education.vic.gov.au

School operations

School-funded Capital Projects

Step 3: Proceeding to tender and contract for project delivery

Once the project proposal is approved, the VSBA will also communicate the decision regarding the delivery model of the project (i.e. school-led or VSBA-led).

School-funded projects estimated to be between $100,000 (including GST) and $500,000 (including GST), and considered to be low-risk, will be led by the school.

School-funded projects estimated at or above $500,000 (including GST) or projects assessed to be high risk regardless of value, will be VSBA-led and attract a 5% Portfolio Asset Management Allowance fee.

Projects delivered by the school

Similar to the project proposal approval process, the tender and contract process varies depending on the project. There are different tender and contract processes for:

  • school-funded projects estimated to be $100,001 to $200,000 including GST
  • school-funded projects estimated to be $200,001 to $500,000 including GST.

Information required for the tender and contract process for consultants and contractors

In accordance with the revised Ministerial Directions, all procurement activities must now follow the following rules for works undertaken by a single supplier (builder):

  • up to $50,000 (including GST in value) – at least one quote is required
  • between $50,001 to $200,000 (including GST in value) – at least 3 quotes are required
  • between $200,001 to $500,000 (including GST in value) – formal tenders must be sought from a minimum of 3 builders
  • over $500,000 (including GST in value) – VSBA must issue a Forward Notice/Expression of Interest (EOI) to all pre-qualified builders on the Construction Suppliers Register (CSR)External Link prior to calling of formal construction tenders.

For projects up to $500,000 (including GST) it is preferred that schools seek tender prices from pre-qualified building contractors on the CSR. For projects in this value range deemed to be high-risk, schools may be required by the VSBA to engage a contractor from the CSR.

For school-funded projects estimated to be $50,001 to $200,000 (including GST)

Stage 1: Consultant engagement

It is unlikely that consultants engaged for works in this project cost category will require VSBA approval as fees will not exceed $100,000 (including GST).

  • If the quote is under $50,000 (including GST) this is within the school’s financial delegation, the school can accept the quote and proceed with the works without needing to seek formal written approval from the VSBA.
  • If the quote is between $50,000 and $100,000 (including GST) this is within the school’s financial delegation. However, schools must ensure they have sought at least 3 written quotes, and comply with the Procuring Low-Value Construction Works or Services policy.
  • If the quote is over $100,000 (including GST) and is therefore outside of the school’s financial delegation, the school will need to seek VSBA approval.
Stage 2: Seek approval from VSBA to proceed to construction tender

Schools are required to provide the following documentation to the VSBA:

  • tender drawings and specifications indication of compliance against VSBA’s Building Quality Standards Handbook (BQSH) and relevant standards
  • tenderer shortlist
  • completed conflict of interest forms (Conflict of Interest form template available on the Resources tab)
  • written request seeking approval to proceed to construction tender on a school letterhead (Approval to Proceed to Construction Tender template available on the Resources tab)
  • forecast date for commencement and completion of construction works.
Stage 3: Seek approval from VSBA to proceed to construction contract

Schools are required to provide the following documentation to the VSBA:

  • 3 written quotes
  • quote/tender evaluation recommendation report based on contractor selection criteria
  • completed conflict of interest forms (Conflict of Interest form template available on the Resources tab)
  • written request seeking approval to enter into construction contract on a school letterhead (Approval to Enter into Construction Contracts template available on the Resources tab)
  • forecast date for commencement and completion of construction works.

For school-funded projects estimated to be $200,001 to $500,000 (including GST)

Stage 1: Seek approval from the VSBA to engage a consultant (where engagement is estimated to exceed $100,000 (including GST)

Schools are required to provide the following documentation to the VSBA:

  • 3 written quotes
  • quote evaluation recommendation report based on consultant selection criteria
  • completed conflict of interest forms (Conflict of Interest form template available on the Resources tab)
  • written request seeking approval to engage a consultant on a school letterhead (Approval to Enter into Consultant Contracts template available on the Resources tab).
Stage 2: Seek approval from the VSBA to proceed to construction tender and tender evaluation

Schools are required to provide the following documentation to the VSBA:

  • comprehensive request for tender (RFT) documentation, including but not limited to DET approved contract, construction drawings and specifications (required RFT documentation confirmed by VSBA following project approval)
  • independent cost estimate for construction works (Pre-Tender Estimate/Cost Plan D)
  • name of 3 proposed contractors the school wishes to invite to tender (preferably pre-qualified building contractors from the CSR)
  • written request seeking approval to proceed to tender on a school letterhead (Approval to Proceed to Construction Tender template available on the Resources tab).
  • completed conflict of interest forms (Conflict of Interest form template available on the Resources tab).

Schools should establish a tender evaluation panel (consisting of members of school staff and/or school council representatives and consultants) to review the tender submissions and provide a recommendation for contract award based on evaluation criteria (i.e. value for money, capability, capacity, program, risk and experience).

Stage 3: Seek approval from the VSBA to enter construction contract

Schools are required to provide the following documentation to the VSBA:

  • all tender submissions
  • tender evaluation report
  • conflict of interest forms from all involved parties (the school and consultants) (refer to Resources tab for Conflict of Interest form template)
  • forecast date for commencement and completion of construction works
  • written request for approval to enter contract on a school letterhead (Approval to Enter into Construction Contracts template available on the Resources tab).

Schools are required to provide the VSBA with an electronic copy of the fully executed construction contract.

Confidentiality and conflict of interest during the tender process

It is important that tender pricing remains confidential until the tender period has concluded, and construction contracts have been executed by both parties.

The school should form a tender evaluation panel (consisting of members of school staff and/or school council representatives and consultants) to review the prices submitted by building contractors.

It is also important that any real or perceived conflict of interest is avoided throughout the tender process. For all school-led projects, the following situations present a clear conflict of interest and must be avoided:

  • members of school council and school staff (including relatives) providing pricing for goods/services
  • individuals or businesses coordinating the process of obtaining pricing for works where they are also submitting pricing (this provides that individual or business with an unfair commercial advantage).

Schools should use the Conflict of Interest template (DOCX)External Link and provide it to the VSBA when appropriate.

Refer to the School Council – Conduct and Conflict of Interest Policy for information on school council obligations in relation to their Code of Conduct and conflict of interest.

Obtaining independent cost estimates – required for projects over $200,000 (including GST)

Prior to proceeding to tender for the construction works, schools with school-led projects estimated to be between $200,001 to $500,000 including GST must ensure that the estimated project cost is within available school funds and within the maximum amount specified in the approved project proposal form. Schools must obtain an independent cost estimate for the project.

The cost estimate must be provided by an independent organisation, who will not be tendering or carrying out the actual construction works.

For example, if the school wishes to seek actual pricing from a builder for the construction works, that builder cannot provide an estimate to inform the project budget as they are not independent and will have an unfair advantage over other builders who submit their prices.

This independent cost estimate may be either:

  • Cost Plan D – a breakdown of all construction works, and costs prepared by a qualified quantity surveyor.
  • Estimate of probable costs – a breakdown of likely construction costs prepared by a consultant (architect or project manager).

VSBA assessment of documentation provided for approval to proceed to tender and contract for project delivery

When all documentation has been submitted, the VSBA will conduct a technical review of the documentation. VSBA Project Delivery Branch will assess whether the proposed works:

  • comply with the department’s current Building Quality Standards Handbook (BQSH)
  • are documented to a sufficient standard to enable the school to obtain accurate pricing from builders
  • offer good value for money for the school.

Approval to proceed to tender

Once VSBA has assessed the independent cost estimates and supporting documents, the school will receive formal approval to proceed to tender, signed by the VSBA Project Delivery Manager.

Approval to enter a construction contract

When construction tenders have closed, the school and/or consultant should evaluate submitted proposals to determine the preferred contractor. The VSBA Project Delivery Manager can provide advice and template documents to assist the school with the tender evaluation process, if needed.

The school must seek approval to enter a construction contract from the VSBA Project Delivery manager with the preferred contractor before the school contacts the contractor and advises that they have been successful.

It is vitally important that tender pricing remains confidential until the tender period has been completed and construction contracts have been signed between the school and the successful contractor.

The VSBA Project Delivery manager will review the documents to ensure that:

  • no conflict of interest, real or perceived, in accordance with the School Council – Conduct and Conflict of Interest Policy, exists between the school/school council and any of the tendering contractors
  • correct procurement process was followed
  • thorough tender evaluation process was followed.

Once the VSBA has completed the review, the school will receive formal approval to enter a construction contract, signed by the VSBA Project Delivery manager. The school or their consultant can then contact the preferred contractor and advise that they have been successful. Construction contracts must be signed between the school and the contractor and a digital copy provided to the VSBA before construction works can commence.

Insurance

The department has portfolio-wide insurance cover in place for construction risks and products and public liability related to construction works on school sites. Whilst all registered builders and tradespeople are required to have their own insurance policies in place, all works carried out on school sites are covered by the department’s Insurance for Schools Policy as well.

VSBA Project Delivery periodically updates the department’s insurer with a comprehensive list of all active government funded projects, as well as a list of current school-funded projects. This means that if there are serious issues during the construction of a school-funded project, the school’s builder may be able to draw upon the Insurance for Schools Policy rather than their own policy.

VSBA Project Delivery can provide the relevant insurance policy documents for inclusion in your construction tender and contracts as well as advice on insurance matters should the need arise.

Projects delivered by the VSBA

For projects delivered by the VSBA, the VSBA works in partnership with the school to deliver the approved scope of works throughout the project delivery stages, until the conclusion of the defect liability period.

If your school’s project is approved to be VSBA-Led

School-funded projects delivered by the VSBA follow a similar approach to State Budget-funded capital works projects. This includes:

  • an estimated 68-week duration for planning, design, and procurement (master planning, schematic design, design development, tender documentation, tendering and tender evaluation) to the commencement of construction, followed by a 12 month defects liability period after project completion.
  • completion of a Form 15 area analysis which forms part of each design milestone review (noting that there may be additional over-entitled area being constructed)
  • independent design and project quality assurance.

The school must transfer to the VSBA 10% of the school-funded project value at commencement and 90% prior to construction contract award.

For high value/high risk projects delivered by the VSBA, schools are required to pay a Portfolio Asset Management Allowance (PAMA) fee of 5% of the total project costs.

Confirmation of available funds

For constructing or upgrading facilities, schools must provide written confirmation of available funds at the following project milestones:

  • AMP Phase 2
  • schematic design and design development (if applicable)
  • tender documentation
  • tender evaluation and contract award.

To ensure that all project transactions are captured in the VSBA’s project management system, the VSBA will make payments directly to consultants and contractors on behalf of the school.

Guidance chapter on step 3 of the approval process

Reviewed 19 June 2024

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