How to use this Contract
Mandatory WoVG ICT Expenditure Approval Process
The Government has mandated that the twelve departments and four inner budget agencies are required to submit their ICT expenditure proposals to Department of Treasury and Finance (DTF) for approval if the expenditure is greater than $250 000 and Efficient Technology Services-related, effective from 1 July 2008.
The outer budget agencies utilising the panel arrangement should follow their own internal ICT processes.
Government clients have the responsibility to ensure their purchasing approval processes are in line with the new WoVG ICT expenditure approval requirements.
For further information on ICT expenditure approval process, please visit ICT Expenditure Approval Process.
Rules of Engagement
Introduction
This section provides guidelines to Purchasers on the processes and procedures associated with the use of the eServices Panel and how to engage a Service Provider.
Outer budgets agencies can elect to subscribe and voluntarily commit to using the eServices Panel where it meets their business requirements.
Under the eServices Panel SPC, current VGPB purchasing threshold arrangements do not apply, instead these have been replaced with quote thresholds as detailed below:
 | <$150K* | >$150K <$1 million* | > $1 million * |
| Number of quotes required | 1 quote sought | 3 quotes sought | 3 quotes obtained |
| Method of quote required | Written | Written | Written |
| Documentation required to support decision |
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* Numbers are including GST
Purchaser Responsibilities
Each Department has the responsibility to:
- Appoint a Contract Manager to act as the single point of contact for the Category Manager,
- Comply with the eServices engagement process,
- Familiarise themselves with the contract Head Agreement terms and conditions,
- Prepare, manage and obtain approvals for projects,
- Promote the use of the SPC,
- Assess Service Providers based on value for money and ensure that trail documentation supporting a purchasing decision is available,
- Establish and maintain their own relationships with Service Providers,
- Meet with the Category Manager as and when required,
- Manage the delivery of the project (including deliverables, timelines, budgets and variations),
- Issue Purchase Orders Contract and Purchase Order prior to the engagement of a Service Provider to perform works,
- Validate Service Providers details including contact details, spend data and performance date;
- Make payment to the Service Provider within 30 days of receipt of invoice,
- Maintain an issues log,
- Attend Service Providers reviews (if necessary)
- Cooperate with Service Provider, and
- Maintain confidentiality.
Engagement Process
eServices activity in government is subject to considerable scrutiny through Parliament, Freedom of Information and the office of the Auditor-General. Therefore it is vital that Purchasers maintains a clear and unambiguous trail of documentation relevant to the purchasing and decision-making processes involved with all advertising and communication activities.
The following procedure is a step-by–step guide for engaging a Service Provider.
A purchase order Contract is required to secure the services of the Service Provider.
1. Identify scope, budget and timelines
Assuming that a Service Provider needs to be engaged, each Purchaser needs to understand scope, budget and time constraints.
Purchasers will be responsible for determining timelines, project deliverables and the overall level and source of funding available for the project. These need to be clearly articulated to Service Providers and form part of the Statement of Work (SOW).
2. Prepare a Statement of Work
The SOW should specify the requirements of the project/activity and must be produced for all engagements under the eServices Panel.
The SOW must clearly identify the deliverables required for the work to be undertaken and must include the purpose and objectives of the engagement, any milestones, deliverables and any other additional information relevant to ensure that the Service Provider is able to perform work in accordance with the Purchaser’s instructions.
If required the SOW should also detail any liquidated damages associated with failure to meet delivery dates.
3. Obtain SOW Endorsement.
The relevant departmental financial delegate is still required to approve the proposed budget. If the engagement value is greater that $1 million, a Senior Manager should endorse the SOW.
The SOW should be approved based on the engagement value before the project proceeds and a Request for Quote (RFQ) is issued.
4. Finding a suitable Service Provider
Service Providers have been appointed to the eServices Panel by undergoing a rigour evaluation process. Their capability, expertise and experience have been evaluated for specific categories. Services providers have been pre-qualified to provide services for the six key categories.
Purchasers must ensure that the selected Service Provider is approved to provide services in the Service Category. The approved service categories and specialty areas for each Service Provider in the Service Provider Profile under the Capabilities tab in the eServices Online system.
Purchasers should also review the level of insurance that the Service Provider has to ensure that it is adequate and current; this information is contained within each Service Providers profile under the Insurance tab. Depending on the size of the engagement the Purchaser should assess capacity and financial stability of the Service Provider prior to engaging.
eServices Online provides capability and rate information on Service Providers within their approved service categories. It also provides details of Service Providers’ past performance reports. A Purchaser can use this information to make decision on potential suitability of a Service Provider prior to issuing a RFQ.
5. Request for Quote (RFQ)
What threshold limits apply under the eServices Panel SPC?
There is no cap on the value of engagements which may be entered into under the eServices Panel SPC, however based on the engagement size there is a varying degree of documentation required.
Once all relevant approvals have been obtained, a Request for Quote (RFQ) may be sought from the Service Provider(s) by using the template available on eServices Online in the TEMPLATES tab.
The Purchaser is responsible to distribute the SOW to the relevant number of Service Providers which will be the basis for the RFQ.
The price submitted by the Service Provider should contain the same or lower rates than those pre agreed during the tender phase. These rates are contained within eServices on-line and the Purchaser should cross reference the rates to ensure that they are in accordance with these pre-agreed maximum rates.
Purchasers should clearly specify the date/timeframe that they require the quote to be submitted by.
Where a Purchaser will issue multiple RFQ’s, the Purchaser should determine and develop evaluation criteria before issuing the RFQ. The evaluation criteria should specify how the Service Providers’ responses to the RFQ will be evaluated and should be ranked in order of importance. Evaluations should involve both qualitative and quantitative criteria to ascertain value for money.
6. Evaluation and Selection of Service Provider quotations
Purchasers should evaluate RFQ’s received in line with the evaluation criteria that they have developed. Purchasers should take into account any risk profiles such as experience, levels of insurance, financial viability and the ability to ramp up resources. The Service Provider should be selected based on the overall best value for money in accordance with VGPB policy.
http://www.procurement.vic.gov.au/CA2575BA0001417C/pages/procurement-practioners-general-procurement-requirements-application-of-vgpb-policy.
Make sure that the Service Providers response to the RFQ’s addresses the requirements outlined in the brief and provides adequate details on how your requirements will be met, including timelines and pricing.
The Purchaser has the option of requesting an interview or presentation to assist in the selection of a Service Provider for larger and more complex engagements, however all Service Providers engaged in the RFQ process must be treated equally.
7. Appointing a Service Provider
Before a Service Provider can be engaged the Purchaser is required to issue a Purchase Order approved by the relevant financial delegate for the full projected expenditure.
Purchase orders provided to the successful Service Provider invoke the contractual terms and conditions of the panel SPC unless varied as agreed and specified in the Purchase order.
The Purchaser should inform unsuccessful respondents once it has completed its selection and contracted with a particular Service Provider. It is highly recommended that a Purchaser advise the unsuccessful Service Provider on how their RFQ could have been improved or why they have been unsuccessful. Informative debriefs of unsuccessful Service Providers will improve their competitiveness within government for future work.
8. Variations to the Purchase Order
A variation to a Purchase Order can be prepared if it is:
- Consistent with the deliverables of the original SOW,
- Documented and formalised before the original project completion date,
- Approved by the appropriate financial delegate and in accordance with any internal process requirements.
The variation will be formalised by the Purchaser by issuing a new Purchase Order detailing the variations and the additional authorised expenditure.
9. Management and Payment of the Service Provider
It is strongly recommended that payment to Service Providers be linked to clearly defined milestones or deliverables.
The Purchaser is responsible for operational management of the selected Service Provider. When a Purchaser engages a Service Provider, a contractual and commercial relationship between the contracting entities is created. Where a dispute arises either during the engagement or subsequent to it, the Purchaser should immediately notify the Category Manager who will assist in resolving the dispute and ensuring that the contract terms are followed.
The Purchaser is responsible for all payments to the Service Provider via their individual budget allocations. Under the Government's Fair Payment Policy, invoices must be paid within 30 days upon receipt of a correctly rendered invoice (or any other payment period as agreed between the department and the Service Provider).
If the invoice is not paid within 30 days from the date of receipt (or other payment period), and there is no dispute regarding the invoice or the provision of goods and services, the Service Provider may make a claim for penalty interest on the outstanding debt. This policy came into effect for departments on 1 November 2004, and it applies to contracts for goods and services valued at less than $3 million.
Normal departmental processes are to be followed to monitor the actual expenditure against the SOW.
The Service Provider should be directed to forward all invoices to the relevant program area for payment. Invoices must be from the Service Provider for the project (not a sub-contractor).
10. Project Evaluation
A Service Provider is required to complete an engagement self-questionnaire online, upon completion of an engagement. On submission of a Service Provider’s engagement self-assessment form, an email alert will be sent to the Purchaser, requesting a validation of the engagement self-assessment.
The engagement validation report is pre-populated with the Service Provider’s assessment of the engagement. The Purchaser is required to either confirm the Service Provider’s assessment or adjust it to reflect their evaluation of the Service Provider.
Purchaser should note that:
- The descriptive comments made in the engagement validation report will only be accessible to the Service Provider and Purchaser involved in the engagement. This is to ensure confidentiality between the contracting parties; and
- The Service Provider’s assessment will become the default engagement validation report if the Purchaser fails to complete an engagement validation report within 21 days after the Service Provider submits the engagement self-assessment report to the Purchaser.
