Councils enter into contracts for a range of goods, services and works needed to deliver council services and infrastructure.

It is essential that councils are achieving value for money for the community when carrying out procurement activities.

Under the Local Government Act 1989, councils must use resources efficiently and effectively and provide services in accordance with best-value principles to meet the needs of the local community, and improve the quality of life in the local community.

Councils must also carry out all procurement activities in accordance with their procurement policies, and the public tender requirements in the Act.

To achieve this, the procurement activities of councils must provide:

  • value for money
  • open and fair competition
  • accountability
  • risk management
  • probity and transparency
  • social value

Procurement Best Practice Guidelines

Local Government Victoria (LGV) issues best practice guidance to councils on procurement practices.

The Local Government Best Practice Procurement Guidelines help councils understand their obligations under the Act and develop and maintain best-practice approaches to procurement.

The guidelines can be used by both local government procurement specialists and by staff engaged in routine procurement activities.

The guidelines detail legislative requirements and guide councils through the various stages of the procurement process: planning, implementation, management, evaluation and reporting.

Local Government Best Practice Procurement Guidelines PDF, 1505.17 KB
Local Government Best Practice Procurement guidelines DOC, 1246.5 KB

The Local Government Act 2020 received Royal Assent on 24 March 2020. The new Local Government Act 2020 is the most ambitious reform to the local government sector in over 30 years. The Act will improve local government democracy, accountability and service delivery for all Victorians. The Local Government Act 2020 will be proclaimed in 4 stages:

Stage 1 - 6 April 2020
Stage 2 - 1 May 2020
Stage 3 - 24 October 2020
Stage 4 - 1 July 2021 (includes provisions pertaining to procurement)

Local Government Victoria is currently working with councils in a sector-led approach of co-design and consultation to develop products and materials that are customisable and scalable for individual council’s needs.

Visit EngageVic to contribute to the development of guidance material that will support councils in meeting the new requirements of the Act.

UPDATE: Preface To New Best Practice Procurement Guidelines

With this in mind the procurement best practice guidelines will be re-written to align with the changes pertaining to procurement in the new act 2020.

A preface was developed to serve councils with information on ‘emerging themes’ in the new document. LGV will consult with the sector procurement specialists for the development of the new guidelines.

Preface to new Best Practice Procurement Guidelines PDF, 308.99 KB

The Independent Broad-based Anti Corruption Commission’s 2019 special report ‘Corruption Risks Associated with Procurement in Local Government’ recommended LGV consider the development of a code of conduct for suppliers to Victorian councils.

LGV, with the Department of Treasury and Finance and the Victorian Government Purchasing Board has developed a template Supplier Code of Conduct for the local government sector.

A template for the Supplier Code of Conduct for Local Government can be found here DOCX, 1548.9 KB

Social procurement

Social procurement is a way to generate social value through purchasing and procurement processes  that benefit the community.

More information

Beyond Value for Money: Social Procurement for Victorian Local Government is the guidance issued to council on social procurement.  It is co-published by LGV and the Municipal Association of Victoria (MAV).

The social procurement guide is a practical step-by-step guide for councils to assist them to  incorporate social procurement into every stage of a procurement project.

Beyond Value for Money: Social Procurement for Victorian Local Government 2nd Edition  PDF, 582.75 KB

Exemptions from tender requirements

In some situations, the requirements for councils to carry out a public tender or expression of interest for contracts valued at or over $150,000 (for goods or services) or $200,000 (for works) does not apply.

These include when:

  • the council resolves that the contract must be entered into because of an emergency
  • a council is acting as an agent for a group of council and has carried out a public tender or expression of interest process on their behalf
  • the Minister for Local Government has approved the arrangement prior to the council entering into the contract
  • the contract is for legal services (which are exempt under the Local Government (General) Regulations 2015)
Ministerial approvals

The Minister’s power to grant approval to councils is discretionary, and the Minister must be satisfied that there are sound reasons to do so and value for money will be achieved through the proposed arrangement.

LGV has developed an application form to assist councils seeking Ministerial Approval under section 186(5)(c) of the Local Government Act 1989. The application form is designed to assist in the timely assessment of an application by ensuring that all key information is provided from the outset.

Ministerial Approved Arrangements – application form

All application forms should be accompanied by a covering letter addressed to the Minister for Local Government, with a copy e-mailed to lgv@ecodev.vic.gov.au.

Draft applications can be emailed to Local Government Victoria for feedback.

Ministerial approvals that apply to all councils have been issued. These approvals provide access buying groups and state government arrangements where an alternative competitive process has been undertaken.

These enable councils to access state contracts including:

  • State purchase contracts and whole of Victorian Government contracts - standing offer agreements for Victorian government common use goods and services, which are established when value for money can best be achieved through aggregating demand
  • The construction suppliers register - a pre-qualification scheme for building and construction industry consultants and contractors
  • The marketing services register - a pre-qualification scheme for a range of creative services within advertising and communication

Access to these contracts gives councils the buying power of the state government in the confidence that the contracts have been developed through the best procurement processes.

Victorian Government purchasing board’s buyers section provides procurement resources, templates and guidance.

There are also approvals for councils to access Procurement Australia and MAV Procurement.

Requirements for access to approvals

Councils who wish to access the buying groups or state government arrangements must follow the rules of use and the requirements in the approval instruments.

Regional procurement excellence networks

The regional procurement excellence networks (RPENs) are council networks formed to encourage engagement between procurement and purchasing officers. RPENs provide a platform for local governments to collaborate on procurement and general business practices.

There are nine RPEN groups, with representation from all 79 councils.

LGPro’s procurement special interest group is the central coordinating point for RPENs.

For more information about RPENs, please contact:

Silke Therhaag
Program Coordinator Procurement & Collaboration, Local Government Victoria
silke.therhaag@ecodev.vic.gov.au