Victorias new framework for public construction procurement Agency

Victoria’s new framework for public construction procurement Agency briefing - October 2018

What is public construction … any matter relating to • construction • maintenance • rehabilitation • alteration • extension or • demolition … and includes • design and construction practices • tendering processes • project delivery and • contract administration … of any improvements on land by, or on behalf of, departments and public bodies Applies to: • works • construction services

New framework for public construction procurement Framework comprises: • Ministerial Direction No 1 Tendering provisions • Ministerial Direction No 2 Contractual provisions • Ministerial Direction No 4 Community fire refuges Mandatory • Ministerial Directions • Instructions Not mandatory • Guidance • Fact sheets Effective from 1 July 2018

New framework for public construction procurement • Departments (7) • Public bodies (4, 000) • Departments (7) • Public bodies subject to Standing Directions of Minister for Finance (262) • Follow rules set by their portfolio Department (3, 700) For example: – school councils – committees of management

New key terms • Works • Consultancy • Construction Services • Selective tender: a competitive tender open only to suppliers on a register

Purpose and principles • Previously not stated • Purpose: efficient, economical and effective procurement • Overarching principles: 1. 2. 3. 4. Value for money Accountability Probity Scalability • Specific construction principles (11)

Exemption provision • Previously not available • Minister or DTF Secretary may grant an exemption • Agency or class of Agencies may apply • Exemption from specific requirements • May apply to a project or class of projects

International agreements • If International agreements apply, follow those rules • Rules not set out • Covered Agencies that must apply the rules (28 Agencies) • Which procurement is covered • Extra rules that apply • How to apply extra rules

Tendering • Planning your procurement • Dollar thresholds values • Dollar threshold values increased • Evaluation criteria • Efficiency in tenders • Forward and tender notices on central website • Tender open times • Tender documents • Evaluation criteria

Tender processes Tender process When used (values GST inclusive) Open tender – open to all suppliers Any time Selective tender: • all suppliers in relevant category of a register • at least 3 suppliers in relevant category of a register Any time Limited tender: 1 supplier Less than $50, 000 Limited tender: • at least 3 suppliers not on a register Works: Greater than $50, 000 and less than $500, 000 Services: Greater than $50, 000 and less than $200, 000 Limited tender: • bespoke arrangement Where Special Circumstances exist Limited tender: from a panel As set out in the rules of use for the panel

Probity and transparency • Probity expectations for construction • Probity and transparency • VPS Code of Conduct • Managing probity planning and support • Forward and tender notices on central website • Contract disclosure on central website • Accountability through attestation

Registers of prequalified suppliers • Registers: • Construction Supplier Register • Vic. Roads Register • Register use strengthened • Selective tender is a selection from a register • Construction Supplier Register • Vic. Roads register

Capability and continuous improvement • Debrief • Encourages assessing supplier performance • Assess supplier performance regularly • Shared reporting • Contract clauses support assessing supplier performance and sharing information and metrics

Accountability and governance • Previously not stated • Governance: – resources – framework – responsibility • Attestation of compliance in Annual Report • Portfolio support – Agencies subject to rules • Portfolio oversight – Agencies not directly subject to rules

Construction contracts • Refreshed standard form contracts available ‘Victorian Public Construction Contracts’ • reflect recent policy and legal changes • more opportunity to record variable items in schedules • additional clauses in clause-bank • • Major works – AS 2124 and AS 4300 Minor works contracts Professional services – long and short forms Request for tender conditions

Transition provisions • Registers of prequalified suppliers • Precedent contracts • notify DTF before 31 December to receive temporary approval for continued use • Attestation 2018 -19 year • applies on 30 June 2019 - for one day only

Government infrastructure investment

Tips for practitioners • Construction differs from Goods and services check the rules • Assess how your supplier performs • New thresholds apply • Use shared reporting regime • Use the current version of the refreshed contracts • Use our website • Forward and tender notices on central website • Register for our mailing list • Contract disclosure on central website • Let us know what you think

Questions and resources Questions Resources available at https: //www. dtf. vic. gov. au/in frastructureinvestment/publicconstruction-policy-andresources Contact us construction. procurement@ dtf. vic. gov. au 03 9651 5300

Construction Supplier Register: Planned operational changes Agency briefing – October 2018

Why are we making changes • To improve the consistency of how users select suppliers • To improve the consistency of user reports about supplier performance • To improve awareness and understanding of the requirements and benefits of prequalification to suppliers

What are the changes • Names and types of prequalification categories • Shared performance reporting • Practitioner registration requirements for body corporates • New CSR guides for agencies and suppliers

Prequalification category changes • Some categories like ‘Civil Engineering’ will include building and non building construction • Most, if not all, of the works categories will be mapped to the corresponding Victorian Building Authority practitioner limitations • The introduction of new sub-categories or specialisations – for example occupied unit refurbishment, high rise refurbishment and hospitals • Introduction of new prequalification categories

Shared performance reporting • new shared performance reporting regime has been developed • includes guidance about how to assess performance • the supplier is a part of the process and must be asked to provide feedback about the result of the report • past performance is expected to be considered in the assessment of future tender responses

Shared Reporting Regime

Practitioner registration requirements for body corporates • Body corporates applying for pre-qualification now need to have an appropriate Company practitioner registration with the Victorian Building Authority

Guides to the CSR Improving understanding of the CSR Two guides about the CSR have been developed to complement the new Public Construction Procurement Framework: • one targeted at Victorian Government departments and agencies and • one targeted at construction works and services suppliers

Contact the CSR Contact us at: • constructionsupplierregister@dtf. vic. gov. au

Social Procurement Framework Construction Forum 25 October 2018

Social Procurement Overview Why? • Government procurement is a major driver of the Victorian economy (~$25 billion every year) • Our purchasing decisions have a significant impact on the economy, the environment and the community • Every procurement is an opportunity to deliver social and sustainable outcomes that help build a fair, inclusive and sustainable Victoria • Small changes to the way we approach procurement can make a big difference in the lives of Victorians! 29

Social Procurement Overview What? • Social procurement is when organisations use their buying power to generate social value above and beyond the value of the goods, services or construction being procured. • In the Victorian Government context, social value means the benefits created for all Victorians when the social and sustainable outcomes in the SPF are achieved. 30

Social Procurement Overview How? • SPF jointly developed by DTF and DEDJTR – launched by Ministers on 26 April 2018 • Key features of the SPF: 1. Applies to all departments and agencies 2. Applies to procurement of all goods, services and construction from 1 September 2018, based on a scalable approach 3. Adopts a flexible approach to maximise social value 4. Promotes “direct” and “indirect” approaches to social procurement 5. Takes implementation and accountability seriously 31

SPF Implementation Update • Phased implementation of the SPF is underway • DTF and DEDJTR have reached several major milestones: 1. “Case studies and highlights” report (August) 2. Suite of guidance materials for government buyers (September) 3. Suite of guidance materials for suppliers (September) 4. Whole of government access to supplier directories (September) 32

SPF Implementation Update What’s next? • SPF measurement and reporting framework (December 2018) • Social Procurement Strategies: 1. Departments + Vic. Roads, Victoria Police and PTV (December 2018) 2. Other agencies (December 2019) 33