Procuring Low-value Construction Works or Services

Policy

This policy sets out actions that schools must take to procure construction works or services valued between $5,000 and $100,000 (including GST).

Summary

• School councils have delegated authority to enter into construction procurement contracts for self-funded building works or improvements valued between $5,000 and $100,000 (including GST). This means schools do not need VSBA approval for any procurement below $100,000, but must follow the requirements set out in the Project Development and Construction Management Act (PDCMA) and Ministerial Directions.
• Schools must follow the requirements of this policy to ensure procurement that falls under low-value construction works or services, is compliant with requirements set out in PDCMA and Ministerial Directions.
• In line with requirements outlined in PDCMA, schools must obtain and upload into the Asset Management Information System (AIMS) at least one supplier quote for contracts valued between $5,000 and $50,000 (including GST), with school council approval for the quote. However, the Victorian Schools Building Authority (VSBA) recommends seeking multiple quotes wherever possible.
• Schools must obtain and upload into the Asset Management Information System (AIMS) at least 3 supplier quotes for contracts valued between $50,000 and $100,000 (including GST) and school council approval for the agreed quote.
• Schools must seek VSBA approval before proceeding to obtain tenders or quotes or entering into any associated works, if the contract value is estimated to exceed $100,000 (including GST).
• Schools are encouraged to use the Flowchart for single and multi-quote low-value construction procurements (PDF) for instructions on how to procure construction contracts valued between $5,000 and $100,000 (including GST) in compliance with this policy. For all contracts expected to be valued between $50,000 and $100,000 (including GST) schools must follow the multi-quote procurement model.
• Regardless of value, all projects involving ramps must be VSBA-led.

Details

The Victorian School Building Authority (VSBA) encourages schools to make independent financial decisions for construction works or services that are in the best interests of students and the school community. However, the VSBA must ensure that all school financial decisions are consistent with relevant policy, regulations and legislation.

Correctly executed procurement of public construction works or services valued between $5,000 and $100,000 (including GST) ensure the Department of Education fulfils its mandatory obligations under the Project Development and Construction Management Act 1994 (Vic) (PDCMA) and the Ministerial Directions and Instructions for Public Construction Procurement.

Compliance and monitoring

This section of the policy sets out the compliance and monitoring requirements that apply to the procurement of public construction works or services that are valued between $5,000 and $100,000 (including GST), in line with the 3 principal steps of the Buildings and Grounds Maintenance and Compliance policy: identify, manage and monitor.

Identify

The first step to ensure a school meets its compliance obligations when procuring public construction works or services is to identify if the intended works or services meet the threshold of between $5,000 and $100,000 (including GST) and whether public construction rules apply. Refer to the Definitions section of this policy for details regarding which types of works and services are covered by the public construction rules.

Manage

School councils have delegated authority to enter into construction procurement contracts for self-funded building works or improvements valued between $5,000 and $100,000 (including GST).

To meet their compliance obligations under the PDCMA, schools must:

• obtain at least one supplier quote for contracts valued between $5,000 and $50,000 (including GST). However, the VSBA recommends seeking multiple quotes wherever possible
• obtain at least 3 supplier quotes for contracts valued between $50,000 and $100,000 (including GST)
• upload the quote(s) into the AIMS
• ensure that the school council nominated financial delegate has endorsed the preferred tender recommendations before executing a contract.

If the contract value is estimated to exceed $100,000 (including GST), schools must not obtain tenders or quotes, or commence or enter into any associated works, services or contracts, until they have sought VSBA approval to proceed. Refer to School-funded Capital Projects Policy for information on how to seek approval.

Monitor

The department monitors compliance with mandatory requirements (using AIMS where possible) and responds to non-compliance at a school and system level through direct intervention or revision of policies and procedures.

The department will monitor compliance with the mandatory requirements for procurement of public construction works or services valued between $5,000 and $100,000 (including GST) through an annual auditing process of documents uploaded to AIMS.

Instructions for both single and multi-quote procurements

The Flowchart for single and multi-quote low-value construction procurements (in the Resources tab) instructs schools how to procure construction contracts valued between $5,000 and $100,000 (including GST) in compliance with this policy.

For all construction works or services expected to be valued between $5,000 and $50,000 (including GST), schools must source at least one supplier quote and upload the quote to AIMS. However, the VSBA recommends seeking multiple quotes wherever possible.

For all construction works or services expected to be valued between $50,000 and $100,000 (including GST), schools must source at least 3 supplier quotes and upload the quotes to AIMS.

For all construction works or services expected to be valued above $100,000 (including GST), schools must not obtain tenders or quotations, or commence or enter into any associated works, services or contracts, until they have sought VSBA approval to proceed.

The AIMS quick reference guide For external contractor work orders instructs schools on the method of processing external contractor work orders in AIMS, including how to upload quotes and attest to school council approval.

Definitions

Financial delegate
The school council must nominate a financial delegate, responsible for approving a construction procurement and endorsing a preferred tenderer recommendation before a contract can be executed.

The delegate is usually the school principal or the school council president in their roles as council executive. Schools can find more information on the roles and responsibilities of the school council in the School Council – Composition and Office Bearers policy.

Construction works
Construction works mean construction and maintenance (except cleaning, gardening, and services that don’t impact school infrastructure and fixtures), rehabilitation, alteration, extension, or demolition of any improvements on land by (or on behalf of) the department, including associated tendering processes, project delivery and contract administration.

Construction services
These services directly relate to delivering construction works. They include engineering, architectural, land surveying, and design services but not services indirectly related to construction, such as legal or commercial advice.

Ramp
A ramp is defined as an 'inclined surface on a continuous accessible path of travel between 2 landings with a gradient steeper than 1 in 20 but not steeper than 1 in 14'. Ramps will be designed in accordance with the Australian Standards.

Schools may refer to the School Funded Capital Works policy for additional information.

Maintenance
Procuring maintenance for school infrastructure and fixtures is subject to the requirements of the PDCMA. Examples include structural repairs (such as roof repairs), lifecycle items (for example, replacing a covered way), and repairs that extend the life of a structure (for example, painting the exterior of a building).

Maintaining non-fixtures — for example, changing light globes, inspections, servicing removable air conditioning units (as opposed to ventilation systems), or repairing modular furniture — is governed by the Financial Management Act 1994 (Vic) (FMA), not the PDCMA.

Public construction rules may not apply to minor maintenance (for example, repairing broken windows) that is part of broader facilities management agreements for services such as gardening, general cleaning or security. To decide if a bundle of maintenance activities is public construction, schools should consider the predominant purpose of the overarching contract and its potential impact on land or buildings. More information on maintenance and public construction can be found in DTF Guidance 1.3B, or call the VSBA.

(Non-construction related goods and services contracts are subject to the FMA. Refer to guidance for these at Procurement – Schools policy).

Related policies

• Procurement – Schools
• School-funded Capital Projects

Relevant legislation

• Ministerial Directions and Instructions for Public Construction
• Project Development and Construction Management Act 1994 (Vic)

Guidance

There is no further guidance for this topic. For more information, refer to Resources tab.

Resources

Flowcharts

The Flowchart for single and multi-quote low value construction procurements (PDF) instructs schools how to procure construction contracts valued at $100,000 or less (including GST) in compliance with this policy.

AIMS support

The AIMS quick reference guide for external contractor work orders instructs schools on the method of processing external contractor work orders in AIMS, including how to upload quotes and attest to school council approval.