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VIPP applies to all Victorian Government procurement activities, Major Projects, Major Events, Public Private Partnerships and investment support, business development and community infrastructure grants above the threshold values listed below.
Yes. Threshold levels for the application of VIPP Implementation Plans and mandatory certification were lowered from $50m and $5m to $10m and $2.5m. The new thresholds took effect from 1 July 2007 (i.e. they apply to any projects commenced on or after that date – projects commenced before 1 July 2007 but continuing after that date are unaffected).
The base thresholds for VIPP are unchanged.
The terms "Metropolitan" and "Regional" refer, respectively, to the areas within the municipal districts of the Metropolitan Melbourne Councils and all other Victorian Councils and Alpine Resorts areas, as designated under the Local Government Act 1989.
The determination of whether a project is "Metropolitan" or "Regional" for VIPP purposes relates to the location where the project is executed. Where a project is undertaken in both metropolitan and regional areas or across the whole State, metropolitan threshold levels will be used in determining whether VIPP should apply.
"Local content" refers to goods and services sourced from or industry based in Victoria, Australia or New Zealand. For the purposes of a VIPP Statement, bidders need to estimate the level of local content that a bid contains expressed as a percentage of the total value of the bid.
Many publicly funded activities such as construction and infrastructure projects or major events are described and promoted as single "projects", e.g EastLink, the Australian Synchrotron or the Commonwealth Games. Yet the delivery of these projects often entails the letting of many tenders for specific works, products and services, not all of which are above VIPP threshold levels.
How VIPP is applied will be a decision for the responsible agency, taking into account the nature of the project. As these projects often represent significant opportunities for local industry participation, it is important that VIPP should apply to the full quantum of funding of such projects, not simply to those individual tenders that exceed VIPP thresholds.
Options for applying VIPP to these projects include:
If in doubt, the agency responsible for the project should consult with DIIRD and/or the ICN prior to the project commencing to determine the way in which VIPP should be applied.
Procurement undertaken through a panel contract arrangement (i.e. where a panel of suppliers is appointed, from which individual suppliers are then selected to provide particular goods or services over the life of the contract), is subject to the VIPP where the total value of the procurement undertaken using the supplier panel exceeds the VIPP threshold levels (above $3 million in metropolitan areas and $1 million in regional areas).
In general, the application of VIPP to panel contracts can be undertaken in one of two ways.
Scenario 1:
Where the agency considers that over the life of the contract, one or more individual suppliers are likely to conduct work with a cumulative value over the relevant VIPP threshold level, it will be a condition of appointment to the panel for each supplier to complete a VIPP Statement.
Scenario 2:
Where the agency considers that it is unlikely that any individual supplier will conduct work with a cumulative value over the relevant VIPP threshold level, suppliers will not be required to complete a VIPP Statement at the time of appointment to the supplier panel. However, they should be advised that, as a condition of contract, they will be required to complete a VIPP Statement should they obtain work through the panel with a cumulative value over the threshold level. If this occurs, the VIPP Statement may report on local content and employment outcomes that the supplier has achieved to date through work won under the panel contract.
The determination of which of the above scenarios should apply is to be made by the responsible agency, having regard for the size of the contract, the number of suppliers and the nature of the allocation of work under the contract. (See Section 3.3 of the VIPP Guidelines for further details).
VIPP documentation is used in the following ways:
Where a tenderer’s VIPP data is not submitted or found to be non-compliant or having not made a genuine attempt to identify opportunities for local industry participation, the agency letting the tender may deem the tender non-compliant.
Where VIPP outcomes reported by a contractor do not meet the levels committed to in the contract, the agency should identify whether there has been a valid reason for this (e.g. an unavoidable change of supplier or product that resulted in a drop of local content or employment). Where no valid reason can be identified, the agency may determine that this represents a breach of contract and impose such remedies as it sees fit.
There is no mandatory local content level that bidders must commit to in their VIPP Statements. Instead the determination of the quality of bidders' VIPP estimates must be made on an individual basis by the assessing agency, having regard for the size and capability of local firms and suppliers in the industry concerned. Where agencies are unable to make an accurate assessment of the adequacy of bidders’ VIPP data and commitments, they should contact ICN and/or DIIRD.
By requiring tenderers to consider local industry opportunities at the competitive stage of a tender process, they are more likely to make serious VIPP commitments, knowing there is a possibility these will be considered in the selection process. Moreover, making VIPP a condition of contract also ensures that bidders will make a serious attempt to consider local industry.
Agencies should also ensure that in assessing value for money, it is considered on a "whole of life" basis (including the transitioning-in, the contract term and the transitioning-out phases of the relationship between the Agency and a Tenderer), rather than simply an assessment of "lowest price". Considering value for money on a "whole of life" basis can deliver significant advantages for local suppliers in areas such as technical support, maintenance and after sales service compared with overseas suppliers. (See Section 3.2 of the VIPP Guidelines for further details).
Agencies must ensure that tender and design specifications are drawn up in such a way as not to deliberately or inadvertently exclude local suppliers from having full and fair opportunity to tender for projects. Where such specifications lead to the exclusion of local products or suppliers, the VIPP requires that there be a valid justification for this that includes evidence that comparable local products or suppliers do not exist or are not of the necessary technical or performance standard.
Agencies should consult with DIIRD or ICN Vic prior to the approval of a design specification that excludes local supplier from participation. Bidders are also encouraged to consult the Government agency, as well as DIIRD or ICN Vic on how best to incorporate achievable local supplier participation levels into the design. (See Section 3.1 of the VIPP Guidelines for further details).
VIPP applies to projects with multiple funding sources, only when the Victorian Government funding contribution exceeds the relevant threshold for VIPP.
No.
The ICN (Industry Capability Network) is a not for profit organisation funded by the State Government to promote Australian Industry by increasing local participation in all major procurement activities. ICN provides a technical service to buyers and nominates competitive manufacturers of locally made goods and services across all industry sectors and major projects.
ICN facilitates the VIPP of behalf of the Department of Innovation, Industry and Regional Development and the Victorian Government. They also provide advice to government departments and to companies seeking to provide goods and services to government and its suppliers.
For government agencies ICN provides:
For tenderers and industry ICN provides:
It depends on the scale and complexity of the project, but it is usually possible for the ICN to certify an Implementation Plan within 24 hours of lodgement. Consultation regarding the development of the Plan usually requires a meeting of 1-2 hours with the ICN.
