Victorian Government Purchasing Board
Achieving Excellence in Government Procurement

OVERVIEW

VicFleet and the Standard Motor Vehicle Policy (SMVP)

The government has a centralised framework for the delivery and management of fleet vehicles that features an in-house service provider (and key stakeholder) VicFleet.

The management of the government’s Standard Motor Vehicle Policy (SMVP) is the responsibility of VicFleet. The SMVP is a WoVG framework to optimise the management and use of government vehicle assets.

The SMVP maintains a focus on key fleet objectives including fleet efficiency, vehicle and passenger safety, and environmental sustainability.

Amendments to the SMVP

Two key changes to the SMVP will assist in meeting the Government’s fleet efficiency agenda. In summary these are:

1.     The SMVP has been amended to account for the end of local manufacturing – the ‘purchase Australian made vehicles’ policy has been replaced with the requirement for government entities to purchase from the Approved Vehicle List (AVL).

The AVL is a list of best value for money (VFM) vehicles  in each vehicle segment (based on whole of life costings), which will be reassessed as market conditions, models and safety features change. VicFleet is responsible for conducting the VFM assessments on individual vehicles in each segment, and for the subsequent composition and renewal of the AVL.

In order to undertake the VFM assessments, VicFleet require a range of contracted suppliers to ensure best value vehicles in each market segment are captured.

2.     The Government has agreed in principle to expand the application of the SMVP to include all General Government (GG) agencies.

This further expands VicFleet’s role and the use of the government’s Finance Lease Facility (FLF) by expanding its application to an additional 8,000 GG vehicles (estimated).

Tender process

The Department of Treasury and Finance released an open Request for Tender (RFT SS-01-2018) for the supply of Motor Vehicles and related services to the market on 19 February 2018, which closed on 16 March 2018.

The objective of the RFT was to support the government in achieving its fleet efficiency agenda by providing a range of pre-qualified suppliers eligible for further assessment and potential inclusion to the AVL.

18 suppliers have been recommended for inclusion to the State Purchase Contract (SPC) panel, which commenced on 1 May 2018.

The SPC agreement term is ongoing and will remain in force until DTF cancels a pre-qualification or dissolves the panel. DTF may also refresh the panel at its discretion. It is expected that the first refresh period will not occur until early 2019.

SPC objective

The objective of the SPC contract is to provide motor vehicles for the State’s ongoing service delivery requirements.  The State uses the SPC for the acquisition of vehicles in three key areas:

1.     Service delivery - ongoing operational requirements of government including child protection, fire-fighting, policing and other front-line government services to the community,

2.     Public sector transport services – vehicles for delivery of key policy functions such as inspectors, case workers, meetings, and

3.     Executive vehicles – for executive remuneration purposes.

Key SPC benefits/changes

The key benefits of the SPC are:

  • a range of pre-qualified suppliers bound by standard contract terms and conditions,
  • discounted price catalogue (ceiling rates) available for each supplier that includes related services such as accessories, pre-paid service and roadside assistance,
  • price protection for 90 days,
  • panel scope has been increased to include heavy vehicles up to 8 tonnes,
  • the contract access fee (CAF) has been abolished,
  • measurement and monitoring of performance against the contract has improved.

Lead Agency
Department of Treasury and Finance
Conditions of Use
Mandatory
Reference Number
SS-01-2018
Arrangement
Open panel
Start Date
01/05/2018
End Date
Primary Contact
Darren Pietrzak
Category Manager
Department of Treasury and Finance
Ph: (+613) 9651 5047
Email: darren.pietrzak@dtf.vic.gov.au
Secondary Contact
Marco Martini
Senior Category Manager
Department of Treasury and Finance
Ph: (+613) 9651 1556
Email: marco.martini@dtf.vic.gov.au

Who can access this SPC?

Mandated Departments

Click here for the full list.

Mandated Agencies

Click here for the full list.

Departments and agencies bound by Victorian Government Purchasing Board policies must purchase from the SPC. Refer to the above lists:

Subject to approval by the lead department, other government owned or supported organisations such as not-for-profit, councils and other government bodies may access the SPC on a discretionary basis. Consult the category manager to confirm eligibility.

Departmental Contract Managers

VicFleet (DTF) is in-house fleet management provider and is the key point of contact between the SPC category manager and the departments. VicFleet is responsible for resolving operational issues raised by contract users and suppliers.

Supplier Details

The SPC is an open panel and currently has 16 suppliers.

BMW Australia

Fiat Chrysler Australia (includes Jeep)

Ford

General Motors Holden

Hyundai

Iveco Trucks

Kia Australia

Mercedes Benz Passenger

Mercedes Benz Vans

Mitsubishi Australia

Nissan Australia

Peugeot

Renault

Subaru

Toyota Australia

Volkswagen (includes Skoda)

What you can buy from this SPC

SMVP and vehicle selection

Key policies within the SMVP will directly impact the operation of the Panel and selection of Motor Vehicles made by Customers. Accordingly, customers will select Motor Vehicles based on operational and SMVP requirements, including:

  • only passenger, sports utility and light commercial motor vehicles on the AVL are permitted for lease or purchase by any Customer bound by the SMVP,
  • The AVL will be published on the VicFleet website and will be determined based on vehicle safety, environmental performance and whole of life cost;
  • The AVL will be updated as vehicle models, pricing and safety features change;

Exemptions to the SMVP

Passenger, sports utility and light commercial vehicles that are required for specific operational purposes, including emergency service vehicles and vehicles intended to transport people with a disability may be exempted if a suitable vehicle is not available on the AVL.

Victoria Police has a standing operational needs exemption.

Range of Motor Vehicles

The range of Motor Vehicles to be supplied under the SPC agreement includes:

  • Passenger Motor Vehicles,
  • Light Commercial Motor Vehicles,
  • Police Vehicles, and
  • Heavy Vehicles greater than 3.5 Tonne, as described below in Table 1.

Table 1 Range of Motor Vehicles:

Category

Description

Notes

Passenger

Sedan/Hatch/Wagon (Small)

Sedan/Hatch/Wagon (Medium)

Sedan/Hatch/Wagon (Large)

Passenger Vehicle (High Environmental Performance)

Hybrid/Electric

Sports Utility Vehicles (Small)

Sports Utility Vehicles (Medium)

Sports Utility Vehicles (Large)

Light Commercial    

4x4 Wagon (Small)

 

4x4 Wagon (Medium)

4x4 Wagon (Large)

People Mover

4x2 / 4x4 Pick up/cab chassis/utility

Van

Light Bus

Police Vehicles

General Duty Patrol & High Performance Vehicles

For detailed Victorian Police specifications refer Attachments 1 and 2

General Duty Utility

Sports Utility Vehicle (Large)

Motor Cycles

Covert Motor Cycles

Off Road Motor Cycles

Heavy Commercial

Heavy Commercial vehicles and trucks up to 8 tonnes

Related Services

The items described below are related services that agencies may purchase under this SPC. These services are not mandatory for customers to purchase:

  • Pre-paid scheduled servicing for all Motor Vehicles. Pricing schedules are available for travel up to 60, 000 km (priced separately) ;
  • Road side assistance for three years, or the full term of ownership of the Motor Vehicle by the State if ownership exceeds three years (priced separately);
  • Dealer delivery for all Motor Vehicles ordered;
  • Factory approved cargo barrier for all station wagons and SUV’s;
  • Factory warranty for a minimum of three years or 100,000 km;

RULES OF USE: How to use this SPC

How can I access this SPC?

1.    You can apply for access to this SPC here:

https://apps.dtf.vic.gov.au/apps_state_purchase_contracts

2.    Once access is granted, VicFleet will arrange login and password so clients can view the price catalogue from the VicFleet portal.

Parties using the SPC are legally required to comply with the rules of use established by the lead department for purchasing under the SPC.

Purchasing vehicles

The choice of vehicle make, model and any required accessories is the responsibility of the user department or agency based on operational requirements.

Vehicle selection is restricted to those vehicles on the Approved Vehicle List.

Registration

Initial vehicle registration is arranged by the dealer.

The fleet manager should inform the dealer where the vehicle will be delivered and what type of registration plate is required, i.e. government (red plate) or private (blue plate).

VicFleet manages registration renewal for all vehicles under the finance lease facility to a common expiry date of 1 August.  Initial registration for all new vehicles should be to the common expiry date.

Vehicle leases

VicFleet manages a whole of Government finance lease arrangement.  Funding for the finance lease is provided by Treasury Corporation of Victoria.  Under the finance lease arrangement, VicFleet is the lessor and government departments and agencies are lessees.

Under a finance lease, all the risks and benefits of ownership reside with the lessee and are subsequently reported on the lessee's balance sheet.

Lease rates

Lease rates are determined by the lease term and the whole-of-life budget, which includes:

  • depreciation (purchase price less residual value)
  • cost of funds
  • registration
  • insurance
  • end of life costs such as selling fees, transport and rectification.

VicFleet raises an invoice for the budget amount monthly.  At the end of the lease, VicFleet disposes of the vehicle, and calculates the difference between the budget amount charged and the actual costs incurred by VicFleet and adjusts the difference with a credit or debit to the client.

Under the finance lease arrangement, VicFleet is responsible for:

  • vehicle quotation
  • vehicle ordering
  • fleet information systems
  • financial reporting
  • insurance registration renewal
  • vehicle disposal
  • lease funding
  • lease establishment and termination.

Lease terms

The lease term is the period over which the vehicle is to be leased.  The standard lease term is 36 months or 60, 000 kilometres, whichever occurs first.  VicFleet offers variable lease terms up to five years, subject to a financial analysis demonstrating a saving to the State.

The correct lease term for each vehicle is determined by the number of months the vehicle is retained to travel its maximum kilometres.

For example, a pool vehicle which is expected to travel 60,000 kilometres per year would have a lease term of 12 month.  The whole-of-life lease budget is then divided by 12 payments.  Early or late return may impact on the profit or loss on sale.

Variable lease terms can be arranged through VicFleet.

Residual value

Residual value is the estimated market value of the vehicle at the end of the lease.

The residual value is established at lease inception, and this establishes the estimated depreciation over the lease term.

Residual values vary according to the vehicle model, lease term and the distance travelled.  

VicFleet sets residual values based on industry forecasts and direct knowledge of trends in second-hand vehicle markets.  A conservative approach is adopted to reduce the financial risk of significant losses on sale of vehicles.

Residual pointers:

  • vehicles with higher kilometres generally yield lower residual values;
  • vehicle colour is important; and
  • vehicles in good condition have higher residual values.

Pre-paid servicing

Pre-paid vehicle servicing (pre-paid scheduled maintenance) is available from some vehicle manufacturers under the motor vehicle State Purchasing Contract.

Pre-paid service is optional and fleet managers should specify their requirements when placing their new vehicle order with a manufacturer's authorised dealer.

Service schedules and intervals vary between manufacturers and vehicle models.  Details of vehicle service schedules are contained in the service book supplied with all new vehicles.

For further details contact VicFleet on cars@vicfleet.vic.gov.au

Service costs

Fleet managers may purchase pre-paid servicing (dependent on availability).  The associated costs are incorporated into the lease payments.

Pre-paid non-scheduled maintenance

Pre-paid non-scheduled maintenance is an extended service alternative to the pre-paid scheduled service option.

Pre-paid non-scheduled maintenance is a total maintenance package that offers convenience and administrative cost savings by eliminating the accounts handling associated with payments for vehicle servicing.

Pre-paid non-scheduled maintenance is an option available for some vehicles, and the costs are incorporated into the lease payments.

Disposal of vehicles

VicFleet disposes of all lease vehicles by public auction.  The Government's contracted provider of auction services is Pickles Auctions.

Auctions are held every Tuesday morning 10am, at 41-45 McIntyre Road, Sunshine VIC 3020.

Phone (03) 9009 3111.

VicFleet is responsible for:

  • inspecting the vehicle
  • detailing the vehicle
  • rectification
  • setting the reserve price
  • arranging the sale
  • distribution of the sales proceeds.

Please note confidential information may only be accessed and used for the purpose of joining the SPC and purchasing under the SPC.

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