State purchase contracts

Expected to be tabled in September 2018

Overview

Objective To determine whether state government agencies are realising benefits in procurement through use of state purchase contracts (SPC).

Issues Each year, state government agencies spend significant public funds on goods and services. The Victorian Government Purchasing Board (VGPB) uses a range of mechanisms to ensure procurement activities are conducted in line with government policy, including fulfilling its role under the Financial Management Act 1994 to develop and approve policies, provide guidance on strategic procurements, and discuss procurement policy and practice matters.

State purchase contracts (SPC) aim to achieve value for money across public sector agencies by aggregating demand for goods and services—ranging from IT services to energy provision. SPCs are also intended to reduce duplication of process and drive continual improvement over the life of a contract. SPCs are mandatory for some government agencies, but not all. In some cases, SPCs may also be utilised by statutory authorities, local councils, organisations that are partly funded by government, and charitable or not-for-profit organisations.

At June 2017, there were 34 SPCs—23 mandatory and 11 non-mandatory, spanning 14 different goods and service categories. In 2016–17 the combined annual spend for these SPCs was approximately $1.47 billion.

VGPB's five-year strategic plan includes a priority for multi-organisation purchasing, which includes SPCs as well as other procurement models. From 1 July 2016, VGPB became more involved in oversight arrangements for SPCs, which the Department of Treasury and Finance oversaw previously.

This audit will determine whether departments are realising intended procurement benefits through SPCs. The scope of the audit does not include construction or health related goods, services and equipment.

Proposed agencies VGPB, the Department of Premier and Cabinet, the Department of Treasury and Finance, and a selection of departments and agencies.

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