Victorian Industry Participation Policy (VIPP) Guidelines · Victorian Industry Participation...

Updated: 27/09/2011 Commercial in Confidence of 33 Version 4.0

VICTORIAN INDUSTRY

PARTICIPATION POLICY

(VIPP)

Guidelines Effective 1 July 2009

Victorian Government

Victorian Industry Participation Policy (VIPP) Guidelines – September 2011


Acronyms

DBI Department of Business and Innovation

ICN Industry Capability Network Victoria Ltd

SMEs Small and medium enterprises

VIPP Victorian Industry Participation Policy



TABLE OF CONTENTS

1. INTRODUCTION.......................................................................................................................... 4 1.1. Objectives of the VIPP ......................................................................................................... 4 1.2. Principles of the VIPP .......................................................................................................... 4

2. APPLICATION OF THE VIPP ........................................................................................................ 5 2.1. The VIPP Plan....................................................................................................................... 5 2.2. Use of the VIPP information in tender selection ................................................................ 5 2.3. Detail of VIPP Plan .............................................................................................................. 6 2.4. Certification and Evaluation of VIPP Plan .......................................................................... 7 2.5. Review of preferred tenderer’s VIPP Plan/contract negotiation ...................................... 7 2.6. Monitoring and Reporting .................................................................................................. 8 2.7. Strategic Projects .............................................................................................................. 10

3. ADDITIONAL ISSUES FOR AGENCIES TO CONSIDER ................................................................ 12 3.1. Project Design.................................................................................................................... 12 3.2. Value for money ................................................................................................................ 12 3.3. Panel Contract Arrangements .......................................................................................... 13 3.4. Legislation, monitoring and reporting on VIPP outcomes............................................... 14

4. THE ROLE OF DBI, ICN, AND OTHER GOVERNMENT AGENCIES.............................................. 15 4.1. Department of Business and Innovation (DBI) ................................................................. 15 4.2. Government Services Group (GSG) ................................................................................... 15 4.3. Housing and Building Policy.............................................................................................. 15 4.4. Industry Capability Network - Victorian Branch (ICN) ..................................................... 16

5. DEFINITIONS ............................................................................................................................ 17 6. EXAMPLES OF APPLYING THE VIPP IN TENDER EVALUATION ................................................ 18

Example 1.................................................................................................................................... 18 Example 2.................................................................................................................................... 19

ATTACHMENTS

Attachment 1 – Victorian Industry Participation Policy (VIPP) Plan guide

Attachment 2 – VIPP Clauses for RFT and Contract Documents

Attachment 3 – Financial Reporting Direction 25A

Attachment 4 – Definition of ‘Regional Victoria’


1. INTRODUCTION

This document introduces the principles and objectives of the Victorian Industry Participation Policy (VIPP). It highlights the features of the VIPP, as well as provides a set of general guidelines for implementing the policy. Agencies should develop their own operational guidelines, within the context of this framework, to meet the VIPP objectives in a way that suits their individual circumstances and needs of the purchasing activities undertaken. Agencies are welcome to consult with DBI to ensure that their operational guidelines are fit for purpose.

The VIPP applies to the following types of projects:

• Inner budget Government procurement (includes departments and administrative offices); • Outer budget Government procurement; • Partnerships Victoria projects; • Major Projects and Major Events; • Investment attraction grants; and • Victorian Government grants to the private sector and local Government for the provision of

infrastructure and community facilities.

These guidelines are to assist agencies in relation to procurement and construction projects for both inner and outer budget sectors. The guidelines should also be used in developing Partnerships Victoria projects, while recognising the special nature of these agreements.

The application of the VIPP to grants programs is not addressed as part of these guidelines. The VIPP applies to the grants programs on a case-by-case basis, recognising the individual nature of different grant application processes. Grant managers should consult DBI for advice on the application of VIPP to their grant programs.

1.1. Objectives of the VIPP

• Boosting employment and business growth in Victoria by expanding market opportunities for local SMEs and supply chain partners;

• Providing the main contractors for major projects with increased access to a wider range of competitive local companies that can deliver value for money;

• Promoting a cultural change in Australian business, raising awareness of the world class capabilities of local SMEs;

• Enabling Victorian companies to connect with world-best practice in workplace innovation, e-commerce and use of new technologies and materials;

• Developing the international competitiveness and flexibility of local SMEs in responding to changing global markets, by ensuring local SMEs have a fair opportunity to compete against overseas suppliers; and

• Maximising skills and training outcomes.

1.2. Principles of the VIPP

The VIPP is built on four fundamental principles that will be applied at all stages during the tendering process:

• Value: Value for money will remain the primary consideration in Government purchasing and supply decisions;

• Competitiveness: The ability of local SMEs to compete globally will be strengthened and promoted;



• No discrimination: Consistent with our international obligations, there will be no protectionism, subsidies or premiums on price; and

• Transparency: All Government tendering mechanisms and processes will be open, clear and accountable.

2. APPLICATION OF THE VIPP 2.1. The VIPP Plan

The VIPP will only apply when the Victorian Government’s funding or provision of a grant exceeds $3m in Metropolitan Melbourne and $1m in Regional Victoria.

VIPP applies to all contracting arrangements for projects above the VIPP threshold including any sub-contracted elements which may be below the threshold. Where sub-contracting occurs, it is the responsibility of the parent contractor to devise and monitor the application of VIPP across the entire project.

The Request for Tender (RFT) documentation should notify tenderers of the requirements of the VIPP (Attachment 2 provides a suggested form of words). It should provide the following information:

• That all shortlisted tenderers will be required to produce a VIPP Plan. (Where there is no shortlisting process, agencies should apply VIPP to all tenderers. If the scenario arises where application of VIPP seems impractical, agencies should consult DBI);

• That the VIPP Plan will seek information on the level of ANZ value added activities (level of local content), employment created or retained (number of jobs), and training, skills development and technology transfer, as a result of the procurement. The VIPP Plan also requires tenderers to identify the implementation process to meet their VIPP commitments. Agencies should provide forms/templates which outline the four pieces of information that will be required – a copy of the VIPP Plan template is attached (Attachment 1) and can be accessed online at www.dbi.vic.gov.au/VIPP;

• That the VIPP commitments will be included as a key criterion as part of the final tender evaluation;

• That the ICN can provide advice and assistance to tenderers in relation to their VIPP obligations free of charge;

• That all shortlisted tenderers will be required to have their VIPP Plans certified by the Industry Capability Network (ICN);

• That the agency will reject tenderers whose VIPP Plan has not been certified by ICN; • That the preferred tenderer’s VIPP commitments will be negotiated as reportable conditions

of contract; • That the winning tenderer must provide the agency with a final report that has been

certified by ICN at the completion of the project on the VIPP outcomes achieved.

2.2. Use of the VIPP information in tender selection

Information contained in the VIPP Plan will be assessed as a key criterion as part of the final tender evaluation. The determination of the scoring of the VIPP component in tender evaluation should be performed before the release of tenders.

Because VIPP applies to the procurement of a highly diverse range of goods and services, its role in each tender evaluation should be determined by the lead/responsible agency having regards for the nature of the project and the overall scoring method used in their tender evaluations.


http://www.diird.vic.gov.au/VIPP


In determining how VIPP should be assessed relative to other criteria, agencies must bear in mind that it is the objective of the VIPP that it should be influential in the tender selection process, beyond a check for basic compliance, and particularly in separating otherwise comparable tenders. Agencies should consider the nature of the particular goods or services being procured and make a judgement about the extent to which the VIPP commitments and their potential economic benefits contribute to the overall value for money proposition, alongside fit-for-purpose criteria and price. In doing this, agencies are encouraged to discuss with the ICN the nature of the project and opportunities for local supplier participation, particularly where in an agency’s judgement, consideration of VIPP within the overall tender evaluation is likely to be rated highly. This process will provide the agency with context that will assist it in interpreting the ICN’s assessment of tenderers’ VIPP Plans (see 2.4 below).

Factors that could be considered as the basis for giving a higher prominence to VIPP include:

• The level of contestability between local and overseas suppliers. Where a genuine choice exists between local and overseas suppliers, the selection of a tender with a strong commitment to local content may result in significant benefits to the local economy that would not occur if the selected tender contained predominantly imported content. In such cases, these potential benefits should be given greater prominence in the overall assessment of value for money than in cases where all tenders are likely to have either high or low levels of local content;

• The level of participation by supply chains in the project. Projects that offer potential for extensive sub-contracting or use of supply chains can result in significant economic multiplier effects;

• Skills and training or technology requirements. The engagement of local suppliers in projects with high skill or technology requirements can have significant economic benefits in the form of building local industry capability and boosting the skills and knowledge of the workforce;

• Potential for regional industry participation. The involvement of regional suppliers in major procurement activity can have proportionately higher economic benefits to the region in the form of jobs growth/retention, population growth and additional economic activity. The extent to which the project will be delivered in a regional area is a good indicator of the potential for regional participation.

While it is the responsibility of the panel to come to their consensus on the method and level of importance to be applied to the VIPP criteria, Section 6 provides examples to assist agencies on how to consider VIPP within tender process and better understand the comparative analysis provided by the ICN in the evaluation of shortlisted tenderers.

VIPP as final assessment mechanism Following tender evaluation, including assessment of tenderers’ VIPP commitments, where there are still two or more tenderers remaining comparable, the VIPP will be used as a tiebreaker. The tenderer with the stronger VIPP commitments will be awarded the tender.

2.3. Detail of VIPP Plan

The VIPP Plan requires tenderers to estimate:

• the level of ANZ value added activities (level of local content) • the number of newly created and existing jobs retained (number of jobs) • training, skills development and technology transfer, and • identify the implementation process for achieving these commitments.



It is reasonable to assume that tenderers will be able to provide realistic estimates of what can be achieved and to detail their proposed steps to achieve it.

In some cases (for example, a large construction project) tenderers may not be able to provide definitive figures on the likely local content, particularly where materials and equipment will be supplied by sub-contractors who have not yet been contracted. In this scenario tenderers are asked to provide their best estimates on the three criteria plus a concise statement on the actions they intend to take to implement the VIPP.

The services of ICN are available to clarify issues relating to the VIPP, including how to identify and source local suppliers. Agencies should refer tenderers to ICN, which maintains a national database of local suppliers in Victoria and Australia.

2.4. Certification and Evaluation of VIPP Plan

All shortlisted tenderers will be required to have their VIPP Plans certified by the ICN. Agencies will reject tenderers whose VIPP Plans have not been certified by ICN.

Once tenderers have been shortlisted they will be instructed by the agency to develop their VIPP Plans and to submit them to the ICN for certification. ICN will review and certify the competing shortlisted tenderers’ VIPP Plans. Certification will be delivered to the tenderer who will then formally submit their VIPP Plan to the tender panel.

Registration and submission of VIPP Plans can be done online at www.icnvic.org.au/vipp

ICN will compare the VIPP Plans and prepare an assessment of their relative merits. This assessment is then provided to the tender panel for use in their final tender evaluation and selection of the successful tender.

2.5. Review of preferred tenderer’s VIPP Plan/contract negotiation

Once the preferred tenderer has been selected, their VIPP commitments will be negotiated as reportable conditions of the contract. This negotiation should seek to improve the tenderer’s VIPP commitments where appropriate. This is especially the case where the preferred tenderer’s VIPP Plan has been assessed by the ICN as having scope for improved local content commitments.

The negotiated contract will include:

• the agreed VIPP commitments; • how the commitments will be implemented; • a timetable for implementing them; and • an agreed monitoring, reporting and review process for VIPP commitments to occur on a

regular basis, for the life of the project.

Where negotiations result in the lowering of any VIPP commitments, below the level originally estimated by the tenderer, ICN re-certification and re-assessment will be required.

Note: With the exception of Strategic Projects (see 2.7), the VIPP does not require a prescribed level of local content. The key consideration for agency staff is that the tenderer has made a genuine attempt to identify and use local value added contents wherever it makes good commercial sense to do so.



2.6. Monitoring and Reporting

In reviewing and monitoring of the VIPP’s implementation during the course of the project, the agency should take into account factors – including those beyond the preferred tenderer or applicant’s control – that have the potential to cause the under-achievement of targets, and revise future targets accordingly. Where appropriate, advice from DBI or ICN can be sought.

The information contained in the VIPP Plan submitted by the preferred tenderer as part of the tender and the measures of the tenderer’s compliance with the Plan shall be provided to DBI for use in the annual reporting and monitoring of the Policy to Parliament, in accordance with the VIPP Act 2003. The contract must allow the disclosure and potential use of this information. A sample VIPP compliance clause for contracts is provided at Attachment 2.

As part of the compliance requirement with the Act, the tender winner must provide the agency with a final report on the VIPP outcomes achieved at the completion of the project. This report on VIPP outcomes must be certified by ICN.

The flowchart (Figure 1) below outlines the typical process to be followed by agencies in implementing the VIPP as part of a standard tender process.




Figure 1: Application of VIPP in standard procurement activities

Agency Advises ICN details of the shortlisted tenderers

ICN links shortlisted tenderers to procurement activity

Final contract with negotiated VIPP obligations incorporated as

reportable items

Agency awards contract

At contract completion, outcomes of VIPP Plan reported to DBI as

required by VIPP Act. ICN post contract certification of VIPP

outcomes reported

Evaluation sent to Agency ICN provides a statement on the merits of the tenderers’ local content commitments This determination will be based on the four key areas: • Local value-add • Employment created • Training, Skills development &

Technology transfer • Implementation Plan

Evaluates VIPP Plans

ICN Evaluator verifies that all tenderers have submitted VIPP

Plans

Government Procurement Inner & Outer Agencies

Where procurement is below VIPP threshold levels, agencies are

encouraged to apply VIPP principles through internal processes

Agency highlights VIPP requirements in their RFT

Agency applies VIPP Guidelines

Procurement >$3M (metro) and $1M

(regional)

Yes

No

Agency receives tenders

Agency shortlists tenderers

No

Tenderer Submits VIPP Plan via ICN VIPP Website for certification

Tenderer Receives ICN VIPP Certification Letter

Tenderer Submits VIPP Plan and ICN VIPP Certification Letter into

Agency

Agency tender evaluation to include consideration of VIPP Plan

and ICN Evaluation

Post-Tender changes impacting VIPP

Agency requests shortlisted tenderers to submit VIPP Plans

Tenderers develop VIPP Plans • Local Value Add % • Employment • Skills & Technology transfer • Implementation Plan • Monitoring/reporting

Yes

ICN

re-

cert

ifica

tion

and

re-

asse

ssm

ent r

equi

red

No

ICN receives email notification of VIPP Plan lodgement

VIPP Rep allocated to certify VIPP Plan

VIPP Rep undertakes certification

VIPP rep. sends Certification letter to tenderer

VIPP Plan complies with the Vic Govt VIPP requirements.

ICN sends non- compliant letter to agency

Agency may request tenderer to modify plan & resubmit to ICN for

certification

VIPP Plan Completeness

achieved? Yes

Tend

erer

res

ubm

its

VIP

P Pl

an


2.7. Strategic Projects

For the purposes of the VIPP, major procurement activities or projects with whole-of-life costs of $250 million or more or above $100 million capital cost may be declared of strategic significance to the Victorian economy where they fit one or more of the criteria below:

• Contribute over whole of life to the productive capability of Victoria and make a strategic contribution to the State’s ongoing economic wellbeing;

• Have potential to generate significant local industry participation, employment and skills and training/technology transfer during the project or procurement activity (design, construction etc);

• Have potential for building ongoing industry capability, skills and employment benefits resulting from the project;

• Present a clear choice between using local and overseas suppliers.

As not all projects above these values are necessarily Strategic in nature, the determination of strategic significance must be made prior to the commencement of any tendering processes associated with the project, including the design stage of such projects (see Section 3.1 for further details). Therefore, Departments and agencies must alert DBI to upcoming projects above the $250m threshold level or above $100 million capital cost that may meet the above criteria as soon as possible. DBI will conduct surveys biannually with Departments and agencies to capture this information; however, Departments and agencies are encouraged to inform DBI of these projects outside of these surveys, as soon as they are known.

Projects above the $250m whole of life or $100m capital threshold will initially be assessed by DBI and the ICN against these strategic significance criteria. Where DBI and ICN recommend a project should be declared of strategic significance, the final decision will be made by the appropriate Cabinet Committee.

Requirements for Strategic Projects

A declared Strategic Project will be subject to additional local content requirements to help drive additional economic activity and jobs. In particular, Strategic Projects will be subject to:

• A requirement that a minimum percentage of the procurement value (on a whole of life basis) is comprised of local content. The local content percentage is to be determined after consultation with ICN and DBI and approved by the appropriate Committee of Cabinet.

• Aside from the minimum local content target, projects of strategic significance will be subject to the normal provisions of the VIPP in tender evaluation and contract negotiation and reporting. However, having regard for the scale and complexity of such projects, it is expected that the VIPP Plans prepared by tenderers for Strategic Projects will take the form of detailed Local Industry Development Plans. These Plans will be prepared in consultation with ICN and will be used to assess competing tenders.

Figure 2 below shows the processes involved for Strategic Projects.




Figure 2: Application of VIPP in Strategic Project

Project goes to tender using normal VIPP

processes

DBI/ ICN set additional requirements • Target for minimum percentage of local

content • Tenderer to develop ‘Local Industry

Development Plan’ to be certified by ICN

Project declared of Strategic Significance

DBI/ICN submit recommendation of Strategic Projects to Minister for

consideration and endorsement by relevant Cabinet Committee

DBI/ICN conducts Strategic Project assessment on each project:

• Contribute to the productive capability of Victoria and make a strategic contribution to our ongoing economic wellbeing

• Potential to generate significant local industry participation, employment and skills/technology transfer during the project or procurement activity

• Potential for building ongoing industry capability, skills and employment benefits resulting from the project

• Present a clear choice between using local and overseas suppliers.

DBI identifies potential Strategic Projects which have estimated whole-of-life costs

exceeding $250M or above $100 million capital cost

(through ERC, SPP, SPC, and regular advice from agency)

Project is recommended

as Strategic

No

Yes

Project go to tender • Strategic Projects requirements

included in RFT

• Normal VIPP processes apply


3. ADDITIONAL ISSUES FOR AGENCIES TO CONSIDER

This section outlines a number of issues associated with procurement and tendering processes that agencies should consider as part of their implementation of the VIPP.

3.1. Project Design

For the VIPP to have maximum impact, project design specifications need to be performance oriented rather than design specific. Technical specifications should not be an obstacle to the local supply of required goods or services.

In order to specify one or more imported products, designers/contractors must clearly demonstrate that there are no known local alternatives which can deliver competitive performance. Only then may the product(s) be listed with specific design specifications or proprietary brand names. A Design Specification Committee (see below) shall be required to endorse the design specification.

In cases where the agency/contractor specifies one specific imported product as part of a design scheme, the designers/contractors may offer a local alternative product of similar characteristics or type, quality, appearance, finish, method of construction and performance, after the letter of acceptance of tender has been issued subject to a variation of the contract. The substitute of preferred products shall be undertaken within the provisions of VIPP.

Where design specifications lead to the exclusion of local products, the VIPP requires that the designer provide a justification to the agency responsible for the tender. Agencies shall consult with DBI or ICN prior to the approval of a design specification that excludes local suppliers from participation.

The product can be satisfactorily justified, if:

1. The product is required to satisfy critical aspects such as fire safety, security, rationalisation of long-term maintenance programs, and occupational health and safety standards.

2. Where the use of a performance-oriented specification alone is insufficient, product examples can be listed to guide the contractor, but not to designate as mandatory.

3. Only selected products will ensure satisfactory performance.

Tenderers are encouraged to consult the Government agency, as well as DBI or ICN on how best to incorporate achievable local supplier participation levels into the design.

Design Specification Committee

The contracting Department/Agency should establish a Design Specification Committee to approve instances where only one product is specified. The committee shall satisfy itself that the use of a single product is appropriate, ensure that the instances are minimised, and review the continuation of such practices at not more than two-year intervals.

3.2. Value for money

Value for money remains the primary criterion for evaluating tenders. However, “value for money” does not equate simply to “lowest price”. The GSG’s purchasing policies state that achieving user and system requirements, quality standards and service benchmarks are more important factors than the lowest purchase/tender price. When assessing tenders, agencies should take account of all such factors that constitute value, many of which are consistent with the principles of VIPP in that local content, local jobs and skills transfer can be relevant to the evaluation of the total value for money proposition on Government expenditure.



Decisions in government purchasing are based on assessments of value for money which requires a careful comparison of whole-of-life costs, benefits, ‘fitness for purpose’ and alternatives.

SMEs can offer equivalent, if not better, value for money in the following ways:

• Innovation – SMEs can be in a better position to offer alternative solutions which contribute to an organisation’s ability to carry out its business in a more cost-effective manner.

• Flexibility – due to size, location and often a multi skilled workforce, SMEs can be in a position to quickly adapt to your changing requirements.

• Customer service – to maintain viability, SMEs are often highly customer focussed, which can lead to better relationship management.

• Industry development – government business can make direct contributions to the social, economic, financial and cultural environment of a region.

• Increased local competition – encouraging SME participation in government purchasing helps maintain a viable network of suppliers leading to better value for money outcomes.

• Skills and training – SMEs can help build a steady supply of local skills.

3.3. Panel Contract Arrangements

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 recognition that the standard method of applying VIPP can lead to unreasonable compliance requirements for agencies and tenderers in certain kinds of panel contract arrangements, this section is intended to clarify how VIPP should be applied in different circumstances.

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 Plan.

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 Plan at the time of appointment to the supplier panel. However, they should be advised that, as a condition of appointment to the panel, they will be required to submit a statement of intent as to how they will apply the principles of VIPP in their role as a panel member. In addition, should the work they obtained through the panel accumulate in value over the threshold level, the suppliers will also be required to report on the VIPP outcomes of the contract (i.e. local content value add, new and retained local employments, and skills and technology transfer occurred.)

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.

As a general rule, Scenario 2 will only apply where the average amount of work per supplier is clearly valued below the relevant VIPP threshold level. For example, a $5m metropolitan contract split between 15 suppliers fits a Scenario 2 situation. By contrast, a project of this size split among 4



suppliers would have Scenario 1 applied even though the average amount per supplier is $1.25 million. The key consideration in this case is that the contracting agency concludes that one of the four suppliers could successfully obtain a major portion of the contract and exceed the VIPP threshold level.

Under Scenario 1, each supplier should attempt to complete an accurate VIPP Plan even where they may not know the amount and value of work they will be offered under the contract. In these circumstances, it is usually possible to make indicative VIPP commitments on the basis of:

• The supply of a single unit of production (e.g. VIPP local content and employment estimates for a vehicle supply contract could be made on the basis of the local content and employment inputs required to produce and supply a single vehicle of a particular model); and

• The supply of goods or services to a certain dollar value or length of time.

Agencies seeking further advice on the application of VIPP to panel contract arrangements should contact DBI.

3.4. Legislation, monitoring and reporting on VIPP outcomes

The Victorian Industry Participation Policy Act 2003 requires agencies to report on their VIPP implementation and outcomes to Parliament as part of normal Annual Reporting arrangements (Attachment 3 provides guidance on the format of this report).

The Act also requires agencies to report on the VIPP to DBI to enable the Minister responsible for the Policy (the Minister for Industry and Trade) to report annually to Parliament on consolidated VIPP outcomes.

These two reporting requirements can be met by the compilation of a single data set, which will be requested by DBI on an annual basis. Agencies will be required to provide details of projects commenced and projects completed during the previous financial year to which the VIPP has applied including the following:

• Contract code, name, value, and location (metropolitan or regional); • Confirmation that the VIPP was applied in the evaluation process and how this was done

(e.g. weighting given); • An indication if VIPP was the determining factor in the tender evaluation; • Date of project commencement and completion/expected completion; • Estimate of the number of full time equivalent jobs to be created and/or retained (for new

projects) and achieved (for completed projects); • Level of local content committed (for new projects) and achieved (for completed projects);

and • Skill and technology transfer committed (for new projects) and achieved (for completed

projects). • The type of industry/project.

The Department of Business and Innovation (DBI) circulates the template for reporting each financial year to each State Government agency.



4. THE ROLE OF DBI, ICN, AND OTHER GOVERNMENT AGENCIES

Information on the VIPP is available on DBI’s and the GSG’s website. Stakeholders and interested parties are encouraged to check this website regularly for updated VIPP information and templates.

4.1. Department of Business and Innovation (DBI)

If agencies wish to discuss the policy content of the VIPP, they should contact:

Department of Business and Innovation Level 35, 121 Exhibition Street Melbourne Tel: 13 22 15 Fax: (03) 9651 9505 Website: www.dbi.vic.gov.au/vipp

DBI is also able to provide the following services for agencies, tenderers and small businesses in relation to specific industry sectors, impacts on regional Victoria and/or small businesses:

• DBI web site (www.dbi.vic.gov.au); • The Victorian Business Line (13 22 15) is available to provide assistance to businesses and is

able to inform them of details regarding the VIPP; • Regional and Metropolitan Victorian Business Centres can also discuss the VIPP with

Victorian companies and the general community.

Metropolitan Offices Regional Offices Melbourne CBD Dandenong Bundoora Sunshine/ Tottenham

132 215 9938 0100 9935 0600 9334 1300

Ballarat Bendigo Geelong Mildura Shepparton Traralgon Wangaratta Wodonga

5320 5900 5442 4100 5223 2104 5051 2000 5821 1811 5174 9233 5721 6988

02 6056 2166

4.2. Government Services Group (GSG)

The GSG is responsible for issues relating to procurement and government contracting principles, guidelines and procedures. For further information on these issues, contact:

Government Services Group Department of Treasury and Finance Level 8/120 Collins Street Melbourne, VIC 3000 Telephone: (03) 8683 2944 (Victorian Government Purchasing Board advisory service) Fax: (03) 8683 2997

Details about the role and function of GSG can be found on http://www.vgpb.vic.gov.au

4.3. Housing and Building Policy

For public construction projects covered by the Project Development and Construction Management Act 1994, agencies should contact:


http://www.diird.vic.gov.au/vipp

http://www.diird.vic.gov.au/

http://www.vgpb.vic.gov.au/


Housing and Building Policy Department of Planning and Community Development 8 Nicholson Street Melbourne VIC 3000 Tel: (03) 9637 8453 Website: www.dpcd.vic.gov.au

Further information on Housing and Building Policy and related guides, Minister's Directions and products can be found on: http://www.buildingcommission.com.au/www/default.asp?casid=3632

4.4. Industry Capability Network - Victorian Branch (ICN)

The ICN can be contacted for advice on how the VIPP will apply and how companies can best access major projects. Businesses can also register their details on the ICN’s database and agencies should encourage their business contacts to register their details to market their services. Specifically, the ICN can also assist tenderers and agencies with the following:

• Identification and selection of products and services that meet the contract requirements on a best value basis; and

• Monitoring and reporting on the outcomes for Victorian industry involvement.

Free ICN services are available to support tenderers in identifying and developing the above information, including during the tender process. For projects valued over $3m in metropolitan areas (over $1m in regional areas), it is mandatory for short-listed tenderers to obtain certification of their VIPP Plans.

Contact details for the ICN are:

Head Office Level 11, 10 Queens Road Melbourne Vic 3004 Tel: (03) 8689 2500 Fax: (03) 9866 6304 www.icnvic.org.au

Ballarat Regional Office Victorian Business Centre 48 Sturt Street Ballarat, Vic 3350 Tel: (03) 5320 5962

Bendigo Regional Office 46 Edward Street Bendigo, Vic 3550 Tel: (03) 5441 8611 Fax: (03) 5442 5452

Geelong Regional Office Suite 8, Level 1 69-71 Moorabool Street Geelong Vic 3220 Tel: (03) 5222 6137 Fax: (03) 5222 6792

Gippsland Regional Office 33 Breed Street Traralgon Vic 3844 Tel: (03) 5176 1901 Fax: (03) 5174 7845

Hume Regional Office Based in the Victorian Business Centres in Wodonga, Wangaratta and Shepparton PO Box 588, Wangaratta VIC 3678 Tel: (03) 5722 4620 Fax: (03) 5722 2265

Great South Coast Regional Office Building G (Customs House) Giles Street Warrnambool Vic 3280 Tel: 0407 505 477


http://www.buildingcommission.com.au/www/default.asp?casid=3632

http://www.icnvic.org.au/


5. DEFINITIONS

Definitions of terms used in the document are given below.

Value for money – refers to the acquisition of the goods or services at optimum combination of quality, quantity, risk, timeliness and cost for government on a whole-of-life basis.

Local – covers Victoria, Australia or New Zealand, so as to be in accord with the Australia New Zealand Government Procurement Agreement entered into by Australian State and Federal Governments and New Zealand.

Local content – refers to value added activities from Victorian, Australian and New Zealand industry.

% of Local Content – refers to the level of local content that a contract or project contains.

Value added – refers to the supply price of those products or services less the amount spent on imported products and services. The latter includes all components, embedded software and design, manufacturing, assembly and supply services used for or in the supply of those products or services. Agencies should satisfy themselves that the supply prices are not inflated to achieve the desired levels of Australian value add, by comparing them with those of similar past contracts, and where appropriate, by seeking the advice of ICN.

Regional Victoria – the area within the municipal districts of the councils – excluding Metropolitan Melbourne councils – established under the Local Government Act 1989. See Attachment 5 for details.

Inner Budget – the ten Government Departments, the Victoria Police, and the administrative offices as defined in the Public Administration Act 2004.

Outer Budget – agencies that are only partly funded by Government such as statutory authorities and Government Business Enterprises.

Employment - refers to the number of full-time equivalent jobs to be created or retained in Australia and New Zealand as a result of the contract.



6. EXAMPLES OF APPLYING THE VIPP IN TENDER EVALUATION

The following examples are provided to give guidance to agencies about how to assess an appropriate consideration of VIPP within overall tender evaluation. (Note: This guidance is distinct from the ICN assessment provided to agencies which relates specifically to the relative merits of individual tenderers’ VIPP Plans.) The criteria and ratings used below should be regarded as guides only. Agencies may develop their own criteria and scoring methods for assessing the significance of VIPP, provided they are consistent with the policy principle that VIPP should play an influential role in tender evaluation but should not distort tender outcomes based on value for money principles. Further advice on the role of VIPP in tender evaluation can be sought from DBI.

Example 1

A new transport management system for Box Hill comprising a distributed network of sensors and cameras with a central software management package. The project spec summary is:

Budget: Initial hardware $10m, software $5m, ongoing service component $1m per year, expected whole of life of project 10 years.

The evaluation panel meets to consider the way in which VIPP will be considered for this project and concludes that the following factors are of significance:

The skills related to the project tend to be high level although much might be off the shelf solutions including electronics, sensor design/supply, software design/supply, community liaison

LOW MEDIUM HIGH

Skills and training or technology requirements #

Supply chain involvement is potentially extensive including equipment manufacturers, software developers, equipment service, and civil engineering

LOW MEDIUM HIGH Level of participation by supply chains in the project #

There is a strong likelihood of local and international interest in the project

LOW MEDIUM HIGH Level of contestability between local and overseas suppliers #

The project is Box Hill and thus not regional.

LOW MEDIUM HIGH Potential for regional industry participation #

The tender panel surveys the overall dimensions of the project and after a short discussion concludes that the rating for the VIPP criteria in short-listed tender evaluation will be Medium.

LOW MEDIUM HIGH Skills and training or technology requirements # Level of participation by supply chains in the project # Level of contestability between local and overseas suppliers # Potential for regional industry participation # OVERALL RATING #



Example 2

An overhaul of the water reticulation system in Bendigo comprising mainly civil works and replacement piping. The project spec summary is:

Budget: Initial hardware $10m, software $200k, civil engineering work, $0.5m ongoing maintenance contract, expected whole of life of project 20 years. Mainly local suppliers are expected to show interest in the project

The skills related to the project tend to be low level with much being related to traditional trades.

LOW MEDIUM HIGH

Skills and training or technology requirements #

Supply chain involvement is only moderate with some manufacturers, civil engineering services involved.

LOW MEDIUM HIGH Level of participation by supply chains in the project #

There is little likelihood of international interest in the project

LOW MEDIUM HIGH Level of contestability between local and overseas suppliers #

The project is Bendigo and thus regional.

LOW MEDIUM HIGH Potential for regional industry participation #

The tender panel surveys the dimension of the project and after a short discussion concludes: that the rating for the VIPP criteria in short-listed tender evaluation will be MEDIUM.

LOW MEDIUM HIGH Skills and training or technology requirements # Level of participation by supply chains in the project # Level of contestability between local and overseas suppliers # Potential for regional industry participation # OVERALL RATING #

Note: Consideration should be given to contacting the ICN for advice early in the tender process if the initial VIPP assessment indicates a potential HIGH rating.

This initial assessment of VIPP in the overall tender process should be reviewed in relation to the advice provided by the ICN in their comparative evaluation of the VIPP commitments by shortlisted tenderers.



Victorian Industry Participation Policy (VIPP) Plan Guide

Please note: This document is a guide on how a VIPP Plan may be completed. Further information on the Victorian Industry Participation Policy can be found on the Department of Business and Innovation’s (DBI) website. Tenderers are also encouraged to consult with the ICN Victoria- (03) 8689 2500 for assistance with their VIPP Plan. Tenderers must ensure that all fields and questions are fully completed if using this VIPP Plan Guide or any other VIPP Plan format.

Reference material Please refer to the Victorian Industry Participation Policy (VIPP) Guidelines document for more details. Acronyms ICN Industry Capability Network Victoria DBI Department of Business and Innovation VIPP Victorian Industry Participation Policy VMC VIPP Management Centre (https://www.icnvic.org.au/vipp) Definitions Definitions of terms used in the document are given below. Value for money – refers to the acquisition of the appropriate quantity and quality of goods or services at the optimum combination of quality, quantity, risk, timeliness and cost for government on a whole-of-life basis. ANZ Value-added – refers to cost of Victorian/Australian/New Zealand goods or service less the cost of the imported components.

Note: ANZ refers to manufacturing or provision of services in Victorian/Australian/New Zealand. Items imported into New Zealand as part of New Zealand sourced goods and services are considered as imported components.

Local – covers Victoria, Australia or New Zealand, so as to be in accord with the Australia New Zealand Government Procurement Agreement entered into by Australian State and Federal Governments and New Zealand. Regional Victoria – the area within the municipal districts of the councils – excluding Metropolitan Melbourne councils – established under the Local Government Act 1989. Employment - refers to the number of actual new or retained full-time equivalent employment opportunities (jobs) to be created in Australia and New Zealand as a result of the contract. Lead Agency - refers to inner and outer government agencies or contracting principal

Legend [Square-bracketed greyed text] — Insert required information in this area


https://www.icnvic.org.au/vipp


1. Company details

Company name: [ Your company name here ]

2. Tender details

Date: [ Insert date here ] VIPP Plan Version No. [ VIPP Plan Version Number ]

Tender Name: [ Insert tender name here ]

Tender Reference Number: [ Insert reference number here ]

Tender Due Date: [ Insert tender due date here] Lead Agency Name: [ Insert name of lead Agency here ]

Lead Agency Contact: [ Insert name of contact at lead Agency ]

2.1. Industry categories:

Identify and select from the following list of industry sectors, the one most relevant to the contract.

Agriculture, forestry Environment Mining Manufacturing Utilities Construction/Infrastructure Wholesale Trade Retail Trade Research/Innovation/Design

Transport Communications Finance Property Education Health Events and Tourism Other [Please specify (if selected)]

2.2. Contract description

[ Provide a short description of the scope of contract here ]



3. VIPP Commitments

Requested information in the [Square-bracketed greyed text] contained in the table below should be completed

Key VIPP Criteria Description Commitment

ANZ Value-added Activity

Specify the level of ANZ (Victorian/ Australian / New Zealand) value-added activity, expressed as a percentage of the overall bid price.

[Insert local content %]

Number of new jobs created (FTE) [Insert number here] Employment created

and/or retained

Provide details of number of jobs (Full Time Equivalent - FTE) that will be created or retained in Australia and New Zealand as a result of the contract Number of existing jobs retained (FTE)

[Insert number here]

Number of new apprentices/trainees created (FTE)


Apprentice/trainee position(s) created and existing position(s) to be utilised on the contract

Provide details of number of apprentice/ trainee positions that will be created in Australia and New Zealand and existing apprentices/trainees utilised as a result of the contract

Number of existing apprentices/trainees utilised on the contract(FTE)


Training, Skills Development and Technology Transfer Outcomes increased or secured

Identify opportunities for increasing the training and skills development of Victorians, Australians and New Zealanders and any technology transfer that will result from:

• innovation • research and development • transfer of IP • transfer of know-how • apprenticeship training

[ Insert brief summary of training, skills development and technology transfer

commitments ]

3.1. Value-added activity

The table below should be completed to enable ICN to provide assessment on the VIPP Plan local content commitments. Insert or delete extra items and include further descriptions if/ where required.

Items Supplier Local value-added

activity (% per item)

Description

Local items

[Local item 1] [Intended supplier]

[insert number]%

[Local item 2] [Intended supplier]

[insert number]%

[eg, Insert extra item/s if required]

[Intended supplier]

[insert number]%

Locally made and installed; commissioned on site by local labour

Local with imported content items

[Local with imported content item 1]

[Intended supplier]

[insert number]%

[Local with imported content item 2]

[Intended supplier]

[insert number]%

[eg, insert extra item/s if required]

[Intended supplier]

[insert number]%

Some components sourced non-locally (no local manufacture); installed and commissioned on site by local labour

Imported items

[Imported item 1] [Intended supplier]

[insert number]%

[Imported item 2] [Intended supplier]

[insert number]%

[eg, insert extra item/s if required]

[Intended supplier]

[insert number]%

Manufactured overseas; assembled and tested locally; installed and commissioned on site by local labour



3.2. Provide further details of Employment Created and Retained.

Based on the current program it is envisaged that this contract would create approximately [insert number of jobs] new full-time equivalent (FTE) local jobs, and additionally, retain approximately [insert number of jobs] existing FTE jobs over the life of the contract.

[ Your response could also include details on the type of positions that may be created or retained as a result of this contract. ]

3.3. Provide details of any training and skills development of Victorians, Australians and New Zealanders as well as any potential to undertake innovation, research and development of technology transfer specific to the contract.

Your response could include (but are not limited to):

• List/s of training programs designed specifically for the tender contract • Any opportunities for the engagement and training of apprentices • Indicate opportunities for the engagement and training of apprentices/trainees, and the number

of apprenticeships and traineeships created and the existing positions to be utilised on the contract

• Identifying and describing opportunities for increasing the skills of the employees • Identifying the potential to undertake further innovation and / or research and development of

contract related technology • Any technology transfer that occurs as a result of imported technology • Achievement awards

[ Insert your response here ]

4. How will you identify local products and capabilities that meet contract requirements?


• A proposal for consulting with the ICN, Government organisations, local industry and other groups to identify the availability of local goods and services to meet the requirements of the contract;

• Detailing the means by which local industry is alerted to upcoming tenders and contract requirements;

• Methods for promoting the concept of local industry participation with consultants, subcontractors and others involved with the contract;

• A commitment to liaising with international suppliers to increase opportunities for local industry including manufacturing under overseas licensing arrangements and technology transfer;

• Establishing procedures and policies that encourage local industry participation; • Identification of work packages and items with the potential for import replacement.


5. How do you assess and compare local products and capabilities with overseas equivalent/s?


• Procedures to be based on ”whole-of-life” cost parameters and appropriate quality and performance indicators;

• Benchmarks for the evaluation of proposals and alternatives; • Procedures for assessing the local content in a product or service; • Procedures for ensuring that local products and services are evaluated against imported goods and

services.




Commercial in Confidence of 33 Updated: 27/09/2011 Version 4.0

8. Statement of Compliance

7. How will you monitor and report on outcomes for local industry involvement?


6. What is your policy/ procedure for product/ service selection?

Please describe the procedures or policies for the selection of products and services that provide the best value for money over the life of the contract.

Signed on behalf of: [ Insert FULL company name here ]:

Signature:

[ Insert Company Representative’s signature here ]

(Note# If submitting VIPP Plan online, a signature is not required here) Name: [ Insert Company Representative's name here ]

Position: [ Insert Company Representative's Position here ] Date [ Insert date here ]

Should [ Insert full name of company ] be the successful tenderer for this project, we shall:

(Note: If submitting a VIPP Plan online via the VIPP Management Centre (VMC), acceptance of the Terms and Conditions must be acknowledged and agreed to prior to submission, therefore no signature is required within the VIPP Plan). VMC can be found at https://www.icnvic.org.au/VIPP

To confirm that you agree to the Statement of Compliance as listed above, please sign below.

The ICN can assist in the monitoring of compliance with VIPP commitments as part of overall performance management

• VIPP commitments secured against contract levels; • Frequency of monitoring and reporting and associated mechanisms; • Procedures for corrective action should inappropriate or ineffective action be determined • Frequency and level of internal assessment of the effectiveness of the implementation of the Plan; • Frequency of external assessment of sub-contractor and supplier commitment to local industry

participation; • Level of use of ICN and other organisations to assist in the identification of competitive local

sources of supply. • Using Annex A: VIPP Monitoring Table to monitor VIPP outcomes.

This table represents a method for monitoring VIPP outcomes for the duration of a project. However, this is merely a guide and tenderers are welcome to come up with a feasible method in consultation with ICN to monitor the VIPP outcomes.



• Take all reasonable steps to comply with VIPP principles; • Agree to be monitored by the Department or Agency for compliance with VIPP commitments as

part of overall performance management; • Agree to allow ICN to certify the VIPP outcomes at the completion of the contract; • Acknowledge that the VIPP Plan shall be centrally recorded by the Victorian Government. • Agree to the Terms and Conditions as set out in Annex B of this document.

https://www.icnvic.org.au/VIPP































Commercial in Confidence of 33 Updated: 27/09/2011 Version 4.0

Annex A: VIPP Monitoring Table

Local Content

Item Description Company Location VIPP Local

Activity Commitments %

Local Activity in Progress %

Secured Local Activity %

Comments

Employment

Existing Jobs New Jobs Contracted Actual Contracted Actual

Total Contracted Jobs

Total Actual Jobs Difference

Skills and Technology Transfer Committed Achieved Contracted Description Status Completion %

Apprentices/ trainees Existing Apprentices/ trainees New Apprentices/ trainees

Contracted Actual Contracted Actual Total Contracted

Apprentices/ trainees

Total Actual Apprentices/

trainees Difference


Annex B: Terms and Conditions In submitting to ICN information relating to your Victorian Industry Participation Policy (VIPP) plan you agree to the following: Purpose for which information submitted

Before submitting information to ICN relating to your VIPP plan you have familiarised yourself with the terms and conditions on which you have submitted your tender to the relevant Government agency including the provisions that relate to the VIPP and ICN’s role under the VIPP. Accordingly, you are fully aware of the role performed by ICN for the relevant Government agency under the VIPP in relation to both your tender and in relation to other tenderers. You understand and agree that the purpose for which you have submitted the information about your VIPP plan to ICN is to enable ICN to deal with the information in accordance with ICN’s role under the VIPP. Authority to perform role

You expressly consent, authorise and permit ICN to do everything reasonably required of ICN by the relevant Government agency to perform ICN’s role under the VIPP throughout all stages of the tender process. You also expressly consent, authorise and permit ICN to do everything reasonably required of ICN by the relevant Government agency to perform ICN’s role under the VIPP to report on VIPP outcomes whenever required during the performance of any tender contract or upon completion. Amongst other things, you understand and agree that in the course of dealing with the information you provide in relation to your VIPP plan ICN will compare information provided by all short listed tender respondents in relation to their VIPP plans, assess their relevant merits and report to the relevant Government agency. You undertake and agree to co-operate with ICN in the performance of its role under the VIPP. Accuracy of information submitted

You acknowledge and agree that regardless of any assistance you may be given by ICN in relation to the preparation of your VIPP plan, the VIPP plan you submit for consideration is your document and you are responsible for its content. You agree and represent that the information submitted by you to ICN in relation to your VIPP plan has been carefully prepared by you or on your behalf and is complete, current and accurate and is not misleading or deceptive. You undertake and agree on a continuing basis to make ICN aware of any errors or misrepresentations of fact and of any other matters that it would be important for ICN to know in consequence of relying upon that information for the purposes of performing ICN’s role under the VIPP. You also agree to inform ICN of any changes in matters of fact that may have occurred since any information or material was first provided by you. You agree that upon request from the relevant Government agency you will provide the relevant Government agency with your written confirmation of the truth, accuracy and completeness of all information provided and representations made by you in your VIPP plan particularly (but without limitation) information which is not capable of independent confirmation and verification from independent sources. Reliance on accuracy of information

You understand and acknowledge that the relevant Government agency and ICN will be relying upon your representations as to the completeness, currency and accuracy of all information that you submit in relation to your VIPP plan and that ICN can not be responsible for or liable in any way for the consequences of you submitting incomplete or inaccurate information or information that is not current.



Confidentiality of information

In so far as information that you provide in your VIPP plan is confidential information, ICN undertakes and agrees to keep that information and the VIPP plan confidential as between ICN and the Government agency issuing the tender request. Submission of information electronically

You are aware there are inherent risks with the transmission of information via the internet. ICN will endeavour to keep secure information that it receives from you that is submitted by you via the Internet, however, you will be assuming all risks associated with the use of ICN's website and any associated databases including the risks of your computer, software or data being damaged by any virus which might be transmitted, downloaded or activated by ICN website and/or the relevant database its contents and your access to it. Submission of information physically

If you have any concerns regarding the transmission of information via the internet, ICN can receive information via mail, facsimile or telephone or by physical delivery. Please refer to the ICN web site for details. Indemnities

You agree to indemnify the relevant Government agency and ICN on a continuing basis and so as to survive the consideration and acceptance of any tender and the term of any agreement including any contract arising from the acceptance of a tender by any Government agency against any action, claim, demand, liability, loss or expense, costs or damage, including legal costs on a solicitor client basis, arising out of the reliance by ICN upon any information, material or documentation provided by you in relation to your VIPP plan which is incomplete, inaccurate, false or misleading or omits any material particulars or arising from a failure to supply relevant information, documentation or material. Release

You acknowledge and agree that the relevant Government agency and ICN will not be liable to you in any way or for any reason whatever by reason of a Government agency to whom you submit a tender incorporating your VIPP plan not awarding you a contract in response to your tender submission and you release the relevant Government agency and ICN from any action, claim, demand, liability, loss or expense, costs or damage, including legal costs on a solicitor client basis, arising out of a Government agency not awarding you a contract in response to your tender submission. You further acknowledge and agree that this release may be pleaded as an absolute bar to any proceedings you seek to commence against the relevant Government agency and ICN in any capacity whatever.



ATTACHMENT 2 – Clauses for Tender Documentation & Contracts

Request for Tender Clause:

Victorian Industry Participation Policy (VIPP) The Victorian Industry Participation Policy (VIPP) seeks to maximise opportunities for Australian, New Zealand and Victorian suppliers to compete for government business on the basis of best value for money over the life of the goods or services. The Policy applies to Government procurement activities, construction activities, Major Projects, Major Events, Public Private Partnerships and investment support, business development and community infrastructure grants above the threshold values of $3 million or more in Metropolitan Melbourne and $1 million or more in Regional Victoria.

The VIPP Plan will be assessed as part of the evaluation of the tender. VIPP Plans (see below) prepared by shortlisted respondents must be certified by the Industry Capability Network Victoria (ICN) and when submitted become part of the tender submission. The agency will reject tenderers whose VIPP Plan has not been certified by ICN.

All shortlisted respondents shall prepare a VIPP Plan that will include the following information:

Key VIPP Criteria Description ANZ Value-added Activity

Specify the level of ANZ (Victorian/ Australian / New Zealand) value-added activity, expressed as a percentage of the overall bid price.

Employment created or retained

Provide details of number of jobs that will be created or retained in Australia and New Zealand as a result of the contract.

Apprentice/ Trainee positions created or retained

Provide details of number of apprentice/ trainee positions that will be created in Australia and New Zealand and existing apprentices/ trainees utilised as a result of the contract.

Training, Skills Development and Technology Transfer Outcomes increased or secured.

Identify opportunities for increasing the training and skills development of Victorians, Australians and New Zealanders and any technology transfer that will result from:

• innovation • research and development • transfer of IP • transfer of know-how • apprenticeship training

Implementation process

Provide details of the methods and processes to be adopted to: • Provide opportunities for local companies to tender; • Assess and compare local products and capabilities against overseas

equivalents; • The selection of products and services that provide best value for

money; and • The monitoring and reporting of VIPP commitments.

Note that this information is submitted within a VIPP Plan. Refer to [Attachment xx of this document] for an outline of the full VIPP Plan.

Further Information: Tenderers are advised that the services of the Industry Capability Network Victoria (ICN) will be available to assist them in implementing the Victorian Industry Participation Policy (VIPP).

ICN provide free services to assist bidders in identifying and developing the above information, including during the tendering process. It is mandatory for shortlisted bidders to obtain certification



from the ICN for their VIPP Plan, to demonstrate that a genuine attempt to consider local suppliers has been made.

ICN adheres to strict probity and confidentiality procedures.

Bidders/tenderers can contact the Industry Capability Network (ICN) - (03) 8689 2500; or Department of Business and Innovation (DBI) – 13 22 15.

Definitions: Value for money – refers to the acquisition of the appropriate quantity and quality of goods or services at the optimum combination of quality, quantity, risk, timeliness and cost for government on a whole-of-life basis. ANZ Value added – refers to cost of ANZ goods or services less the cost of the imported components. Local – covers Victoria, Australia or New Zealand, so as to be in accord with the Australia New Zealand Government Procurement Agreement entered into by Australian State and Federal Governments and New Zealand. Regional Victoria – the area within the municipal districts of the councils – excluding Metropolitan Melbourne councils – established under the Local Government Act 1989. Employment - refers to the number of actual new or retained full-time equivalent employment opportunities to be created in Australia and New Zealand as a result of the contract. Apprentice/ Trainee Position – refers to a position which combines work for the employer with structured, off-the-job training or workplace based training organised through a Registered Training Organisation (RTO) to receive a nationally recognised qualification. Apprentices/ trainees have a contract of training with the employer that sets out the responsibilities of the employer and the apprentice or trainee.



Compliance clause for contracts

Provided below are standard VIPP compliance clauses to be inserted into negotiated contracts (with any necessary changes to fit with the language used in the contract).

Sample clause:

“VIPP Compliance

The information contained in the VIPP Plan submitted by the Contractor as part of the Tender and the measures of the Contractor’s compliance with the Plan shall be provided to the central agency in the Department of Business and Innovation (DBI) to be included in a register of VIPP performance.

The lead agency will monitor the Contractor’s performance measured against the VIPP outcomes set out in VIPP Plan and the monitoring provisions in Clause [Insert Number] shall apply to allow an auditor or other nominated representative of the lead agency to have access to and to obtain information from the Contractor’s records and staff. The Contractor must provide authorisation for the lead agency to obtain information from the persons, firms or corporations nominated in Schedule [Insert Number] as to compliance with the VIPP Plan. The lead agency’s representative will exercise his or her reasonable discretion in assessing the Contractor’s performance under this clause and shall take into account any issue raised by the Contractor which fairly represents a cause of failure to comply beyond the Contractor’s reasonable control.”

Support services available

Tenderers are advised that the services of the Industry Capability Network Victoria (ICN) will be available to assist them in implementing the Victorian Industry Participation Policy (VIPP).

ICN provide free services to assist bidders in identifying and developing the above information, including during the tendering process. It is mandatory for shortlisted bidders to obtain certification from the ICN for their VIPP Plan, to demonstrate that a genuine attempt to consider local suppliers has been made.

ICN adheres to strict probity and confidentiality procedures.

Bidders/tenderers can contact the Industry Capability Network (ICN) - (03) 8689 2500; or Department of Business and Innovation (DBI) – 13 22 15.



ATTACHMENT 3 – Financial Reporting Direction 25A

FRD 25A

Victorian Industry Participation Policy Disclosures in the Report of Operations

Purpose To prescribe the disclosure requirements for the implementation of the

Victorian Industry Participation Policy (VIPP) in the report of operations in accordance with section 9 of the Victorian Industry Participation Policy Act 2003.

Application Applies to all entities defined as either a public body or a department

under section 3 of the Financial Management Act 1994. Requirement • The accountable officer must disclose the details of the

implementation of the VIPP in the entity’s report of operations. • The accountable officer of each entity is responsible for ensuring all

contracts to which the VIPP applies are reported on in summary form. • The report of operations should contain the following information for

contracts commenced and/or completed in the financial year:

(a) the number and total value of contracts commenced and/or completed in the financial year to which the VIPP applied;

(b) the regional and metropolitan split by number and value of commenced and/or completed contracts; and

(c) for contracts commenced, a statement of total VIPP commitments (local content, employment, engagement of apprentices/trainees and skills/technology transfer outcomes) achieved as a result of these contracts.

for contracts completed, a statement of total VIPP outcomes (local content, employment, engagement of apprentices/trainees and skills/technology transfer outcomes) achieved as a result of these contracts.

Operative Date Reporting periods commencing 1 July 2010. FRD 25A Victorian Industry Participation Policy Disclosures in the Report of Operations is effective from 1 July 2010 and supercedes FRD 25 of the same name which has now been withdrawn.

Definitions FTE jobs - Full Time Equivalent jobs; Local content - goods and services sourced from or industry based in

Victoria, Australia and New Zealand; Regional - the area within the municipal districts of the Councils, excluding

metropolitan Melbourne Councils, established under the Local Government Act 1989;

Skills/technology transfer - increases in the skills of Victorians and Australians and the undertaking of innovation, research and development of technology; and

VIPP - the Victorian Industry Participation Policy as defined under section 4 of the Victorian Industry Participation Policy Act 2003.

Guidance The objectives of VIPP are to:

– Promote employment and business growth by expanding market



opportunities for local small to medium enterprises;

– Provide contractors with increased access to a wider range of companies able to deliver the best value for money;

– Raise awareness of local industry capabilities amongst Victorian companies;

– Expose local industry to world’s best practice in workplace innovation, e-commerce and use of new technologies and materials;

– Develop local industry’s international competitiveness and flexibility in responding to changing global markets by giving local industry a fair opportunity to compete against foreign suppliers; and

– Maximise skills and training outcomes.

• The desired outcome of VIPP is to foster industry development by encouraging bidders to genuinely and systematically consider Victorian, Australian and New Zealand supply.

• Departments and public bodies are required to apply VIPP in all tenders over $3 million in metropolitan Melbourne and $1 million in regional Victoria. VIPP also applies to other Victorian Government procurement and project activities; such as:

– public-private partnership or alliance projects;

– investment attraction grants;

– grants to the private sector and local government for infrastructure and community facilities;

– Major Events funding; and

– Major Projects.

Appendix 1 contains a sample report for further guidance.

Relevant Pronouncements

• The Victorian Industry Participation Policy Act 2003; and

• Victorian Industry Participation Policy Guidelines for entities, as amended from time to time, located at www.dbi.vic.gov.au/tenders/victorian-industry-participation-policy

Background In October 2003, the Victorian Parliament passed the Victorian Industry

Participation Policy Act 2003. This Act requires public bodies and departments to report on the implementation of the Victorian Industry Participation Policy.

The Victorian Industry and manufacturing Statement, Building Our Industries for the Future, announced a number of actions to strengthen the VIPP outcomes, including the VIPP reporting guidelines. These actions were the basis for FRD 25A, which in particular clarifies reporting on training outcomes for which the VIPP applies.

Detailed information about VIPP implementation and reporting is available on the Department of Business and Innovation website for VIPP (see above).

Further inquiries can be directed to the VIPP Team by email, [email protected] or by telephone on (03) 9651 9819.


http://www.dbi.vic.gov.au/tenders/victorian-industry-participation-policy

mailto:[email protected]


ATTACHMENT 4 – Definition of Regional Victoria

Regional Victoria is defined as the area within the municipal districts of the following councils established under the Government Act 1989.

Alpine Shire Council Macedon Ranges Shire Council Ararat Rural City Council Mansfield Shire Council Ballarat City Council Mildura Rural City Council Bass Coast Shire Council Mitchell Shire Council Baw Baw Shire Council Moira Shire Council Benalla Rural City Council Moorabool Shire Council Buloke Shire Council Mount Alexander Shire Council Campaspe Shire Council Moyne Shire Council Central Goldfields Shire Council Murrindindi Shire Council Colac- Otway Shire Council Northern Grampians Shire Council Corangamite Shire Council Pyrenees Shire Council East Gippsland Shire Council Borough of Queenscliffe Gannawarra Shire Council South Gippsland Shire Council Glenelg Shire Council Southern Grampians Shire Council Golden Plains Shire Council Strathbogie Shire Council Greater Bendigo City Council Surf Coast Shire Council Greater Geelong City Council Swan Hill Rural City Council Greater Shepparton City Council Towong Shire Council Hepburn Shire Council Wangaratta Rural City Council Hindmarsh Shire Council Warrnambool City Council Horsham Rural City Council Wellington Shire Council Indigo Shire Council West Wimmera Shire Council La Trobe Shire Council Wodonga Rural City Council Loddon Shire Council Yarriambiack Shire Council

‘Regional Victoria’ also includes the Alpine Resorts areas, which are not included in any municipal district.


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