Note: all contracts reflect the Supplier Code of Conduct and recent legislative change.
A suite of baseline contracts has been developed for procurement of goods and services by the Victorian Government. These documents have been designed to govern different types of procurement arrangements from low to medium complexity, and both one-off purchases and sole entity purchases arrangements.
The contracts provide a base and can be tailored to the requirements of the procurement. For more complex and/or more high risk procurement buyers should engage with their internal procurement unit and seek legal advice.
Choosing the right contract
The contract you use will depend on the complexity of the procurement and what is being procured. It will also depend of whether you are procuring goods or services as different contract clauses will apply. Contracts for goods impose conditions for delivery and testing of the goods whereas service contracts impose conditions relating to staff and service levels.
It is recognised that procurement arrangements can have elements of both goods and services and in the case legal advice or procurement expert advice may be required to determine the most appropriate contract to use.
Below is a general overview of each contract and its purpose.
For low complexity, low value procurement of goods. This is also the default terms and conditions when a purchase order is issued for goods and there is no existing executed contract in place
For low complexity, low value procurement of services. This is also the default terms and conditions when a purchase order is issued for services and there is no existing executed contract in place.
For more complex procurement of goods where there is a defined output or number of goods required with a definite end date.
For more complex procurement of service where there is a defined scope of works with a clear start and end date.
Used for more complex procurement of goods where a price is established for a period of time. This contract can also be used where there is more than one supplier under a procurement arrangement. Purchasing under this contract requires the issuing of a purchase order
Used for more complex procurement of services where a price is established for a period of time. This contract can also be used where there is more than one supplier under a procurement arrangement. Purchasing under this contract requires the issuing of a purchase order.
NB: A standing offer (sole entity purchase) contract is an aggregated arrangement established for a single department or a business unit or group of business units within an organisation.
On 12 September 2017 all of the VGPB standard form contracts (above) were refreshed to reflect legislative change. Download the corresponding contract refresh matrix below for specific detail on the changes made:
Using the contract templates
Difference between a one-off contract and a sole entity purchasing contract:
A one off contract sets provisions where there is a defined output within a specified time.
A sole entity purchase contract (SEPC) sets out provisions for goods and/or services over a period of time and a purchase order is required to order from the SEPC.
Difference between a goods contract and a service contract:
A goods contract includes conditions for testing and accepting goods, delivery of the goods and establishes a position on when title in and risk in the goods are transferred from the supplier to the organisation.
A service contract includes conditions relating to the Suppliers staff, service levels, performance management, intellectual property and the management of data.
When buying both goods and services, seek advice from your Internal Procurement Unit or legal department. It will depend on the complexity of the procurement to which contract you use. For low complexity procurement where goods are the major item being purchased with an element of service, the goods contract may be sufficient, but the specification and the service level requirements would need to be defined in the Invitation to supply.
In a service contract, it necessary for suppliers to list the names of its staff providing the service. This is done to ensure that the organisation is obtaining services of qualified and experienced persons throughout the term of the contract and that the supplier does not change its staff for less qualified or experience people.
Fair payments policy
The clause for the fair payments policy in the contracts has been altered from the previous contracts. The Fair Payments Policy applies to contracts where the value of the goods or services does not exceed $3 million in aggregate. As such the standard form contracts have been amended to reflect this dollar value threshold.
This $3 million threshold limit is applicable to each contract. In the context of panel arrangements, each individual purchase order contract constitutes a separate contract between the Supplier and the State. The Victorian Government is silent as to how the dollar value threshold is to be applied to panel arrangements. In these circumstances, the Victorian Government Solicitors Office has stated that the Policy would apply to each individual purchase order contract.
Local Jobs First policy
The Local Jobs First requirements been not written into the market approach templates, To ensure that the these clauses are the most current and accurate, the template contracts refer to the Local Jobs First guidance material located on the Local Jobs First website
Using a deed of confidentiality
The One off and Sole entity purchase contracts for goods and services have confidentiality protection under the standard template contracts. However, there may be instances where an organisation may want the supplier or its representatives to enter into a separate deed of confidentiality. that is highly sensitive information is being shared during the procurement process and or after engagement.
A deed of confidentiality can serve as either of two purposes:
Demonstrate to employees and suppliers’ representatives that protection of confidentiality is important to the organisation; and
It gives the organisation direct contractual rights to take action against the person signing the deed of confidentiality if they threaten to take steps to disclose the confidential information.
Terminate without cause clause
The right to terminate without cause is included in the standard contracts as there are numerous reasons why the organisation may wish to terminate an arrangement. Reasons could stem from a change in government, policy or budget or the contractual arrangement is not meeting the original objectives etc. The contracts ensure that the supplier is paid for all goods and or services rendered up to the date of termination.
Reviewed 21 October 2019