing Requisitions in 2001-02 18
Purchasing Trends for Goods and Services in 2001-02 18
Whole-of-Government Contracts 22
Accredited Purchasing Unit (APU) Activities 24
APU Case Studies 26
Department of Human Services 26
Department of Infrastructure 27
Victoria Police 29
Departmental Procurement Activities 30
Introduction 30
Alignment of Departments and APUs 30
Compliance with Policy 30
APU Requisitions 31
PURIST 36
PURIST System Development 36
Government Reporting through PURIST 36
Government Expenditure 36
Top 20 PURIST Classes 36
Sourcing Patterns by Location 37
Sourcing Patterns by PURIST Group 38
Glossary 39
Index 40
3
Departmental Procurement Activities 17
Procurement Expenditure Data–PURIST 35
4
LIS
T O
F F
IGU
RE
S A
ND
TAB
LE
S
About the VGPB Page
Table 1 Meeting Attendance 10
PACCER
Figure 1 PACCER Course Attendance 2001-02 14
Procurement in 2001-02
Table 2 Department Accreditation and Approval Limits 18
Table 3 Summary of Requisition Approvals >$100,000 19
Figure 2 Requisition Approvals >$100,000 by Value ($million) 1997-98 to 2001-02 20
Figure 3 Requisition Approvals >$100,000 by Number 1997-98 to 2001-02 20
Figure 4 Requisition Approvals by Average Value ($m/req) 1997-98 to 2001-02 21
Figure 5 Value of Requisitions >$100,000 Approved by APUs by Goods, Services, Consultancies and Variations 1997-98 to 2001-02 22
Table 4 Composition of Approved Purchases by Goods, Services, Consultancies and Variations 2001-02 22
Table 5 Summary of Whole-of-Government Contracts Managed by Procurement Group, and Other Government Departments and Agencies 23
Accredited Purchasing Unit Activities
Table 6 APU Activities 2001-02 24
Departmental Procurement Activities
Table 7 Supply Policy Breaches 2001-02 30
Figure 6 Department Purchasing Compliance (Compliance Index by Process) 1997-98 to 2001-02 31
Table 8 Number of APU Requisitions by Department or Agency 1997-98 to 2001-02 31
Figure 7 Number of APU Requisitions 1997-98 to 2001-02 32
Table 9 Value of APU Requisitions ($million) 1997-98 to 2001-02 32
Figure 8 Value of APU Requisitions ($million) 1997-98 to 2001-02 33
Figure 9 Percentage of APU Requisitions by Value ($) 2001-02 33
Table 10 Average Value of APU Requisitions ($million) 1997-98 to 2001-02 34
Figure 10 Average Value of APU Requisitions ($million) 1997-98 to 2001-02 34
Procurement Expenditure Data–PURIST
Figure 11 Goods and Services Expenditure 1997-98 to 2001-02 36
Figure 12 Top 20 PURIST Classes 2001-02 37
Figure 13 Sources of Government Supplies 2001-02 37
Figure 14 Regional Supplier Index 1997-98 to 2001-02 38
Figure 15 Top 20 PURIST Classes Purchased from Regional Vendors 2001-02 38
ABOUT THIS ANNUAL REPORT
As required by section 54M of the
Financial Management Act 1994,
this annual report describes the
work and activities of the
Victorian Government Purchasing
Board (VGPB) from 1 July 2001 to
30 June 2002. Information
about purchasing activity by
departments is provided in
the Departmental Procurement
Activities and Procurement
Expenditure Data–PURIST
sections at the end of
this report.
6
AB
OU
T T
HIS
AN
NU
AL R
EP
OR
T
Chairperson’s ReportAchievements in 2001-02
The VGPB achieved all key components of itsstrategic priorities for 2001-02. Achievements include:� The Procurement Policy Development and
Refreshment Project. The objectives of this majorreview and revision project included realigningpurchasing policies to ensure consistency withgovernment policies, and improving clarity andusability. This VGPB priority represented the firstmajor review of policies since the establishment of the VGPB in 1995, and the participation ofstakeholders enabled integration of importantperspectives. The revision process will be finalisedin early 2002-03.
� As a second strategic priority, a review wasundertaken of the Accreditation and DevolutionProgram. The VGPB has accredited departmentsto assume responsibility for purchasing. Thedelegation of VGPB’s powers through theaccreditation process requires departments tocomply with VGPB policy and to establish anAccredited Purchasing Unit. The objective of thereview was to determine the appropriateness of delegation levels and the standards set foraccreditation. This has been incorporated withinthe Procurement Policy Development andRefreshment Project, and similarly, will be finalised in early 2002-03.
� A strategy has been developed to communicategovernment procurement initiatives and projects tokey customers and stakeholders, and to meet theirinformation and advice requirements. As part ofthis, seminars were delivered to outer-budgetagencies about the government’s procurementprograms. The seminars covered the followingissues: probity and disclosure; agencybenchmarking against VGPB policies; electroniccommerce for procurement; common usearrangements; and the Victorian IndustryParticipation Policy (presented by a representativeof the Department of Innovation Industry andRegional Development)1.
� As its fourth priority, the VGPB established theContract Management Improvement Program withthe objective of continuous improvement across anumber of purchasing components. Achievementsinclude: revisions to contract management policy,enhancements to the contracts publishing systemand strengthened performance managementprocesses for whole-of-government contracts.
� As its final strategic priority, the VGPB undertook a review of the Purchasing Information System(PURIST) through which departmental purchasingstatistics are collected and analysed. Datacategorisation issues have been investigated alongwith possible new infrastructure to supportreporting requirements, should this be necessary. If departmental agreement is obtained within thecontext of the review, implementation will beprogressed as a separate project in 2002-03.
In addition to these achievements against the VGPB’scritical strategic priorities, further highlights include:� membership of the Procurement and Contracting
Centre for Education and Research (PACCER) wasextended to include South Australia and Tasmania,and the design and delivery of an additionalPACCER course on Probity in VictorianGovernment Contracting; and
� implementation of the recommendations of theReview of Government Purchasing Arrangementswas completed in line with government decisions.
Robin Jervis-Read, Chairperson
1 The Department of State and Regional Development became theDepartment of Innovation, Industry and Regional Development and the Department of Tourism, Sport and the Commonwealth Games in February 2002.
Future Developments
The VGPB will focus primarily on two key projects in 2002-03–a major redevelopment of the VGPBwebsite, and implementation of its communicationsstrategy.
The VGPB website (www.vgpb.vic.gov.au) is one offive that have been established for the managementof Victorian Government procurement. The othersinclude the tenders, contracts publishing system, andPACCER websites. These are important entry pointsfor those seeking information about purchasingpolicies, government business opportunities, detailsof contracts established and training courses. In all,over 500,000 visits were made to the websites in2001-02, and of these, over 280,000 were visits to the VGPB website. This site, which has beenoperational for six years, is in need of overhaul.
The VGPB will oversight this project, with the firsttask being the upload of the VGPB’s revisedpurchasing policies. The next task will be to uploadthe Practitioner’s Guide, which is currently beingreviewed and revised. The new website will employthe latest information mapping techniques to deliveractionable information in a customer-oriented, user-friendly format.
The VGPB’s second key project is the implementationof its communications strategy. This will involve thedelivery of information, guidance and advice inaccordance with the agreed communicationsstrategy.
Further activities will include finalisation of theProcurement Policy Development and RefreshmentProject, the purchasing statistics project, and theimplementation of the revised Accreditation andDevolution Program.
Appreciation
On behalf of the VGPB, I would like to thank theMinister for Finance, the Hon John Lenders MP, for his support as the Minister responsible for governmentprocurement. The VGPB would also like to thank theHon Lynne Kosky MP, who was Minister for Financeprior to Minister Lenders’ appointment on 12 February 2002. Thanks also to Warren Hodgsonfor his invaluable input and ongoing support of the VGPB.
In addition, I would like to express my appreciation ofthe dedication and excellent contribution of my fellowBoard members. Finally, thanks go to Jenny Melican,Director of Procurement Group, for her mostcompetent leadership; to all the members ofProcurement Group for their enthusiasm, creativeinput and hard work; and to the AccreditedPurchasing Units for their pro-active, professionalapproach to procurement and its ongoing reformacross government over the past year and into the future.
Robin Jervis-Read
Chairperson
About this Annual Report 7
April 2002 Board Meeting From left to right: Marissa Di Pasquale; Allan Stewart; Karen Cleave; the Hon John Lenders MP, Minister for Finance; Mark Burford; Faith FitzGerald; and Jenny Melican, Director Procurement Group
8 About this Annual Report
About the VGPB
Overview
The VGPB was established under the FinancialManagement Act 1994 (the Act) and replaced the State Tender Board from 1 February 1995.
The VGPB currently has seven members andmeets monthly to develop and approve policies,approve major requisitions from departments, anddiscuss related procurement policy and practicematters. Five of the VGPB members, including theChairperson, are external appointees, and two areappointed from government departments. Theday-to-day functions which support the VGPB are carried out by Procurement Group.
Functions
The VGPB has the following functions as defined by section 54B of the Act:a) in relation to the supply of goods and services to
departments and the management and disposal of goods by departments –i) to develop, implement and review policies
and practices; andii) to provide advice, staff training and consultancy
services;b) to monitor departmental compliance with supply
policies and Ministerial directions and to reportirregularities to the relevant Minister, and theMinister for Finance;
c) to foster improvements in the use and applicationof purchasing systems and electronic trading;
d) to establish and maintain a comprehensivedatabase of purchasing data of departments andsupply markets for access by departments;
e) any other functions conferred on the Board by this Part.
Powers
The VGPB has the following powers under section54C of the Act:1. The Board has all the powers necessary
to perform its functions.2. Without limiting sub-section (1), the Board may –
a) enter into contracts or arrangements on its ownbehalf, on behalf of the State or on behalf ofdepartments;
b) call and award tenders and advertise;c) consider and approve requisitions for
the purchase of goods and services bydepartments;
d) require accountable officers to auditdepartmental compliance with supply policiesand Ministerial directions and provide auditreports to the Board;
e) require accountable officers to provideinformation and data relating to the supply ofgoods and services and the management anddisposal of goods;
f) exercise any other powers conferred on theBoard by the Act or the regulations.
3. An accountable officer must provide to the Boardon request –a) audit reports referred to in sub-section (2)(d);b) information and data referred to in sub-section
(2)(e).
Reporting Relationship
The VGPB reports to the Minister for Finance, and is supported by Procurement Group, which providessecretariat and other services. The Department ofTreasury and Finance (DTF) also has a direct reportingline to the Minister for Finance on procurement policyand practice issues.
The VGPB has delegated authority to AccreditedPurchasing Units (APUs) to approve procurementprocesses up to each department’s level ofaccreditation. Each APU also reports to itsdepartmental Secretary on procurement policy andpractice issues. Secretaries are required to report tothe VGPB each year on the department’sprocurement activities. The following diagramillustrates this relationship.
Scope of VGPB Policies
The VGPB’s policies apply to the nine governmentdepartments as well as the following:
� Essential Services Commission
� Office of the Chief Commissioner of Police
� Office of the Commissioner for Public Employment
� Office of the Legal Ombudsman
� Office of the Ombudsman
� Office of Public Prosecutions
� Victorian Auditor-General's Office
� Victorian Electoral Commission
About this Annual Report 9
Ministers Minister for Finance
Victorian GovernmentPurchasing Board
Secretary Department of Treasury and Finance
Accredited Purchasing UnitsDepartment of Education and Training
Department of Human Services
Department of Infrastructure
Department of Innovation, Industry and Regional Development
Department of Justice
Department of Natural Resources and Environment
Department of Premier and Cabinet
Department of Tourism, Sport and the Commonwealth Games
Department of Treasury and Finance
Victoria Police
Department Secretaries
Deputy SecretaryCommercial
DirectorProcurement Group
10 About this Annual Report
VGPB Members
Chairperson
Robin Jervis-Read
Mr Jervis-Read has beenChairperson of the VGPB since itsinception in late 1994. Currently, he is head of Group Procurement atGoodyear Australia. He has 15 yearsgeneral management experience withAustralian corporations and 11 yearshigh-level strategic procurement
experience with Ford Motor Company and theautomotive component supply industries of Europe,Asia and the United States of America.
Members
Mark Burford
Appointed 1 October 2000, Mr Burford is director ofContemporary Green Design, adesign and property developmentcompany focusing on ecologicallysustainable development. He hasover 12 years experience in the Stateand Commonwealth Governments,
including nine years with the Victorian Government inthe Cabinet Office, Education, Industry Development,and Health. Mr Burford has also provided publicpolicy advice to a wide range of Commonwealth and State Government Ministers, Departments and Authorities.
Karen Cleave
Appointed 1 January 2000, Ms Cleave is Director, Office ofDepartmental Services, Departmentof Education and Training. Ms Cleavehas extensive experience in direct service delivery, resourcemanagement and strategic projectmanagement.
Faith FitzGerald
Appointed 1 October 2000, Ms FitzGerald is currently GeneralManager, RMIT Training Pty Ltd, thecommercial arm of RMIT University.Prior to taking up this position, Ms FitzGerald has 11 yearsexperience in management andmarketing in a high-technology
company (Genasys II Pty Ltd) and strong ITimplementation achievements. Prior to working in industry, she had 10 years experience in seniormanagement and policy roles in the Victorian and Australian Capital Territory Governments.
Bruce Hartnett
Appointed 1 April 2000, Mr Hartnettis a former Chief Executive Officer ofAustralian Government EmployeesSuperannuation Trust and formerHead of Employee Relations,National Australia Bank. He hasextensive senior public serviceexperience as Deputy Director-
General of the Victorian Department of Industry,Technology and Resources, and in the VictorianMinistry of Transport.
Marissa Di Pasquale
Appointed 1 October 2000, Ms Di Pasquale is a specialist in the commercialisation of innovationsand business opportunities. She hasextensive experience in businessdevelopment, marketing, corporateand government business, andproject management in the
information communications technology and financeindustries, and for public sectors. She has studiedand worked in Australia, the United Kingdom and the United States, including in science, law andmanagement.
Allan Stewart
Appointed 1 January 2000, Mr Stewart is General ManagerCorporate Services, Department ofNatural Resources and Environment(DNRE). DNRE is a leader in theimplementation of electroniccommerce in government and other e-government initiatives.
VGPB Meeting Attendance
The VGPB held 11 Board Meetings in the year to 30 June 2002. The following table shows the recordof attendance by members.
Table 1:
Meeting Attendance
Board Member Meetings Attended Eligible Meetings
Robin Jervis-Read 9 11
Mark Burford 10 11
Karen Cleave 9 11
Faith FitzGerald 11 11
Bruce Hartnett 7* 11
Marissa Di Pasquale 11 11
Allan Stewart 9 11
* VGPB approved leave of absence for three meetings
Strategic Priorities 2001-02
Procurement Policy Development and Refreshment Project
One of the VGPB’s strategic priorities for 2001-02was the Procurement Policy Development andRefreshment Project. The VGPB undertook a complete review of all policies to ensureconsistency with government policy and currencywith best procurement practices.
There has been no comprehensive review of policiessince the inception of the VGPB in 1995 althoughthere has been significant incremental change in a number of areas. Feedback from customer andstakeholder surveys highlighted the need forsimplifying the policies to improve accessibility forusers, and for greater clarity in communicating the key policy elements.
The policy review had three key objectives:� to clearly identify the mandatory procurement
requirements applicable to departments;� to ensure a consistent application of policy
by adopting a standard policy framework; and� to incorporate the requirements of a web-based
communication environment.
The outcome of the policy review has been:� a restructure of all policies into a standard
template;� a clear statement of mandatory requirements
for departments; � the inclusion of new policy where gaps were
identified; and� a linking of policies with other State and national
procurement information sources.
A comprehensive consultation process wasundertaken with departments to obtain practitioners’input into the content and structure of the revisedpolicies.
Management and Review of Accreditation Standards
The system of accreditation was introduced towardsthe end of 1995. Departments who receivedaccreditation were permitted to exercise the powerdelegated by the VGPB to approve purchasingprocesses up to the limit of their accreditation.Accreditation was granted to departments as theybegan to exercise effective management of theirprocurement processes.
As part of the delegation of powers from the VGPB,each department has established an APU to overseethe procurement process. Under the current system,four departments have been accredited to approvepurchasing processes up to $1 million whereas theremaining four departments are accredited to$500,0002. Purchases outside these limits are firstendorsed by departmental APUs and then forwardedto the VGPB for approval.
A review of the current accreditation regimehighlighted that the criteria for granting accreditationwas no longer applicable in a number of key areasand that the remaining criteria were too narrowlyfocused.
The VGPB determined that a new accreditationsystem should:� draw on a department’s performance
commitments in the management of theprocurement function;
� facilitate and support departments in assuminggreater responsibility for procurement processapproval; and
� refocus the role of the VGPB from processapproval to performance approval and strategicengagement with departments.
After consultation with departments, the VGPBadopted an accreditation system that requiresdepartments to prepare a Performance ManagementPlan for approval by the VGPB. The VGPB developeda framework to guide departments in thedevelopment of their plan. This plan establishes a contract between the department and the VGPBand is subject to annual compliance reporting.
The revised accreditation regime has beenincorporated into the Procurement PolicyDevelopment and Refreshment Project.
Contract Management Improvement Program
The VGPB established the Contract ManagementImprovement Program to improve capabilities acrossa number of procurement components:� The Contract Management Policy was
strengthened to clarify the roles andaccountabilities of those involved in themanagement of contracts. The new policy also incorporates a contract management planframework and template for completion by those involved in contracting processes.
About this Annual Report 11
2 For this reporting period, the Department of Innovation, Industry and Regional Development’s APU managed the approval process for theDepartment of Tourism, Sport and the Commonwealth Games which wasformed in February 2002.
12 About this Annual Report
� Procurement Group managed the migration of Contracts Publishing System data to adepartmental hosting environment. This enabledimprovements to be made to the management ofthe site, the uploading of data, and departmentalaccess. A manual was developed to support thetraining of departmental officers in the operation of the Contracts Publishing System.
� For a number of whole-of-government contractsadditional measures were implemented to improveperformance management and measurement ofsuppliers under the contract. This includedsurveying users of the contract to establish that performance targets were being met.
Stakeholder Communications Strategy Development
The External Stakeholders’ Communications Strategywas one of the VGPB’s strategic priorities for 2001-02. In the past, there has been no formalcommunications plan that addressed the needs of the VGPB’s stakeholders.
The objectives of the communications project were to:� review existing practices and services, and
ascertain stakeholders’ expectations, to identifygaps in communications; and
� develop specific actions to bridge the identifiedgaps.
To achieve these objectives, an External Stakeholderssurvey was conducted in February 2002. There was a high response rate of 70 per cent from surveyparticipants who included APUs, other departmentalstaff with procurement responsibilities, suppliers to theVictorian Government, outer-budget agencies andprocurement agencies in other state governments.Survey questions were broken down into content ofinformation, presentation and dissemination ofinformation, and customer-service issues. The surveycollected ratings (quantitative data) and comments(qualitative data) on existing communication and servicesprovided by the VGPB through Procurement Group.
The results of the survey indicated that the areaswhich needed to be targeted for improvementincluded the perception by stakeholders thatcommunication activities were disjointed.
A strategy which outlined a coordinated approach toexternal communication was developed. The strategyalso required that communications activities besupported by an appropriate internal structure,processes and protocols to reduce duplication and inconsistency.
The VGPB has agreed that implementation of the strategy is a priority in 2002-03.
Review of the Purchasing Database
In 1997 the VGPB established the PurchasingInformation System (PURIST) to collect and collateinformation on departmental purchasing activity.PURIST was designed to meet the VGPB’sresponsibility under section 54B(d) of the Financial Management Act 1994, to:
establish and maintain a comprehensive database of purchasing data of departments and supply markets for access by departments;…
The information was collected on a department-by-department basis at the transaction level andincluded details of what was bought, how much wasspent and when the purchase occurred. It matcheddepartmental categories of expenditure against astandard categorisation code called the AustraliaNew Zealand Standard Commodity Classification(ANZSCC). The data was intended to be used forstrategic analysis of procurement patterns, forexample, to identify which types of goods or serviceswere suitable for whole-of-government contracts.
Since the inception of PURIST, there have beensignificant changes which have impacted on theoperation of the system.
First, departments now have far more sophisticatedfinancial and accounting systems. They are able tointerrogate these systems directly to obtainpurchasing data and to carry out their own strategicanalysis.
Secondly, the ANZSCC classification is out-of-date.The United Nations Standard Product and ServicesClassification (UNSPSC) is now the standardclassification system, and has been endorsed by theAustralian Procurement and Construction MinisterialCouncil as the coding system for e-commerce in alljurisdictions.
Third, the Electronic Commerce for Procurement(EC4P) Project is almost complete. It will providedetailed information on purchasing classified againstthe UNSPSC.
Given the impact of new technologies and theUNSPSC classification system, the VGPB isconsidering alternatives and options for meeting the information needs of departments.
Other Activities 2001-02
Seminars to Outer-Budget Agencies
Procurement Group conducted a New Directionsin Procurement seminar series to outline keypurchasing reforms and initiatives that impact on outer-budget agencies. The seminars wereinitiated in response to a number of new policydirections introduced by the Bracks Government,including the government response to the Reviewof Government Purchasing Arrangements.
The seminars dealt with:� Benchmarking Procurement Policies against those
of the VGPBIn response to the Review of GovernmentPurchasing Arrangements, the governmentdirected that agencies should benchmark theirprocurement policies against those established by the VGPB. The presentation outlined what thismeant for outer-budget agencies, and introducedrelevant performance standards, policies andguidance to assist with the task.
� Openness and Probity in Victorian GovernmentContractsThe Premier’s Statement, Ensuring Openness andProbity in Victorian Government Contracts,released on 11 October 2000, puts Victoria at theforefront of probity and disclosure. Thispresentation described agencies’ obligations as aresult of the Premier’s Statement. It also provideddetails about the Contracts Publishing System, the VGPB Probity Guidelines, the whole-of-government panel of probity auditors, and some of the tools available to assist agencies meet theirobligations.
� The Victorian Industry Participation PolicyThe Victorian Industry Participation Policy, releasedby the Minister for State and RegionalDevelopment on 5 April 2001, establishes theframework for considering local suppliers inawarding major government contracts. Thispresentation detailed what this meant for outer-budget agencies, together with the assistanceavailable to meet these objectives.
� Whole-of-Government ContractsA range of whole-of-government contracts isavailable to agencies. The goods and servicescovered by these contracts include energy(petroleum, gas, electricity), information technologyand training, Human Resources services, financialservices, advertising, couriers and stationery. Thispresentation outlined how agencies can use thesecontracts to maximise value for money and reduceadministrative costs.
� Electronic Commerce for Procurement (EC4P)The Victorian Government is introducing electroniccommerce extensively as a means of streamliningthe procurement activities of departments. Thispresentation outlined how outer-budget agenciescould use available information, tools andguidance to implement EC4P in their organisation.
The seminars were presented to outer-budgetagencies across all portfolios. Speakers from theDepartment of Innovation, Industry and RegionalDevelopment, and the Industrial Supplies Office alsoparticipated in the seminars presenting information onthe Victorian Industry Participation Policy.
Materials from the seminars are available on theVGPB website (www.vgpb.vic.gov.au).
About this Annual Report 13
14 About this Annual Report
PACCER
The Procurement and Contracting Centre forEducation and Research (PACCER) was establishedto provide procurement and contracting training on behalf of the VGPB as required under section54B(a)(ii) of the Financial Management Act 1994.
In 2001-02, 638 people attended PACCER trainingcourses and information sessions. Proving mostpopular over this period was the training courseSpecification Writing and Tender Preparation with 70 participants (figure 1).
Number of Attendees
Course TitleCompetency Based1 Introduction to Procurement and Contracting2 Specification Writing and Tender Preparation3 The Tender Process4 Service Contract Management5 Advanced Procurement Planning
Information Sessions/Workshops6 Overview of Contract Management7 Partnerships Victoria8 Policy, Contracts and EC4P9 Probity in Victorian Government
Supplier Workshops10 Winning Government Business (Metropolitan)11 Winning Government Business (Regional)
Figure 1:
PACCER Course Attendance 2001-02
0
50
100
150
200
1 2 3 4 5 6 7 8 9 10 11
Trends
Initially, demand for procurement and contractingtraining was driven by the VGPB DepartmentalAccreditation System, and the departments’ need toensure that relevant staff had undertaken prescribedtraining to meet the criteria for accreditation. Recenttrends indicated a steady increase in demand fromindividual public-sector employees who wish toacquire necessary procurement and contractmanagement skills.
PACCER now offers half-day professionaldevelopment seminars on topical issues ingovernment procurement. Two new seminars,Partnerships Victoria and the popular Probity inVictorian Government Contracting, were launchedthis year.
National Network
Two new members, South Australia and Tasmania,were welcomed into the PACCER National Networkthis year, expanding the membership to six. The othermembers are Victoria, the Australian Capital Territory,the Northern Territory and Western Australia.
PACCER National Network Conference, 17 May 2002From left to right: Kim Hudson (Assistant Director, Procurement and Property, Department of Treasury and Finance, Tasmania),Ann-Marie Fishburn (Advisor, Policy and Strategy, Department of Administrative and Information Services, South Australia),Jenny Melican (Director, Procurement Group,Department of Treasury and Finance, Victoria),and Brian Holding (Senior Policy Analyst, Procurement and Property,Department of Treasury and Finance, Tasmania)
PACCER National Network signing ceremony, 14 June 2002Front, from left to right: The Hon John Lenders MP (Minister for Finance, Victoria) and the Hon Jay Weatherill MP (Minister for Administrative Services and Minister for Urban Developmentand Planning, South Australia) Back from left to right: The Hon Kon Vatskalis MLA (Minister for Transport and Infrastructure, Northern Territory),the Hon Dr David Crean MLC (Treasurer and Minister for Finance,Tasmania), and the Hon Tom Stephens BA MLC (Minister for Housing and Works, Western Australia)
PACCER Victoria, founder and coordinator of the network, organised the signing of MinisterialAgreements between the Victorian Minister forFinance and his counterparts from South Australiaand Tasmania at the June 2002 AustralianProcurement and Construction Ministerial CouncilConference.
PACCER Victoria convened regular videoconferences,and also hosted an in-person conference for newmembers, South Australia and Tasmania, inMelbourne in May 2002.
Winning Government Business
The very popular Winning Government Businessseminars were presented to 222 small businessoperators in metropolitan Melbourne and regionalVictoria. The seminars provide potential suppliers withinformation on government procurement practices,changes in policies which affect suppliers andtenderers and how to best position themselves to do business with government.
Panel of Presenters
In anticipation of a growth in demand for PACCERtraining, a public tender was called to establish apanel of specialist procurement presenters. Eachpresenter on the panel is both a qualified trainer anda procurement practitioner. Presenters will beaccredited to present PACCER courses at variousAustralian Qualification Framework levels.
About this Annual Report 15
16 About this Annual Report
Review of VGPB Website Functionality
The VGPB website was originally hosted on theCommonwealth's Government Electronic MarketplaceService site in Canberra in 1994.
The VGPB website continued to expand and waseventually replicated on the VICNET server inMelbourne early in 1996. In 1997 it was redevelopedto incorporate new material and features, includingonline database applications.
Growth continued from 1997, and the website is nowundergoing redevelopment. In 2001 there were morethan 280,000 visits to the website and this figure issignificantly growing.
Currently, the website is being redesigned with theparticipation of stakeholders and the assistance of a usability expert.
Some features of the new website will be:� an intuitive navigation system to enable users
to find information quickly;� a user-friendly web layout for the presentation
of VGPB Policies;� a Practitioner’s Guide;� a section for Templates and Tools; and� a search facility.
DEPARTMENTAL PROCUREMENT ACTIVITIES
This section presents an aggregate
analysis of procurement processes
above or equal to $100,000, which
were approved during 2001-02
by the VGPB, or by Departmental
APUs under the VGPB’s delegation.
18
DE
PA
RT
ME
NTA
L P
RO
CU
RE
ME
NT
AC
TIV
ITIE
S
Procurement in 2001-02Information in this section differs from the dataprovided by the PURIST system (see page 36),which shows actual departmental expenditureduring 2001-02. For example, a five-year contractmay be approved in 2001-02, but expenditure will be spread over the five-year period.
Procurement Approvals Process
Part 7A of the Financial Management Act 1994confers on the VGPB the power necessary toconsider and approve purchases for goods andservices by departments, including the power toestablish policy to govern the approval process.
In late 1995 the VGPB established an accreditationsystem that enabled departments to consider andapprove purchases up to their accreditation level, that is, $500,000 for Level 2 and $1 million for Level3. Purchasing processes above these levels requireVGPB approval. The department accreditation levelsare shown below.
Purchasing Requisitions in 2001-02
All procurement processes that are submitted to an APU or the VGPB for consideration and approvalare put forward in a summary document, known as a requisition. A requisition will summarise theprocurement process, demonstrating compliance to VGPB policies and highlighting major contractualmatters.
Purchasing Trends for Goods and Services in 2001-02
VGPB policy requires any procurement processestimated to cost more than $100,000 be subject to a public tender. Where it may be impracticable or inexpedient to conduct a public tender, theaccountable officer (the departmental Secretary or equivalent) is able to waive the public tenderrequirement. In this event, at least three writtenquotes should be obtained, unless the accountableofficer again certifies that it is impracticable orinexpedient to do so.
VGPB policies also provide that, in the followingcases, departments or Victoria Police may enter into arrangements without calling public tenders or obtaining certificates of waiver:� activities covered by Schedule 1 Exemptions
to Public Tender Policy (relevant policy: 3.03 Public Tenders, located atwww.vgpb.vic.gov.au/polguid/pol303.htm)and covers such matters as inter-departmentalpurchases and urgent purchases relating to public health;
� IT goods and services from the CommonwealthEndorsed Supplier Arrangement (relevant policy:1.01 Purchase of information technologyhardware, software, services andtelecommunications, located atwww.vgpb.vic.gov.au/polguid/pol110.htm);
Table 2:
Department Accreditation and Approval Limits
Department Accreditation Level Limit ($)
Department of Human Services Level 2 500,000
Department of Infrastructure Level 2 500,000
Department of Innovation, Industry and Regional Development, and Department of Tourism, Sport and the Commonwealth Games3 Level 2 500,000
Department of Treasury and Finance, and Department of Premier and Cabinet (Central Agencies) Level 2 500,000
Department of Education and Training Level 3 1,000,000
Department of Justice Level 3 1,000,000
Department of Natural Resources and Environment Level 3 1,000,000
Victoria Police Level 3 1,000,000
3 As a result of a machinery of government change, the former Department of State and Regional Development was renamed Department of Innovation,Industry and Regional Development (DIIRD) and a new Department of Tourism, Sport and the Commonwealth Games (DTSCG) was established. The corporate services function, including the Accredited Purchasing Unit, for both departments is provided by DIIRD Corporate Service.
� purchases under existing whole-of-governmentCommon Use Arrangements (located atwww.vgpb.vic.gov.au/polguid/polO1.htm); and
� purchases under existing Open Standing OfferArrangements and panel contracts.
Where a department wishes to vary a contractualarrangement, it must obtain procurement processapproval for the variation:� if the variation provisions were not included in the
original procurement process approval by the APUor VGPB; and/or
� the approval results in the expenditure exceeding10 per cent of the already approved procurementlevel by the APU or VGPB.
Table 3 is a summary of the requisitions approvedduring 2001-02. It indicates that:� 576 individual procurement processes were
submitted for the approval of either the VGPB or a departmental APU;
� 324 requisitions valued at $1,380.7 million resultedfrom publicly advertised tenders, representing 56.3 per cent of all transactions by number and85.43 per cent by value;
� certification by an accountable officer, waiving therequirement for either public tender and/or threequotations, was provided in 132 instances;
� the average requisition size was $2.81 million; and� the total value of requisitions approved increased
substantially. The substantial increase in 2001-02was due to:– the significant number of whole-of-government
contracts being retendered during this periodincluding the contracts for Stationery,Personnel, Electricity, Telecommunications,Microsoft software and Lotus Notes software;
– the Department of Human Services establishingpanel arrangements for the supply of IT networkequipment, personal computers and services;and
– the Department of Education and Trainingestablishing contracts for IT related goods and services, Leasing Facilities and a HumanResource Management System.
The approved value for these contracts equates to approximately $854.62 million. If these contractswere not included the total value of contracts woulddecrease to $761.48 million and the averagecontract value would reduce from $2.81 million to $1.35 million.
Departmental Procurement Activities 19
4 Public Tenders includes 41 requisitions valued at $41.87 million for purchases from panel contracts.
Table 3:
Summary of Requisition Approvals >$100,000
Summary of Requisition Approvals by Category ($m) $million
Category 1997-98 1998-99 1999-00 2000-01 2001-02
Public Tenders4 562.7 709.8 348.4 342.1 1,422.6
Exemption from Public Tender 28.3 98.6 58.2 26.0 26.5
Exemption from Public Tender and Three Quotes 20.4 9.4 40.1 146.0 55.2
Variations 10.3 88.2 51.8 62.4 111.0
TOTALS 621.7 906.0 498.5 576.5 1,616.1
Summary of Requisition Approvals by Category (No.) Number
Category 1997-98 1998-99 1999-00 2000-01 2001-02
Public Tenders4 450 441 290 328 3
Exemption from Public Tender 99 174 86 58 46
Exemption from Public Tender and Three Quotes 59 17 33 59 86
Variations 33 80 77 72 79
TOTALS 641 712 486 517 576
Summary of Requisition Approvals (Average $m Value) $million
Category 1997-98 1998-99 1999-00 2000-01 2001-02
Public Tenders4 1.3 1.6 1.2 1.0 3.9
Exemption from Public Tender 0.3 0.6 0.7 0.4 0.6
Exemption from Public Tender and Three Quotes 0.3 0.6 1.2 2.5 0.6
Variations 0.3 1.1 0.7 0.9 1.4
OVERALL AVERAGE 1.0 1.3 1.0 1.1 2.81
20 Departmental Procurement Activities
Overall, the number of contracts approved increasedby seven per cent (figure 3), but the total dollar valueincreased by 173 per cent (figure 2). This significantincrease resulted from the number of whole-of-government contracts established in 2001-02 and the move by departments to develop strategiccontracts for ongoing supplies of goods or servicesto replace many individual contracts and purchaseorders.
VariationsExemption from Public Tender and 3 QuotesExemption from Public TenderPublic Tenders
Financial Year1 1997-982 1998-993 1999-004 2000-015 2001-02
Value of Requisitions ($million)
Figure 2:
Requisition Approvals >$100,000 by Value ($million) 1997-98 to 2001-02
0
300
600
900
1,200
1,500
1,800
1 2 3 4 5
Category
Financial Year1 1997-982 1998-993 1999-004 2000-015 2001-02
Number of Requisitions
Figure 3:
Requisition Approvals >$100,000 by Number 1997-98 to 2001-02
0
100
200
300
400
500
600
700
800
1 2 3 4 5
CategoryVariationsExemption from Public Tender and 3 QuotesExemption from Public TenderPublic Tenders
Figure 4 shows that the average value of requisitionsresulting from exemptions from public tender andvariations are fairly consistent with previous years.The decrease in average value of requisitions forexemptions from three quotes this year in comparisonto the previous year can be attributed to theestablishment of contracts for the provision ofvaccines valued at approximately $90 million thatwere let by DHS in 2000-01. The exceptionalincrease in the average value of public tenders in2001-02 is explained by the establishment of anumber of whole-of-government contracts during the year.
Departmental Procurement Activities 21
Average Value of Requisition ($million)
Category1 Public Tenders2 Exemption from Public Tender3 Exemption from Public Tender and 3 Quotes4 Variations
Figure 4:
Requisition Approvals by Average Value ($million/req) 1997-98 to 2001-02
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1997-981998-991999-002000-012001-02
1 2 3 4
Financial Year
22 Departmental Procurement Activities
Figure 5 shows the value of requisitions by goods,services, consultancies and variations whilst table 4indicates their composition by number and value. The table shows that the largest number of contractsprocessed are for services which make up 58.5 per cent of the contracts. Consultancy typecontracts comprise 6.4 per cent, with contracts for goods making up the remaining 21.6 per cent.However, goods account for 58 per cent of totalvalue, whereas services and consultancies combinedaccount for 35 per cent of the total value ofrequisitions.
Whole-of-Government Contracts
The VGPB oversees the establishment of whole-of-government contracts for the supply of commonlyused goods and services to departments andagencies. These contracts achieve savings throughbulk purchasing and minimising administration costsfor tendering and management.
By accessing whole-of-government contracts,departments eliminate the need to separately tenderfor these requirements. The Procurement Group ofDTF is responsible for managing the whole-of-government contracting program on behalf of theVGPB. For a number of contracts, other departmentsor DTF groups perform the contract managementrole. Table 5 provides information on the whole-of-government contracts currently in place.
VariationsConsultancyServicesGoods
Financial Year1 1997-982 1998-993 1999-004 2000-015 2001-02
Value of Requisitions ($million)
Figure 5:
Value of Requisitions >$100,000 Approved by APUs by Goods, Services, Consultancies and Variations 1997-98 to 2001-02
0
300
600
900
1,200
1,500
1,800
1 2 3 4 5
Category
Table 4:
Composition of Approved Purchases by Goods, Services, Consultancies and Variations 2001-02
Number of Contracts
$100,000- $500,001- $1,000,001- >$10,000,001 Total Total Type of Purchase $500,000 $1,000,000 $10,000,000 Number Value ($m)
Goods 69 19 23 13 124 938.1
Services 224 51 50 11 336 555.6
Consultancies 34 2 1 0 37 10.6
Variations 62 4 8 3 79 111.8
TOTAL 389 76 82 27 576 1,616.1
Table 5:
Summary of Contracts Managed by Procurement Group, and Other Government Departments and Agencies
Description Contract Expiry Date Manager
Administrative Professional and Executive 30 September 2003 Procurement Group, DTFStaffing Services
Corporate Financial Assessment Services 31 December 2002 Procurement Group, DTF
Electricity Supply–(160-750MWh) 30 October 2005 Procurement Group DTF
Electricity Supply–(750MWh +) 30 June 2004 Procurement Group, DTF
Electronic Commerce for Procurement (EC4P) 30 March 2003 Procurement Group, DTF
Fuel, Lubricants 30 June 2003 Procurement Group, DTF
Intra-Government Mail Exchange 1 October 2002 Procurement Group, DTFTender process nearing completion
Information Technology (IT) Leasing Expired, tender process nearing Procurement Group, DTFcompletion
IT Personnel 30 September 2003 Procurement Group, DTF
IT Training Services 30 October 2002 Procurement Group, DTFTender process nearing completion
Office Copying Equipment Planning and specification development Procurement Group, DTFcurrently being undertaken
PACCER Panel of Presenters 30 September 2005 Procurement Group, DTF
Probity Auditors 31 March 2005 Procurement Group, DTF
Stationery and Office Supplies 30 September 2004 Procurement Group, DTF
Travel Service 31 December 2002 Procurement Group, DTFPlanning and specification development currently being undertaken
Agency Collection Services 30 September 2004 Commercial and Financial Risk Management (CFRM), DTF
Core Transactional Banking Services 30 September 2004 CFRM, DTF
Fleet Vehicle Leasing 3 July 2008 CFRM, DTF
Light Commercial and Passenger Vehicles 31 May 2003 CFRM, DTF
Lock Box Services 30 September 2004 CFRM, DTF
Novated Vehicle Leasing 31 May 2003 CFRM, DTF
Provision of information technology education, 31 May 2004 Financial Reporting and Control (FRC), DTFproducts and services–Oracle Systems
Victorian Government Purchasing Card 30 September 2004 FRC, DTF
IT Research, Analysis and Advisory Services 30 June 2003 Infrastructure Development, Department of Infrastructure
Lotus Notes Framework Products Related 1 June 2005 Multimedia Victoria, Department of Services Panel Innovation, Industry and Regional
Development (DIIRD)
PC Software Multimedia Victoria, DIIRD� Microsoft (Volante) � 31 March 2006� Citrix (MicroHelp) � Currently under review
Tender process nearing completion� Lotus Notes � August 2005� Telephony (Local, Fixed to mobile, � 25 June 2003 Multimedia Victoria, DIIRD
Mobile calls, Mobile hardware� International, and Intrastate � 30 September 2002� Interstate � 30 September 2002
Advertising (Master Agency Media Services) 31 December 2003 Strategic Communications and Government Information, Department of Premier and Cabinet (DPC)
Discounted Health Services 30 April 2003 Office for Workforce Development, DPC
Workcover Insurance Ongoing Victorian Workcover Authority
Commonwealth Endorsed Suppliers Ongoing Commonwealth GovernmentArrangement for IT products and services
Departmental Procurement Activities 23
24 Departmental Procurement Activities
Accredited Purchasing Unit (APU)ActivitiesAPUs have reported a range of procurement activities during 2001-02.
Table 6:
APU Activities 2001-02
APU APU Chair and Activities in 2001-02
Department of Education, and Training (DE&T)
Ms Gail Hart is the APU Chair for DE&T. Some of the activities undertaken by the DE&T APU in 2001-02 include: � Web-based purchasing and contracting resources were developed for use within the Department.� APU membership was reviewed and a proposal made that APU membership, for a minimum
term of 18 months, should be incorporated into the professional development of Level 3Executive Officers, particularly new Executive Officers.
� A service level agreement for the maintenance of preferred supplier catalogues for EC4P wasnegotiated with the successful Victorian Government catalogue provider.
� An application provider and implementation partner was engaged for the Department e-procurement workflow solution.
� Monthly reports on APU approvals were provided to the Chief Finance Officer.� Quarterly reports were provided to the Secretary, Divisional Directors and the VGPB.� Purchasing bulletins with updates on purchasing policies, issues, whole-of-government contracts
and alike were provided to the Department.� New Directions in Procurement seminars were conducted for agencies and Technical and Further
Education Institutes (TAFEs).� Probity seminars were conducted for Department staff.
Department of Human Services (DHS)
Mr Phil Proudfoot is the APU Chair for DHS. Some of the activities undertaken by the DHS APU in 2001-02 include: � New Provider Selection Framework was established to provide guidance to the Department
and agencies when selecting new providers of goods and services through competitive tender,advertised submissions, invited submissions and direct allocation.
� New Directions in Procurement seminars to outline new government procurement policies were delivered to Department and related outer-budget agencies.
� Ongoing operation of the Funding and Purchasing Policy Contact Officer Network to provideassistance and advice to Departmental staff and managers on funding and purchasing policies.(More information is provided in the case study on page 26.)
� The DHS Funding and Purchasing Policies and Guidelines were revised to reflect changes in policy focus on community services and whole-of-government procurement.
� Pilot implementation of the DHS Electronic Commerce for Procurement (EC4P) Project. The project is part of a whole-of-government initiative to enable all appropriate purchases and payments to be made online.
Mr Tony Butler is the APU Chair for DoI. Some of the activities undertaken by the DoI APU in 2001-02 include: � Ongoing training initiatives were undertaken, including General Awareness sessions on
Contracting Policies at DoI, Risk Management in Tendering, Business Plan Reporting and trainingfor the new Contract Management System.
� Development and launch of a new Contracts Management System. (More information is given inthe case study on page 27.)
� Web enablement of Contracting DoI, to enhance Departmental and agency access to the system.Previously access to the system was restricted to users of Lotus Notes.
� Development of a guidance manual for the Contracting DoI online system.� Contracting DoI’s content was reviewed. New material on risk management, specification writing,
tender evaluation and contract management planning was developed to address the findings ofthe review.
� Continued development of Privatised Arrangements Support Systems (PASS), a suite ofinformation technology applications to support and facilitate the management of public transportcontracts.
� Development of Project Management DoI, an online project management tool.� Research into software options for the development of a Tender Assembly Tool.� Development of a business case for the implementation of EC4P within the Department. Within
this business case, the most appropriate manner for implementing electronic catalogues to assistthe Department in its procurement activities was identified.
Department of Infrastructure (DoI)
Departmental Procurement Activities 25
Department of Innovation,Industry and RegionalDevelopment (DIIRD)
and
Department of Tourism, Sport and the Commonwealth Games (DTSCG)
Ms Debbie Goodin is the APU Chair for DIIRD and DTSCG. Some of the activities undertaken by the shared DIIRD/DTSCG APU in 2001-02 include: � In February 2002, the Department of State and Regional Development became two departments:
Department of Innovation, Industry and Regional Development, and Department of Tourism,Sport and the Commonwealth Games. Business requirements to meet these machinery ofgovernment changes were addressed.
� Standard departmental templates were developed to enhance the quality of procurement reportspresented to the APU.
� Assumed a lead-agency role in arranging whole-of-government contracts for a range of telecommunication and information technology services.
� Financial delegation levels were reviewed and Heads of Business Groups’ delegation levels wereincreased. This initiative facilitated a more efficient procurement process in respect of approvals.
� PACCER training courses advertisements were included in departmental weekly circulars.� Continued to support the whole-of-government purchasing and procurement initiatives including
the VGPB website redevelopment, Procurement Systems user group and participation in whole-of-government common use arrangements.
Department of Justice (DoJ) Mr John Charleson is the APU Chair for DoJ. Some of the activities undertaken by the DoJ APU in2001-02 include: � An upgrade of Oracle to version 11i was undertaken. The Oracle IP5 workflow project will go
online in October 2002.� Catalogue Management was initiated for the implementation of EC4P.� An EC4P business case was developed and approved by the Minister for Finance.� Commenced stage one of a Contracts Database project that will consolidate and substantially
improve the functionality of the Department’s APU submissions register and consultancy register.� Participated in a whole-of-government project to implement an electronic tender box in the
Department.� Implemented a quarterly APU Forum to be attended by all APU members.� Utilised Lotus Notes templates to review and upgrade the Department’s online purchasing policy
guidelines environment.� Reviewed the Department’s contract management framework and operational practices.
These will be incorporated into the Purchasing Management Plan.
Department of Natural Resources and Environment (DNRE)
Mr Allan Stewart is the APU Chair for DNRE. Some of the activities undertaken by the DNRE APU in 2001-02 include: � Internal reorganisation to better meet the commercial needs of the Department with respect
to commercial policy and governance. Reorganisation included the provision of a Centre ofExcellence.
� Further implementation of EC4P, including listing suppliers on the electronic catalogues.� Further development of the Electronic Contracts Register to improve the quality of data recorded,
ensure appropriate contracts are utilised, and provide relevant management information.� Formalisation of the electronic Consultancies Register. The register is reconciled with the
financial management system on a monthly basis.� Consistent registration of all public tenders to facilitate a clear audit trail. All tenders are recorded
to better manage the tender box process, and the quality of the advertisement content.� Ongoing consultation and development work with Procurement Group and the VGPB to develop
the new framework for devolution and accreditation to Departmental APUs.� Encouraged Department business units to strategically plan for procurement activities,
particularly where there are a number of related purchases or where the purchases are cyclical by nature.
� Coordinated basic governance training throughout the Department.
Department of Premier and Cabinet (DPC)
Mr Yehudi Blacher is the APU Chair for DPC. Some of the activities undertaken by the CentralAgencies APU (shared with DTF) in 2001-02 include: � Provided input to all VGPB forums and working parties, including policy refreshment seminars.� Provided ongoing, Department-specific, Level 2 Accreditation and Contract Management training.� Enhanced the Purchasing and Contracting Database through the development of standard
templates and the incorporation of links to the VGPB website.� Assisted in the establishment of a Departmental IT Standing Offer Arrangement for computers
(desktop and laptop).� Assisted in the establishment of a Departmental Common Use Arrangement
for Creative Advertising Services on significant government projects.
26 Departmental Procurement Activities
Mr Warren Hodgson is the APU Chair for DTF. Some of the activities undertaken by theCentral Agencies APU (shared with DPC) in 2001-02 include: � Implemented additional departmental procedures to address internal audit
recommendations, including: – requirement for all engagements over $50,000 to be scrutinised by a Central Unit
to ensure compliance with purchasing guidelines;– requirement for the Deputy Secretary to sign a Process Integrity Form for all
engagements over $50,000 acknowledging correct procedures have been followedand a signed contract sighted; and
– provision of ongoing, Department-specific, Level 2 Accreditation and ContractManagement training.
� Quarterly reporting to the Secretary outlining details of standard and non-standardprocurement activity. Exemptions, waivers and variations are classified as non-standard.
� Enhanced the Purchasing and Contracting Database through the development ofstandard templates and the incorporation of links to the VGPB website.
� Assisted in the establishment of a Departmental IT Standing Offer Arrangement forcomputers (desktop and laptop).
� Assisted in the establishment of a Departmental Common Use Arrangement for theengagement of Strategic Research Professionals.
Victoria Police (VicPolice) Mr Clifford Owen is the APU Chair for VicPolice. Some of the activities undertaken byVicPolice APU in 2001-02 include: � The APU Secretariat provided in-house training, including modules in Introduction
to Procurement Planning, Preparing Bid Documents, All Purpose Evaluation Tool, and Contract Management.
� Developed an intranet site for information dissemination on procurement (includingcurrent organisational and whole-of-government contracts), training, how toexplanations, standard templates; and as an online system for APU submissions. (More information is given in the case study on page 29.)
Department of Treasury and Finance (DTF)
APU Case Studies
The following three case studies provide furtherinsight on the range of activities undertaken bydepartmental APUs during 2001-02.
Department of Human Services: Funding andPurchasing Policy Contact Officers’ Network
The Department of Human Services operates undertwo policy frameworks–the VGPB’s procurementpolicies and the government’s Policy on FundingRelationships between the Department of HumanServices (DHS) and Funded Agencies.
The VGPB policies govern the Department’scommercial purchasing activities, while thegovernment’s Policy on Funding Relationshipsgoverns the Department’s funding activities withrespect to the delivery of services to the community.This acknowledges the complexity of the human-services sector, which is characterised by not-for-profit, non-commercial, community-basedorganisations.
To assist the Department’s staff in understanding andapplying funding and purchasing policies, theDepartment maintains a network of expert advisors
known as Funding and Purchasing Policy ContactOfficers or FAPPcos. These officers areknowledgeable in both the VGPB policies and thegovernment’s Policy on Funding Relationships.
The network evolved from the former Tendering and Contracting Contact Officers’ network, whichunderwent a name change and significant role reviewto reflect the current government’s policy approach.The Department maintains at least one FAPPco ineach Division and region to ensure access for all staff.
The role of FAPPcos is:� to provide advice on funding and purchasing
policy and practice on request, and to providenecessary assistance to managers and staffundertaking a funding or purchasing process;
� to act as a source of information on funding andpurchasing policy and practice;
� to liaise and consult with corporate areas whichhave a role in managing funding and purchasingpolicy and practice at Departmental level;
� to check and endorse contracts and other relevantdocumentation; and
� to manage the local database of contracts andconsultancies and provide reports as required.
The changes introduced by the government tofunding and purchasing policies have underscoredthe importance of the FAPPco network and raised theprofile of the FAPPco role so that it is now recognisedas a critical corporate function. This has resulted insome Divisions and regions spreading the FAPPcoresponsibilities over two or three people rather thanconcentrating the knowledge in a single person.
The FAPPcos’ network meets every two months at a forum organised by the Department’s BusinessDevelopment Branch. These meetings are held toprovide information to FAPPcos about funding andpurchasing issues at a corporate level, and also toprovide an opportunity for FAPPcos to raise anddiscuss issues of interest to them. Small workinggroups of FAPPcos are also formed on a regular basisto address specific issues. Some recent examples ofthese working groups include one set up to develop a standard submission template, and another whichassisted in the redevelopment of the Department’swritten funding and purchasing documentation into a new intranet-based information guide.
Business Development Branch is responsible for theadministration and maintenance of the FAPPcos’network. Following their nomination by their Divisionalor regional director, new FAPPcos receive a one-on-one briefing from a member of the Branch’s Fundingand Purchasing Policy Unit. Depending on theirbackground and experience, they may also be pairedwith another more experienced FAPPco who hasagreed to act as a mentor. This ensures the FAPPconetwork is able to provide authoritative and accurateadvice and contributes to proper compliance withgovernment policies and processes.
Department of Infrastructure: ContractsManagement System (CMS@DoI)
Introduction
DoI needed a corporate system to assist in meetingits management and reporting responsibilities relatingto contracts and particularly in relation toconsultancies.
The needs
Contracts Services at DoI identified four major areas that needed to be addressed:� Meeting DoI, VGPB and Victorian Government
reporting requirements relating to contracts:– subject to both the VGPB and construction
regimes;– for the engagement of consultants, as defined
in the VGPB’s Supply Policies;– required to be disclosed through the Contracts
Publishing System;– for supply of requirements with imported
content; and
– subject to the Victorian Industry ParticipationPolicy.
These reports had been generated manually frominformation contained in spreadsheets, OracleFinancials and paper-based records. Theircompilation was an onerous and time-consumingtask and DoI could not always be certain that theinformation was complete.
� Answering public and Parliamentary requests for information about contracts.
� Meeting corporate requirements for managementinformation.
� Providing summary reports for Contract and Project Managers.
Proposal
In 1999 DMR was commissioned to develop astatement of business requirements for a ContractsRegister application to meet these needs and toreport on:� technical issues;� business processes potentially affected by
the introduction of a Contracts Register; and� risks in implementation.At the same time it was decided to establish anInterim Contracts Register in Oracle Financials, tosupport contract reporting requirements relating toconsultancies. This system would record only basiccontract details and expenditure. It would not providea permanent solution.
Market investigation
Concurrently with the DMR study DoI began a marketsearch to discover whether packages were availablein the market that would meet its Registerrequirement. This included:� investigation by DMR itself;� a request to the Gartner Group;� Internet searches; and� enquiries through personal networks and contacts
with other government organisations in Australia.
Searches by DMR and the Gartner Group provedfruitless. Department enquiries, however, revealedthree potential vendors for a Contract ManagementSystem (CMS), all of whom were invited todemonstrate their product to the Department. Ofthese, only one provided not only the functionalitythat the Department required but also a good fit withDoI’s technical architecture offering the promise of arobust and low risk solution that could be deployedacross the Department’s Common Desktop ServicesEnvironment. This was a Lotus Notes applicationdeveloped for the Australian Capital Territory (ACT)Government by a small Canberra-based firm, FultonTechnology Pty Ltd.
Departmental Procurement Activities 27
28 Departmental Procurement Activities
The solution
The Fulton Technology CMS had been designed forand was already being used by the government in the ACT. The advantages of this system were that it:� contained both a Contracts and Tenders module;� had been tried and tested and proved to be
robust;� provided extensive reporting capabilities;� offered capabilities that could be used to profile
the Department's contracting and developvaluable commercial intelligence;
� contained additional data options for contractmanagement, for example, fields to record supplierperformance, insurance details and so forth;
� required minimal adaptation to suit DoI purposes;� could be developed to interface with other DoI
applications;� avoided the need to develop customised software;
and� proved relatively inexpensive at $75,000 inclusive
of GST and customisation for special Victorianrequirements.
CMS functionality
Considerations for CMS functionality included how to implement the following:� Procurement policy
Procurement and contracting policy needed to be analysed within the framework of:– VGPB Supply Policy;– Building Policy;– Other Victorian Government Policies; and– DoI Policy.
� Reporting requirements
For reporting purposes it was necessary to:– identify the types of reports required;– determine the data fields to be included
in each contract; and– nominate mandatory fields for report extraction
in line with best practice.
� Panel contracts
We needed to determine how to enter whole-of-government contracts and DoI panelarrangements against each of the Department'sDivisions.
� Business Rules
Departmental Business Rules and procedureswere revised to make the system work to bestadvantage and to align with DoI’s increasinglydisciplined approach to financial, contract andproject management.
Specific changes to DoI Business Rules thataccompanied the introduction of the CMSincluded changes to rules governing:– contractors and consultants;– purchase requisitions/orders;– procurement value thresholds; and– payment of invoices.
� Oracle Interface
Importantly also, the Register had to be linked with Oracle Financials so that for the first timeexpenditure and commitments could be recorded against each contract.
Implementation
As well as engaging Fulton Technology to supply and customise the CMS, DoI engaged a Victoriancompany, LNB Consulting–a member of its LotusNotes developer panel–to project manage systemimplementation. This proved to be a sound strategythat facilitated communication with the developer aswell as providing a Melbourne-based capability forproject management.
Data from the Interim Contracts Register wasextracted to a spreadsheet and each Division wasasked to cleanse contract details and completeadditional contract information if it was available. Thedevelopers then migrated this data to the CMS. Thesystem was implemented across DoI with effect from1 July 2002.
The cutover to CMS@DoI went smoothly and thesystem is performing to specification.
Post implementation
The post implementation phase was under way whenthis case study was written. Early feedback suggeststhat the CMS application has been well received. Thesystem is easy to use as its interface is simple andintuitive and DoI staff are familiar with the Lotus Notesplatform.
Issues arising from the implementation are closelymonitored and the Change Management process is expected to continue for several months.
In summary, the CMS has been implementedsmoothly, on time and within budget in a relativelyshort timeframe. Users report that the system is easyto use and have been supportive in the handling ofimplementation issues, including the fine tuning of the Business Rules.
Further information
For further information contact DoI, Contract Serviceson (03) 9655 8525.
Victoria Police: Development of the Victoria PoliceAccredited Purchasing Unit Secretariat Intranet Site
When the Victoria Police APU Secretariat wasestablished in its current format in 2001 it was giventhe key function of providing training and educativeinitiatives to staff engaged in procurement activityacross the organisation. As part of planning for futuretraining and educative programs, the Secretariatconducted a review and established that:� a written manual was the primary organisational
tool to access information in relation toprocurement. The manual was available via theIntranet site, but was not widely known of oraccessed across the organisation;
� a limited number of staff were aware of the VGPBwebsite. However, there were problems with bothaccess to the site (as Internet was not availableacross the organisation until April/May 2002) andwith the fact that it was not specific to VictoriaPolice; and
� there was strong support for an interactiveprocurement site which reflected purchasing policyand guidelines as they applied to Victoria Police.
During this review process research was conductedinto other procurement sites within both the local andstate government spheres. With the support of theAPU, funding was made available to the Secretariatto engage contractors to assist in the development of a dedicated procurement site.
As a result of research and of the review, thefollowing modules were determined as providing thefunctionality that the site’s users would require:� How to:
– a simple step-by-step guide to purchasing� Toolbox:
– containing forms, templates and checklists� Induction:
– a detailed guide to the procurement processstructured to reflect spending and provideinformation through all stages of theprocurement cycle (for consistency this cyclereflects the five-stage procurement cycle of theVGPB)
� Training Calendar:– an online booking system which enables staff to
view a training calendar and book directly fromtheir desktop. A link to PACCER training is alsoprovided
� Current Contracts:– providing details of all Victoria Police contracts
and a link to the VGPB Whole-of-GovernmentContracts site
� What's New: – providing the latest news and information
updates� APU Submissions:
– a facility to lodge submissions with the APUelectronically
� Information Work Flows:– targeting specific procedures and providing
information and direction via an interactiveprocess
Following initial development, testing was conductedwith a focus group, and adjustments were made tothe site to reflect the outcomes of the testingprocess. After a number of delays associatedprimarily with IT issues the site was made available totwo work groups for further testing in June 2002 andlaunched across Victoria Police in August 2002.
It was identified early in the development process thatquick direct access to the site was critical and thatthe site needed to be recognised as a resource forthe entire organisation. Therefore the decision wasmade to make the site available via the Victoria PoliceIntranet site’s homepage.
Positive feedback about the site has been received.However, it is important that the site does notstagnate and accordingly planning for furtherdevelopments is already in place, including:� connectivity with an e-tender box facility; and � an online, accredited training and testing facility.
Departmental Procurement Activities 29
30 Departmental Procurement Activities
Departmental ProcurementActivities
Introduction
Under section 54C(2e) of the FinancialManagement Act 1994, the VGPB requiresaccountable officers to provide Annual SupplyReports on: � purchase requisition approvals � compliance with government policy� status of procurement system developments� status of procurement training activities� APU membership, meeting attendance and
procurement skill levels� overview of performance against purchasing
management plans� approvals by the accountable officer
The data covers requisitions considered, and eitherapproved by the APUs or sent to the VGPB forapproval. It does not include information about minorpurchases not requiring APU approval, that is, thosepurchases less than $100,000.
Alignment of Departments and APUs
Within the Victorian Government there are ninedepartments and eight APUs:
� There are two APUs within the Department ofJustice portfolio, with Victoria Police having aseparate APU.
� Two departments, the Department of Treasury and Finance and the Department of Premier andCabinet, have formed a joint APU known as theCentral Agencies APU.
� For this reporting period, the Department ofTourism, Sport and the Commonwealth Games,established in February 2002, shares the servicesof the Department of Innovation, Industry andRegional Development’s APU.
Compliance with Policy
Departments are required to report all breaches of supply policies in their Annual Compliance andSupply Report. The most common process breach isthe commissioning of additional works against a pre-existing contract without appropriate procurementprocess approval.
Departments indicated that in 2001-02 there wereeight breaches with a total value of $6,671,198. Thisequates to 1.3 per cent of procurement transactionsassessed by APUs and the VGPB, and less than 0.5 per cent of the total value.
Table 7 summarises the breaches of supply policiesreported to the VGPB.
Table 7:
Supply Policy Breaches 2001-02
Department Number of Number of Total ValueProcess Breaches Resultant Contracts ($)
Department of Education and Training 1 1 520,000
Department of Infrastructure 1 1 2,200,000
Department of Justice 3 3 2,344,151
Department of Natural Resources and Environment 2 2 1,538,814
Department of Treasury and Finance 1 1 68,233
TOTAL 8 8 6,671,198
Departmental Procurement Activities 31
Financial Year1 1997-982 1998-993 1999-004 2000-015 2001-02
ComplianceLevel (%)
Figure 6:
Department Purchasing Compliance (Compliance Index by Process) 1997-98 to 2001-02
92
93
94
95
96
97
98
99
100
1 2 3 4 5
Table 8:
Number of APU Requisitions by Department or Agency 1997-98 to 2001-02
APU 1997-98 1998-99 1999-00 2000-01 2001-02
Department of Education and Training 51 67 66 73 85
Department of Human Services 237 235 174 134 97
Department of Infrastructure 23 23 16 40 48
Department of Innovation, Industry and Regional Development 20 30 15 35 42
Department of Justice 46 75 68 68 90
Department of Natural Resources and Environment 57 85 44 79 66
Department of Premier and Cabinet 10 21 12 17 15
Department of Treasury and Finance 60 78 33 39 72
Victoria Police 48 56 39 41 61
TOTAL 552 670 467 526 576
Figure 6 compares this year’s compliance level to previous years.
APU Requisitions
APUs considered 576 requisitions (includingvariations) with a total value of $1,616 million foreither their direct approval or for their endorsementand forwarding to the VGPB to approve. The average requisition value was $2.81 million.
As table 8 and figure 7 show, DHS processed thelargest number of requisitions (97), which was areduction from the previous year. Conversely, DE&T,DoI, DoJ, DIIRD, DTF and VicPolice saw increases in their major contracting activity during the year.
32 Departmental Procurement Activities
The value of requisitions is shown in table 9 andfigure 8. Departmental requisitions in 2001-02increased in comparison to last financial year, exceptin DoI and DHS. The significant increase incontractual commitments in DIIRD and DTF can be attributed to the establishment of whole-of-government contracts in 2001-02, and, in the case of DE&T, can be attributed to the establishment offour large panel contracts for the provision of ITrelated goods and services and other strategicpurchases.
Table 9:
Value of APU Requisitions ($million) 1997-98 to 2001-02
APU 1997-98 1998-99 1999-00 2000-01 2001-02
Department of Education and Training 29.7 115.6 113.8 57.5 425.1
Department of Human Services 297.6 182.6 163.0 213.6 125.6
Department of Infrastructure 17.3 23.4 16.0 28.3 23.5
Department of Innovation, Industry and Regional Development 6.7 31.3 38.6 9.1 20.6
Department of Justice 47.7 41.0 13.4 58.7 79.7
Department of Natural Resources and Environment 127.5 173.3 60.6 113.1 104.8
Department of Premier and Cabinet 3.8 10.2 5.4 10.1 15.8
Department of Treasury and Finance 57.7 98.1 20.8 51.1 545.8
Victoria Police 21.9 220.0 3.3 43.7 95.2
TOTAL 610.1 895.5 466.0 585.1 1,616.1
Number of Requisitions
Department1 DE&T2 DHS3 DIIRD4 DNRE5 Dol
6 DoJ7 DPC8 DTF9 VicPolice
Figure 7:
Number of APU Requisitions 1997-98 to 2001-02
1997-981998-991999-002000-012001-02
0
50
100
150
200
250
Financial Year
1 3 5 72 8 964
In 2001-02 the Central Agencies APU approved themost requisitions by value, equating to 34 per cent($545.8 million) for DTF and 1 per cent ($15.8 million)for DPC of all requisitions, whilst DE&T APU dealtwith 26 per cent ($425 million) of the total (figure 9).The Central Agencies APU approved the highest totalvalue of requisitions, due to the establishment of fivewhole-of-government contracts during this financialyear. These contracts, including the provision ofstationery, electricity, fuel, probity auditors andadministration, professional and executive levelstaffing services, make up $376.55 million or 68.9 per cent of the Central Agencies APUrequisitions.
Departmental Procurement Activities 33
Value of Requisitions ($million)
Department1 DE&T2 DHS3 DIIRD4 DNRE5 Dol
6 DoJ7 DPC8 DTF9 VicPolice
Figure 8:
Value of APU Requisitions ($million) 1997-98 to 2001-02
1997-981998-991999-002000-012001-02
0
100
200
300
400
500
600
Financial Year
1 3 5 72 864 9
Figure 9:
Percentage of APU Requisitions by Value ($) 2001-02
DE&T 26%
DHS 8%
DIIRD 12%
DNRE 6%Dol 1%
DOJ 5%
DPC 1%
DTF 35%
VicPolice 6%
34 Departmental Procurement Activities
Value of Requisitions ($million)
Department1 DE&T2 DHS3 DIIRD4 DNRE5 Dol
6 DoJ7 DPC8 DTF9 VicPolice
Figure 10:
Average Value of APU Requisitions ($million) 1997-98 to 2001-02
1997-981998-991999-002000-012001-02
0
1
2
3
4
5
6
7
8
Financial Year
1 3 5 72 864 9
The average value of requisitions is shown in table 10 and figure 10.
Table 10:
Average Value of APU Requisitions ($million) 1997-98 to 2001-02
APU 1997-98 1998-99 1999-00 2000-01 2001-02
Department of Education and Training .59 1.73 1.72 .794 5.00
Department of Human Services 1.26 .78 .94 1.59 .42
Department of Infrastructure .75 1.02 1.00 .71 .49
Department of Innovation,Industry and Regional Development .34 1.04 2.57 .26 4.78
Department of Justice 1.04 .55 .19 .86 .89
Department of Natural Resources and Environment 2.24 2.39 1.38 1.43 1.59
Department of Premier and Cabinet .38 .48 .45 .59 1.05
Department of Treasury and Finance .96 1.26 .63 1.31 7.58
Victoria Police .46 3.93 .88 1.06 1.56
AVERAGE 1.10 1.34 1.00 1.11 2.81
PROCUREMENT EXPENDITURE DATA–PURIST
The Purchasing Information System
(PURIST) was designed to meet the
VGPB’s responsibility under section
54B(d) of the Financial Management
Act 1994.
36
PR
OC
UR
EM
EN
T E
XP
EN
DIT
UR
E D
ATA
–PU
RIS
T
PURIST Since 1997 PURIST data has been captured byVictorian Government departments on a range of goods and services. The data is reported toProcurement Group, which then aggregates the data. The PURIST data is extracted fromdepartmental financial systems and shows actualpurchases by category. By contrast, the datareported in previous sections of this report is forpurchasing expenditure greater than or equal to$100,000 approved by APUs during 2001-02.
PURIST data also includes expenditure onconstruction goods and services. These activities areoutside the VGPB’s scope, and are not reported inAPU data. A major expenditure item in PURIST ispayments to private companies operating publictransport services. This expenditure also falls outsidethe VGPB’s scope.
Procurement Group and departments can usePURIST to:
� evaluate opportunities for improved procurementarrangements;
� monitor trends in agencies and the marketplace;� monitor use of centrally managed whole-of-
government contracts; and� fulfil statutory reporting requirements.For more information about PURIST, visit the VGPBwebsite at www.vgpb.vic.gov.au/govbuy/purist.htm.
PURIST System Development
Procurement Group with the assistance of thePURIST User Group, is reviewing the currentpurchasing database and assessing options toimprove the quality of the data collected. In particular,the review will examine the impact of newtechnologies, EC4P and the UNSPSC classificationsystem. The VGPB will then consider alternatives forbetter data collection to meet the information needsof the departments. The Review of the PurchasingDatabase section on page 12 provides moreinformation on this process.
Government Reporting through PURIST
Government Expenditure
Overall, expenditure on the range of goods andservices purchased by Victorian Governmentdepartments was a little over $2.44 billion. Thisrepresents a 6.1 per cent increase, approximately$141 million, over the expenditure for 2000-01.Expenditure on services is currently nearly four times greater than expenditure on goods. Figure 11illustrates the changes in goods and servicesexpenditure over the period 1997-99 to 2001-02.
Top 20 PURIST Classes
Figure 12 shows the pattern of expenditure for the top 20 PURIST classes. Six classes topped the $100 million mark with expenditure levels falling fairlysharply thereafter. By far the highest expenditure is for Supporting and Auxiliary Transport Services at $618 million. The next highest expenditure class wasBusiness Services not elsewhere classified (NEC) at$296 million. This expenditure includes costs ofpremises and general utilities.
Financial Year1 1997-982 1998-993 1999-004 2000-015 2001-02
Expenditure($million)
Figure 11:
Goods and Services Expenditure 1997-98 to 2001-02
1 2 3 4 5
GoodsServices
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Procurement Expenditure Data–PURIST 37
Expenditure($million)
PURIST Class1 Supporting and Auxilary Transport Services2 Business Services NEC 3 Professional, Engineering and Technical Services4 Land Transport Services5 Intangible Assets6 Construction Work7 Computer and Related Services8 Other Professional/Scientific/Technical Consultancy Services9 Post and Telecommunications Services10 Leasing or Rental Services Without Operator
11 Services to the Community as a Whole12 Hotel and Restaurant Services13 Products of Wood, Cork, Straw and Plaiting Materials14 Office, Accounting and Computing Machinery15 Educational Services16 Office Consumables and Supplies17 Aviation Services18 Furniture, Other Transportable Goods NEC19 Health and Social Services20 Refined Petroleum Products
Figure 12:
Top 20 PURIST Classes 2001-02
0
100
200
300
400
500
600
700
1 6 10 152 543 14 1716131211987 201918
Sourcing Patterns by Location
Figure 13 shows that three-quarters of departmentalgoods and services are sourced from Melbourne.Figure 14 shows that Melbourne has consistentlybeen the dominant source of supply over the period1997-98 to 2001-02. The percentage of supply for Melbourne has fluctuated between a high of 78 per cent in 1997-98 and a low of 70 per cent in 2001-02.
Figure 13:
Sources of Government Supplies 2001-02
Regional Victoria 13%
Interstate 12%
Melbourne 75%
38 Procurement Expenditure Data–PURIST
Figure 14 also shows that sourcing from regionalsuppliers increased from 11 per cent to 13 per centover the period 1997-98 to 2001-02. Sourcing fromregional suppliers peaked in 2000-01 with nearly 16 per cent of goods and services being sourcedfrom regional suppliers.
Sourcing Patterns by PURIST Groups
Figure 15 shows the top 20 PURIST classespurchased from regional vendors. The top twopurchase classes are Transport ($133 million) and Business Services NEC ($50 million).
Expenditure(%)
Financial Year1 1997-982 1998-993 1999-00
4 2000-015 2001-02
Figure 14:
Regional Supplier Index 1997-98 to 2001-02
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5
MelbourneRegional VictoriaInterstate
Expenditure($million)
PURIST Class1 Supporting and Auxilary Transport Services2 Business Services NEC 3 Construction Work4 Intangible Assets5 Professional, Engineering and Technical Services6 Agricultural Services NEC7 Land Transport Services8 Products of Wood, Cork, Straw and Plaiting Materials9 Hotel and Restaurant Services10 Leasing or Rental Services Without Operator
11 Motor Vehicle Sale, Maintenance and Repair12 Food Products NEC13 Other Services NEC14 Other Professional/Scientific/Technical Consultancy Services 15 Educational Services16 Building Supplies NEC17 Furniture, Other Transportable Goods NEC18 Aviation Services19 Transport Equipment NEC20 Machinery NEC
Figure 15:
Top 20 PURIST Classes Purchased from Regional Vendors 2001-02
0
30
60
90
120
150
1 6 10 152 543 14 1716131211987 201918
Glossary
ANZSCC Australia New Zealand Standard Commodity Classification
APU Accredited Purchasing Unit
BA Bachelor of Arts
CFRM Commercial and Financial Risk Management
CMS Contract Management System
DE&T Department of Education and Training
DHS Department of Human Services
DIIRD Department of Innovation, Industry and Regional Development
DNRE Department of Natural Resources and Environment
DoI Department of Infrastructure
DoJ Department of Justice
DPC Department of Premier and Cabinet
DSRD Department of State and Regional Development became the Department ofInnovation, Industry and Regional Development and the Department of Tourism,Sport and the Commonwealth Games in February 2002
DTF Department of Treasury and Finance
DTSCG Department of Tourism, Sport and the Commonwealth Games
EC4P Electronic Commerce for Procurement
e-commerce electronic commerce
e-procurement electronic procurement
e-tender box electronic tender box
FAPPcos Funding and Purchasing Policy Contact Officers
FRC Financial Reporting and Control
IT Information Technology
MLC Member of the Legislative Council
MP Member of Parliament
NEC Not elsewhere classified
PACCER Procurement and Contracting Centre for Education and Research
procurement all activities relating to the purchase of goods and services within an organisation
Procurement Group a group within Commercial Division, DTF that provides secretariat and other services to the VGPB
PURIST Purchasing Information System. Provides dollar value and other data on goods and services purchased by the Victorian Government
the Hon the Honourable
UNSPSC United Nations Standard Product and Services Classification
VGPB Victorian Government Purchasing Board
VicPolice Victoria Police
www world wide web
39
Index Page
About the VGPB 8
About this Annual Report 5
Accredited Purchasing Unit Activities 24
Achievements in 2001-02 6
Alignment of Departments and APUs 30
APU Case Studies 26
APU Requisitions 31
Chairperson’s Report 6
Compliance with Policy 30
Contract Management Improvement Program 11
Contract Management System at DoI 27
Departmental Procurement Activities 30
Development of Procurement Intranet Site at Victoria Police 29
Functions of the VGPB 8
Funding and Purchasing Policy Contact Officers’ Network at DHS 26
Future Developments 7
Glossary 39
Government Reporting through PURIST 36
List of Figures and Tables 4
Management and Review of Accreditation Standards 11
Meeting Attendance 10
Members of the VGPB 10
Mission 1
Other Activities 2001-02 13
Outer-Budget Agency Seminars 13
Overview of the VGPB 8
PACCER National Network 15
PACCER Presenters Panel 15
Powers of the VGPB 8
Procurement Approvals Process 18
Procurement in 2001-02 18
Procurement Policy Development and Refreshment Project 11
Purchasing Information System (PURIST) Expenditure Data 35
Purchasing Requisitions in 2001-02 18
Purchasing Trends For Goods And Services 18
PURIST 36
PURIST System Development 36
Reporting Relationship 9
Review of the Purchasing Database 12
Stakeholder Communications Strategy 12
Strategic Priorities 2001-02 11
VGPB Website Functionality Review 16
Vision 1
Whole-of-Government Contracts 22
Winning Government Business Seminars 15
40