Procurement in Practice
Aligning Capacity, Strategy and Sustainable Outcomes
The Procurement in Practice project (the project) has focused on fostering collaborative procurement practices across the Victorian local government sector. The project has been fully funded and supported by LGV. This project is an extension of the reform activities that have been delivered through the Procurement Excellence program of LGV’s Councils Reforming Business program.
The Local Government Procurement Strategy (2008) (PDF 675 KB) or (Word 816 KB) identifies potential annual savings of $180–$350 million available to the sector through improved strategic procurement practices. The strategy makes a number of findings and recommendations that support the benefits of collaborative procurement, particularly in rural areas. This project has provided evidence of the benefits available to local government through a collaborative approach to procurement, supporting the findings of the strategy.
Who participated and what was collaboratively procured?Central Highlands - Regional Victoria Group
- Ararat Rural City Council
- Ballarat City Council
- Golden Plains Shire Council
- Hepburn Shire Council
- Pyrenees Shire Council
The projectCommencing in December 2011, LGV has worked closely with the five councils to combine their bituminous road resealing expenditure - which currently is in excess of $4.6 million a year. By joining forces and using their collective purchasing power the five participating councils were able to drive down the costs of procurement and make considerable savings. Through a public tender process, the five councils called for interested tenderers to provide a schedule of rates contract for bituminous resealing works with provision of rates for line-marking. Given the size of the procurement, the process from the development of tender documentation and specifications through to tender evaluation and recommendation was overseen by an independent procurement auditor.
- Each council has resolved to enter into a three year contract with two, one year extension options, with the one recommended supplier.
- New contracts for bituminous road resealing works in these councils will deliver an annual savings of over $630,000 when compared to current contract prices.
- If all five councils elect to take up the contract option for extensions, the combined savings to the community will be in the order of $3.1 million over the life of the contract.
Members of the project team
Left to Right: Rod Leith (Ballarat City Council), Kate Edwards (Golden Plains Shire Council), Terry Matthews (Pyrenees Shire Council), Alex Bonner (Ararat Rural City Council), Brian Coustley (Hepburn Shire Council), Phillip Hoare (Pyrenees Shire Council), Gary Smith (Hepburn Shire Council). Absent from photo: Alison Tonkin (Ararat Rural City Council), Andrew Miller (Ballarat City Council) and Bill Knight (Golden Plains Shire Council).
Message from the MinisterRead the Minister for Local Government’s announcement of the projects success.
This project not only delivered a successful aggregated procurement but the templates developed as part of the project are available for use by the broader sector. These templates are for information purposes only and provided on the basis that users will be responsible for making their own assessment on the use of the information they contain.
The attached observations and next steps have been identified by LGV.
If you would like further information on the project, please contact Local Government Victoria.