Procurement complexity means the level of difficulty involved in buying goods or services.
An assessment of complexity considers a broad range of factors, including:
- total cost of ownership
- what’s happening in the market
Capability is the ability to perform the tasks needed for the procurement. In a capability assessment you make sure there is enough expertise to carry out the project.
This assessment matches things like people, resources and systems to the needs of a project.
These two assessments are usually carried out together. This means you can find out whether a project can be successful with existing resources, or if you need to invest in more.
Policy 2 outlines the VGPB’s complexity and capability assessment.
When to assess complexity and capability
The government buys from categories and at an individual level.
Procurement categories are groups of goods or services that are similar in what they are and how they’re used. For example, stationery could be the category for pens.
Categories are assessed on their complexity annually. For some categories where goods and services don’t often change, complexity is assessed less frequently.
For example, the complexity level of office furniture is unlikely to change. On the other hand, technology evolves frequently and needs to be assessed each time.
There are 32 government organisations that must do complexity and capability assessments. Each of the 32 organisations has their own complexity method.
All other organisations are encouraged to do a complexity assessment. Ask your procurement governance unit about your organisation's process.
If you’re buying from a pre-existing arrangement, you may not need to do a complexity assessment. Check the rules if you’re buying from:
- a whole-of-Victorian-Government contract (also known as a state purchase contract or “SPC”)
- a sole entity purchase contract
Complexity is assessed in four categories known as the complexity quadrant:
These are generally of small value and low risks when there isn’t a government contract available.
These are frequently used goods or services with many potential suppliers. Organisations or whole of Victorian Government can buy these. The organisation can drive value.
This is when there are a limited number of suppliers to provide a particular good or service. They may include whole-of-government contracts.
This is when you’re buying high value and critical goods or services and the market is competitive. What you buy may have State significance. They may include of whole-of-government contracts.
Mandatory requirements for complexity assessments
An assessment of complexity must:
- identify and measure factors that affect what you’re buying
- outline characteristics of the good or service you’re buying
- assess whether the market can and is able to supply
- define the value the good or service gives your organisation
- look for opportunities to improve value for money
- analyse the potential to buy in bigger quantities or across organisations
- look for opportunities for small-medium businesses to supply
- investigate the most cost effective way to approach suppliers
Your assessment will determine which of the four quadrants of complexity your purchase suits.
Tools and templates to assess complexity
Your procurement governance unit can provide you tools and templates to help you assess complexity.
You can also find tools for goods and services under the complexity and capability assessment policy.