How to achieve value for money

When buying for Queensland Government, you have a responsibility to ensure the delivery of value for money in areas beyond price.

Value for money procurement includes:

  • conducting a local benefits test for all significant procurement where a weighting of up to 30 per cent may be applied
  • advancing the government’s economic, environmental and social objectives 
  • cost-related factors including
    • up-front price
    • whole-of-life costs
    • transaction costs associated with acquisition, use, holding, maintenance and disposal
  • non-cost factors such as
    • fitness for purpose
    • quality
    • delivery
    • service
    • support.

For major projects of $100 million and above and declared projects, additional best practice principles must be applied as part of the value for money assessment. Refer to the Queensland Procurement Policy (PDF, 420KB) Clause 1.1 for details.

Consider value for money throughout the entire procurement process:

  • Invest in up-front planning.
  • Give advance notice and undertake early engagement.
  • Include value for money in objectives and outcomes.
  • Evaluate offers for value for money.
  • Select the offer that demonstrates best overall value for money.
  • Drive value for money through the life of the contract.

Value for money considerations

  • Look at broader community benefits—are there opportunities to improve social, economic, and environmental outcomes?

    Examples
    • Social—workplace policies aimed at domestic and family violence initiatives, or social enterprises.
    • Economic—increasing jobs regionally or increasing spend with Aboriginal and Torres Strait Islander businesses.
    • Environmental—increasing environmental outcomes and sustainability.
       
  • Make it easy for industry to get involved:
    • Give the market advance notice.
    • Ensure local suppliers are given a full and fair opportunity to bid.
    • Take advantage of local capability.
       
  • Evaluate offers against value for money criteria:
    • Factor in costs such as transactional, logistics and maintenance expenses.
    • Ensure the good or service is ‘fit for purpose’.
    • Look at a supplier’s capability such as management, financial viability and previous performance.
       
  • Drive value for money through the life of the contract:
    • Work together to continually improve processes.
    • Collect and analyse performance data against agreed key performance indicators.
    • Check requirements are being met.
    • Proactively identify and manage issues.

Contact

For general procurement queries, email betterprocurement@hpw.qld.gov.au.