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7. Procurement strategy

Outline the strategy required to enable procurement of the services or the project.

The possibility of Partnerships Victoria delivery is to be fully and objectively considered for initiatives where the net present cost of the cash flows is greater than $25 million. Partnerships Victoria has real potential to deliver value for money where:

  • it is possible to clearly define required outputs to allow a payment mechanism to be structured
  • the project has complexity and there is significant scope for innovation
  • there are opportunities for risk transfer
  • there is a potential market interest in the proposal.

The gateway process has a separate document and evaluation of the procurement option. The essential point at the business case is to:

  • Determine if the project is potentially suitable for a Partnerships Victoria delivery strategy and should proceed to the business case.
  • In practice, health projects under $100m are unlikely to be suitable for PV delivery unless there is significant scope for innovation and opportunities for risk transfer not available through alternative procurement strategies. This is consistent the Fitzgerald review.
  • Outline any principles of procurement that will require cabinet endorsement.
  • Document assumptions on procurement that impact on a decision to proceed (eg complexity, timing, risk, cash flow).
  • Note if procurement strategy is different between options.