Ministerial Direction No. 1: Tendering Provisions for
Public Construction
Ministerial Direction No. 1: Tendering Provisions for
Public Construction
I, Justin Madden, Minister for Planning and Minister responsible for Part 4 of the
Project Development and Construction Management Act 1994 (the Act), hereby
issue the following Direction pursuant to Section 30 of that Act, to come into effect on 1
June 2008.
Order of precedence
In accordance with Section 31 of the Act, to the extent that this Direction is inconsistent
with a provision of a supply policy within the meaning of the Financial Management
Act 1994, this Direction is to prevail.
For Victorian Government departments and associated administrative bodies only, as
defined in section 2 of the Australia-United States Free Trade Agreement, where this
Direction is inconsistent with that Agreement, the processes required by that Agreement
will prevail including any exemption provisions.
In this Direction –
“AUS FTA” means – the Australia-United States Free Trade Agreement Chapter Fifteen
- Government Procurement which came into force on 1 January 2005;
“Accountable Officer” means the Accountable Officer as defined in the Financial
Management Act 1994;
“pre-qualified” means - assessment prior to seeking tenders or proposals based on
criteria including those required by section 4b) below;
“proposal” means - an offer in writing for the supply of related consultancy services
based on project specific criteria including price and those required by section 4b)
below;
“Secretary” means the Secretary of the Department for the time being specified by an
Administrative Arrangements Order made under the Administrative Arrangements
Act 1983 as having responsibility for part 4 of the Act;
“tender” means - an offer in writing for building and construction works based on project
specific criteria including price and those required by section 4b) below.
Tendering Provisions for Public Construction
1. Procedure
The following procedure must be followed for the entering into of any contract to
undertake building and construction works or for the supply of related consultancy
services.
Where the amount to be expended to undertake building and construction works
(including GST):
a. is estimated to be $25,000 or less, at least one written tender which is
consistent with current market prices must be obtained;
b. is estimated to be greater than $25,000 but does not exceed $200,000, at
least three written tenders must be sought;
c. is estimated to exceed $200,000 (refer to Clause 2 below for additional
procedure where the AUS FTA applies):
i. tenders must be sought from at least three pre-qualified contractors; or
ii. tenders must be sought by public advertisement,
unless, in regard to sections 1a) to 1c), the relevant Minister or Accountable Officer
certifies in writing that any of the special circumstances set out in Clause 3 apply,
in which case the relevant Minister or Accountable Officer shall determine the
procedure to be used.
Where the amount to be expended for the supply of building and construction related
consultancy services (including GST):
d. is estimated to be $25,000 or less, at least one written tender which is
consistent with current market prices must be obtained;
e. is estimated to be greater than $25,000 but does not exceed $150,000 at least
three written tenders must be sought;
f. is estimated to exceed $150,000 (refer to Clause 2 below for additional
procedure where the AUS FTA applies):
i. tenders must be sought from at least three pre-qualified consultants ; or
ii. tenders must be sought by public advertisement,
unless, in regard to sections 1d) to 1f), the relevant Minister or Accountable Officer
certifies in writing that any of the special circumstances set out in Clause 3 apply,
in which case the relevant Minister or Accountable Officer shall determine the
procedure to be used.
Where the amount to be expended is a tender complying with 1c, criteria specified in
accordance with 4bii must be applied.
2. Effect of the AUS FTA
Where the AUS FTA applies and where the amount to be expended (including GST):
a. is estimated to exceed $9,933,000 or such other amount as amended, to
undertake building and construction works (described in the Agreement as
“procurement of construction services”); or
b. is estimated to exceed $705,000 or such other amount as amended, for the
supply of related consultancy services (described in the Agreement as
“procurement of goods and services”); and,
c. where this Direction is inconsistent with the AUS FTA, the processes required
by that Agreement will prevail including any exemption provisions.
Amounts stated in 2a. and 2b. above are current at January 2008 and amended every 2
years.
3. Special Circumstances
The special circumstances for procurements where the AUS FTA is applicable are
those circumstances covered by that Agreement’s exemptions. For all other
procurements under this Direction the special circumstances are:
a. works or related consultancy services of an urgent nature; or
b. only a limited number of contractors or consultants could perform the works or
provide the related consultancy services due to the specialist expertise required;
or
c. specialised security work; or
d. the expenditure is for additional works or services which are an extension of
approved works or services authorised under an existing contract; or
e. works are to be carried out in or services related to leased premises where:
i. the contractor or consultant is required to be approved by the lessor; or
ii. the costs of the approved works or related services are to be reimbursed to
the lessor in accordance with the leasing arrangements; or
f. the related consultancy services are the result of a design competition; or
g. exceptional circumstances as certified by the Minister or Accountable Officer.
4. Guide to Ministerial Direction No 1
The following shall be specified in the Guide to Ministerial Direction No 1 published from
time to time by the Secretary which is hereby incorporated into this Direction:
a. The accreditation process and names of Whole of Victorian Government and
Agency Specific Registers of pre-qualified building and construction consultants
or contractors to be maintained by agencies under this Direction;
b. Ethical Purchasing – Construction;
The mechanisms and administrative arrangements to ensure that construction
procurement under this Direction is conducted in an ethical manner, specifically:
i. mandatory categories or classifications of pre-qualified construction
suppliers to be maintained by accredited whole of Victorian Government
and/or Agency Specific Registers;
ii. mandatory criteria that must be incorporated into pre-qualification processes
and when obtaining one or more tenders or proposals in accordance with
this Direction;
iii. approved assurance systems which may be cited by consultants and/or
contractors as evidence of compliance with mandatory criteria;
iv. recommended criteria that may be incorporated into pre-qualification
processes and used when obtaining one or more tenders or proposals in
accordance with this Direction;
v. reporting requirements for use by Departments and/or Public Bodies when
preparing performance reports on building and construction consultants or
contractors participating in tendering processes, entering into contracts
and/or delivering works or services in accordance with this Direction;
vi. the mechanism and administrative arrangements for the development and
approval of mandatory criteria and for advising the Secretary on matters
relating to this Direction.
Justin Madden MLC,
Minister for Planning