Context

The Victorian Government is committed to encouraging open, equitable and effective competition between suppliers with the objective of obtaining value for money and enhancing opportunities for local business. Seeking multiple quotes for values less than the public tender threshold and conducting an open or selective tender for values in excess of the public tender threshold ensures this objective. However, there will be occasions when this requirement may not be the optimal sourcing strategy.

The party granting an exemption must be satisfied that the exemption is based on exceptional circumstances and not for the purposes of avoiding competition and that the integrity of the procurement process is maintained.

The exemption form (or equivalent) must be signed by the responsible party before process approval and engagement of a supplier(s). The Accountable Officer (AO) is responsible for approving an exemption (movement from the default position) of the ICT Software ownership default position. The AO/delegate/financial delegate (whichever is specified by internal process) can approve all other forms of exemptions. Subject to the agreement by the AO, approval of exemptions less than the public tender threshold may be delegated to persons with the appropriate financial delegation.

Exemptions must be considered on a case-by-case basis.

Market Engagement Process

Exemption from Seeking Multiple Quotes
An entity may be exempt from complying with the minimum quotation requirements where it can be demonstrated that one or more of the factors under Schedule 1 or other factors not listed that have relevance to the proposed procurement apply. Consideration should still be given to sourcing the requirement from a small business if appropriate.

Exemption from Seeking One Written Quote for Values Less Than $25,000
Where policy requires the provision of a single written quote (including electronic communication), the entity may seek a verbal quote where it can be demonstrated that one or more of the factors under Schedule 1 or other factors not listed that have relevance to the proposed procurement apply.

Exemption from Conducting an Open or Selective Tender (Limited Tender)
Where exceptional circumstances can be demonstrated as listed in Schedule 1 or other factors not listed that have relevance to the proposed procurement, an entity may exempt the purchase from open or selective tendering. Specific conditions such as the requirement to seek at least a minimum number of quotes may still apply.

NOTE: Purchases for requirements listed under Schedule 2 are exempt from VGPB policy. However, documentation that satisfies internal audit requirements of appropriate process applies.

ICT Software Intellectual Property

Government’s default position with regard to intellectual property (IP) for software created under contract allocates ownership of the IP to the software developers rather than the Victorian Government.
In exceptional circumstances, entities may need to own IP software created for it by software developers. Grounds that may establish exceptional circumstances may include but are not limited to:

• security;
• where statutes, regulations or prior obligations to a third party or parties preclude ownership by the contractor; and
• where exclusive use of the developed software by the government party is necessary.

Process for Seeking Approval to Depart from the ICT Software Intellectual Property Default Position (Exemption)
In seeking approval to depart from the default position, documentation must be provided which sets out the grounds establishing exceptional circumstances to justify a proposed departure.

Key Requirements

Responsibility for Granting Exemptions
Where an exemption form (or equivalent) is required, responsibility for granting the exemption rests with the AO/delegate/financial delegate (whichever is specified by internal process). The AO is responsible for approving an exemption (movement from the default position) from the ICT Software ownership default position. Subject to the agreement by the AO, approval of exemptions less than the public tender threshold may be delegated to persons with the appropriate financial delegation.

Exemptions should be approved prior to process approval and supplier engagement.

Granting of an exemption does not preclude obtaining process approval for all matters listed under Schedule 1 or other factors not listed that are relevant to the proposed procurement. The approved exemption form should be included along with any relevant documentation associated with process approval.

Financial Approval
All purchases establishing a contractual arrangement require financial approval provided by a person with the applicable financial delegation.

Definitions

• Accountable Officer

The head of any given department or, for a public body, the Chief Executive Officer (whatever their title) of that body.

• Covered entity

Departments and administrative offices bound by Victorian Government Purchasing Board (VGPB) policy

• Exemption Form

A form that can be used to seek an exemption. A sample form is hyperlinked to this policy.

• Open Tendering

A one stage process which involves the release of a Request for Tender (RFT) to the open market for purchases over $150 000 or under where the entity considers this approach as appropriate.

• Selective Tendering

A two stage approach to the open market involving first an Expression of Interest (EOI) or Request for Information (RFI) followed by a Request for Tender (RFT) to a selected number of suppliers who have satisfied an assessment of their capability and capacity.

• Limited Tendering

Limited tendering involves seeking an exemption from open and/or selective tendering to directly approach a single supplier or directly seek up to three written quotations (based on basic RFT documentation and rules).

RELATED BOARD POLICY AND DTF GUIDELINES:

• Open and Selective Tendering for purchases in excess of $150000* Policy

• Obtaining Quotes for purchases up to $150000* Policy

• Critical Incident Procurement Policy

• Procurement and Ethical Employment (Standard) Policy

• Regional Sourcing Policy

• Environmental Procurement Policy

• ICT Policy, Standards and Guidelines

• Australia - United States Free Trade Agreement (AUSFTA)

RELATED DTF TEMPLATES AND FORMS:

Exemption Form (58 KB DOC)

LINKS TO RELEVANT POLICY WEBSITES:

NIL

VERSION CONTROL INFORMATION:

Version Number	2
Release Date	May 2010
Further Information	Strategy and Policy, Government Services Division, Department of Treasury and Finance
Phone	(+613) 868 32944
Email	vgpb@dtf.vic.gov.au

SCHEDULES:

SCHEDULE 1

List of exemption factors

Process requirements

• Standard exemption form (or equivalent) signed by responsible party required
• APU process approval required

NOTE: The list below is not exhaustive and multiple factors may have relevance to the proposed procurement.

• Purchases funded by grants, loans or sponsorship from external persons/organisations where the entity conducting the purchase accepts public liability, product liability and professional indemnity obligations. Otherwise this activity can be considered as an item under Schedule 2.
• Matters of urgency including protection of human, animal or plant life or health, security or safety as a consequence of an unforeseen event or occurrence. Please note this is separate to the Critical Incident Procurement Policy which takes effect in emergencies.
• Where no quotes or tenders were submitted. In this case, consideration should be given to reappraising the project scope and specifications. Consideration should also be given to re-evaluating the market engagement strategy and the capability of the market in relation to the project requirements.
• An absence of competition or where specialist expertise is required.
• Where the goods or services can only be supplied by a particular supplier and no reasonable alternative or substitute goods or services exist.
• For additional delivery of goods and services that are intended either as replacement parts, extensions or continuing services for existing equipment, software, services or installations where a change in supplier would necessitate the procurement of goods and service that do not meet the requirements for interoperability or interchangeability.
• Where it is intended to procure a prototype of a first good or service intended for a limited trial. Where a good or service is developed in the course of, and for, a particular contract for research, experiment, study or original development.
• For goods purchased on a commodity market or for purchases made under advantageous conditions including unsolicited innovative proposals.
• Exceptional circumstances as determined by the Minister or Accountable Officer.
• Movement from the ICT intellectual property in software ownership default position.
• Expenditure on procurement of goods and services from all State and Territory public sector entities (including statutory authorities and government business enterprises) that cannot demonstrate that their procurement processes reflect the standards of Board policies.

An exemption only applies to the process of market engagement and does not excuse the procurement activity from process and financial approval.

SCHEDULE 2
List of exemption factors

Process requirements

• Exemption form (or equivalent) signed by responsible party NOT required
• APU process approval NOT required

Procurement items not covered by Board policy, however financial approval and documentation that satisfies internal audit requirements of appropriate process is required.

• Purchases funded by grants, loans or sponsorship from external persons/organisations where the entity does not accept liability.
• Expenditure on procurement of goods and services from the following:
  - Commonwealth, State/Territory departments within Australia
  - Other Victorian Government departments
  - All Victorian public sector entities (including statutory authorities and government business enterprises) that can demonstrate that procurement processes reflect the standards of Board policies.

NOTE: Commonwealth and State/Territory departments and some related public sector entities apply similar standards of accountability, probity and process to that applied to purchases between Victorian Government departments.

• Procurement for the direct purpose of providing foreign assistance.
• Expenditure on goods and services by offices of the State operating outside Australia.
• All expenditure specifically authorised by the Governor-in-Council on the recommendation of the Minister for Finance.
• Department of Justice expenses incurred by the Sheriff in the course of executing writs, warrants and Orders of the Court.
• Periodicals, textbooks and books of reference including supplements to such publications of relevance to legal proceedings, for judges' and public legal related entities.
• Expenditure for the use of His or Her Excellency the Governor and for the upkeep and maintenance of Government House.
• Purchases from Australian disability enterprises and other businesses that primarily exist to provide services to people with a disability, philanthropic or not for profit institutions.
• Purchases from indigenous enterprises which are certified as members of the Australian Indigenous Minority Supplier Council (AIMSC).
• Procurements by covered entities on behalf of non-covered entities.
• As a result of a design contest.
• The requirement is for works of art.
• Confidential matters relating to security or safety and also protection of national treasures of archaeological value.
• Expenditure for products and services where the relevant brand or supplier(s) has been specified under legislation or regulation (i.e. breath testing equipment and speed measuring devices) or determined as required to comply with National/Federal Government standards (forensic capability).
• Procurement of goods and services for the gathering of data relating to national security matters.
• Expenditure on the services of authorised persons undertaking audits for the Victorian Auditor-General’s Office.