VIPP is required for all government departments and agencies under the Financial Management Act (FMA), but the mechanics of when it applies and how to evaluate it is not widely understood, even amongst those who practice procurement more frequently.
So when does VIPP apply?
VIPP applies for projects meeting or exceeding the following set GST exclusive thresholds.
VIPP Standard Project
- $1 million and above (value over the life of the activity) in regional Victoria
- $3 million and above (value over the life of the activity) in metropolitan Melbourne or for Statewide contracts.
VIPP Strategic Project
- $50 million or above (value over the life of the activity), or
- As deemed by government.
A few key tips:
- Prior to the release of tender documents, projects should be registered with the Industry Capability Network (ICN) to be assessed for contestable items. Contact ICN early in the planning stages to discuss your project to avoid any delays down the track.
- For VIPP Strategic Projects this assessment also informs the setting of the minimum local content requirement and other conditions by the government, with this work led out of the Department of Economic Development Jobs, Transport and Planning.
- VIPP projects attract a minimum weighting of 10% for local content and needs to be included in evaluating responses to tenders where VIPP applies. Early consideration will need to be given to how this works in your evaluation, particularly if your weightings are not percentages or criteria are not weighted.
- The minimum local content requirement (along with any other requirements) and the VIPP 10% weighting must be specified in tender documents.
- A tender is not complete without an ICN acknowledgement letter.
For standard projects VIPP Plans are to be completed and submitted by shortlisted respondents (or all respondents if there is no shortlisting) where contestable items apply.
For Strategic Projects respondents are expected to work with ICN to prepare a Local Industry Development Plan (LIDP). Preparation of an LIDP can take between one and three weeks.
Only complete and acceptable (VIPP / LIDP) plans will be acknowledged by the ICN.
Our most common question from clients is -
How and when do I evaluate VIPP?
The answer is not as complex as often thought. The Department of Economic Development, Jobs, transport and Resources (DEDJTR) has some great guidance available within Appendix D of the Victorian Industry Participation Policy Agency Guidelines[i].
In the example above the total scores can now be carried through to the Evaluation Matrix and contribute to the overall value for money scores for the 3 shortlisted respondents.
The process also relies on the ICN acknowledging the Plan – if it does not then a zero score is assigned to the bidder for this component.
Applying and evaluating VIPP can be simple if the right planning is in place.
There is a great deal of information on the DEDJTR website to provide guidance to Victorian Departments, Agencies and bidders alike. All of which can assist throughout the process.
For further information and assistance with end to end procurement, please contact Louise James to discuss how we can help.[ii]
[i] Approval and final editing by Richard Exley, Sector Strategy Manager, Industry Participation & Construction, Department of Economic Development, Jobs, Transport and Resources.
[ii] Content and examples for this article have been sourced from the Department of Economic Development, Jobs, Transport and Resources Local Jobs First - VIPP Agency Guideline which can be located and downloaded here.