Strategic Procurement Framework

About Recycling Victoria

As the recycling industry continues to transform — including by responding to changes in international markets — it is essential that Victoria’s waste and resource recovery sector can deliver services for our current and future needs, minimise costs and maximise the benefits of resource recovery for households and the business community.

Recycling Victoria is building a more sustainable and stronger circular economy system through the provision of leadership and oversight of the state’s waste, recycling and resource recovery services.

Transitioning to a stronger circular economy will encourage innovation, give rise to more sustainability focussed jobs, provide quality goods and services to end users, and enable more consistent and high-quality recycled material for remanufacturing into new goods that are supplied to the marketplace.

Through our work we focus on building a world class circular economy system that minimises the impact on non-renewable resources and makes a strong contribution towards a more sustainable and climate resilient future for all Victorians.

Recycling Victoria works with other divisions of the Department of Energy, Environment and Climate Action (DEECA), the Environment Protection Authority Victoria, (EPA) and Sustainability Victoria, (SV) to share information, deliver a coordinated and evidence-led approach to managing risks in the sector and deliver a circular economy for Victoria.

In February 2020, the Victorian Government released its Recycling Victoria: A new economy policy and action plan to reform our waste, recycling and resource recovery system and transition Victoria to a circular economy over the next decade. As part of this policy, Recycling Victoria was created to provide leadership, stewardship and oversight of waste, recycling and resource recovery services, and to support the development of a circular economy with a range of regulatory and strategic planning functions and tools. These are outlined in the Recycling Victoria Strategic Plan 2023 – 2026.

Purpose of the Strategic Procurement Framework

The purpose of this Strategic Procurement Framework is to define how Recycling Victoria will meet our procurement support responsibilities under the Circular Economy (Waste Reduction and Recycling Act) 2021.

The framework also sets out how Recycling Victoria will deliver on a strategic priority in the Recycling Victoria Strategic Plan 2023–2026 – supporting local government towards best practice procurement to deliver reliable and consistent waste, recycling and resource recovery service experiences and best value for money for the Victorian community.

The framework outlines how Recycling Victoria will deliver the objectives of our procurement support function. It sets out the potential support Recycling Victoria could provide at various stages of a procurement, and how we will approach guidance materials. The framework also sets out how we will prioritise the procurement support activities we will undertake.

Procurement of waste, recycling and resource recovery services is an important function of councils and Alpine Resorts Victoria (ARV). By approaching this function in a strategic manner, procurement becomes a powerful tool for supporting the move to a circular economy.

A strategic approach to procurement informs all elements of the process. It includes:

• identifying clear objectives and outcomes for procuring services that are aligned with wider sector goals
• selecting the procurement approach most likely to secure those outcomes.

Objectives and outcomes could include:

• stronger, more resilient services
• increased recovery of resources and local circularity
• supporting infrastructure investment
• designing and running the procurement exercise, including tender and contract specifications that can deliver the desired outcomes, mitigate risks, and attract competitive bids
• sharing best practice and lessons learned after the procurement is complete.

Recycling Victoria will support councils and ARV to consider procurement strategies, objectives and priorities which aim to create strategic outcomes.

Our approach

In developing the framework, Recycling Victoria has sought to understand the procurement levers that could improve the management of all municipal kerbside waste streams and address state significant market opportunities and industry risks.

By sharing information such as market intelligence on material flows, recovery rates, and regional and statewide infrastructure opportunities, councils and ARV can be well informed to make strategic, evidence-based procurement decisions. Information about procurement approaches, contracting and sharing lessons learned can also help deliver strategic outcomes and mitigate risks.

The considerations outlined below have also shaped the way Recycling Victoria will approach our support to councils and ARV in their procurement of waste, recycling and resource recovery services.

Recycling Victoria’s regulatory functions and objectives

The framework is based on Recycling Victoria’s legislative responsibilities.

Under the Circular Economy (Waste Reduction and Recycling Act) 2021 (CE Act), Recycling Victoria may provide advice and support to councils and ARV. Recycling Victoria may also issue guidelines.

This framework does not include procurement support that creates real or perceived conflicts with Recycling Victoria’s legislative responsibilities. It also does not consider procurement support that would go beyond advice or guidelines, as specified by legislation.

Council and Alpine Resorts Victoria ownership

Decisions on the acquisition of waste, recycling and resource recovery goods or services sit with the delegated authority of a council or ARV, as the goods or services being procured are ultimately owned and managed by these organisations.

There is no mandatory requirement for councils or ARV to use any information or guidance provided by Recycling Victoria to support their procurement process.

Recycling Victoria does not have any delegated decision-making authority or power over the evaluation or appointment of a tender on behalf of councils or ARV.

The role of other agencies

Other organisations such as the Municipal Association of Victoria (MAV) and procurement consultancies offer support to councils and ARV to strategically procure goods and services. This includes:

• tailored procurement training
• access to supplier contract panels
• best practice procurement guidance
• specialists to support the facilitation and management of procurement processes.

Recycling Victoria does not seek to duplicate any services provided by other organisations. The Strategic Procurement Framework sets out how Recycling Victoria can add value and complement the other supports available in the marketplace. We will work collaboratively to explore where other agencies may be able to support the implementation of priorities and circular economy policy outcomes.

Best practice procurement and probity

In accordance with best practice, the effective and careful management of probity is critical to the integrity and success of any procurement. Under the CE Act, Recycling Victoria’s procurement support function will be guided by a strong governance framework that supports the identification and management of conflicts, confidentiality and other probity risks and issues.

Our objectives

Recycling Victoria’s procurement support function has the following objectives:

• Assist councils and ARV in their procurement of waste, recycling and resource recovery services that maximise diversion of waste from landfill and promote circularity in the use and reuse of products.
• Assist councils and ARV to procure high quality and localised waste, recycling and resource recovery services which are reliable and provide value for money and efficient use of resources.
• Support the development of a sustainable and innovative waste management system that can adapt to changing market conditions and build resilience.
• Support partnerships that enhance service provision, regional economies of scale and infrastructure delivery.
• Support capability building and continuous improvement in procurement and contract management practices undertaken by councils and ARV.
• Support procurement processes that are streamlined, fair, transparent and provide accountability.
• Support councils and ARV to understand and comply with relevant service standards and procurement requirements under the CE Act.

Achieving our objectives

Recycling Victoria has responsibilities across several areas that will contribute to the achievement of procurement objectives. The strategic priorities that support and enable the procurement function are outlined below.

Market risk and contingency planning

• Prepare Circular Economy Risk, Consequence and Contingency Plan (CERCC Plan) and a framework for Responsible Entity Risk,
  Consequence and Contingency Plans (RERCC Plans) for sector participants.
• This work assists in identifying potential risks for councils and ARV to consider within contract specifications and subsequent contract management practices.

Market intelligence

• Provide strategic market information for greater transparency and confidence for future investment, with a view to enabling stronger
  circular economy opportunities and interventions.
• This intelligence can support procurement planning and help identify opportunities for procurement to enable stronger circular
  economy opportunities.

Infrastructure planning

• Identify long term (30 year) infrastructure needs and protections and provide a more certain investment environment to support sector resilience and growth through the Victorian Recycling Infrastructure Plan (VRIP).
• This planning can inform the potential for procurement approaches to support local infrastructure investment, local circularity and service resilience.

Service standards

• Develop, implement and monitor compliance with the service standard for household waste, recycling and resource recovery services.
• These will guide councils and ARV in procuring services and inform the support provided by Recycling Victoria under this framework.

Engagement and consultative committees

• Engaging councils and alpine resorts, industry, and place-based stakeholders and advise the Minister and Head, Recycling Victoria of priorities and issues.
• Regular engagement with stakeholders will help Recycling Victoria effectively focus our procurement support where it is of most value.

Strategic procurement support

Under s57 of the CE Act, Recycling Victoria may provide information and support to councils and ARV. The form that may take varies at different stages of a procurement. In the initial stages of a procurement process, Recycling Victoria can provide strategic information and guidance to assist councils and ARV to establish their procurement needs and opportunities, and the procurement options available to them. In the later stages, Recycling Victoria can provide example documentation and advice on its use, and host forums to share experiences and knowledge.

As a state-wide organisation, Recycling Victoria can help by encouraging the use of consistent contractual documentation and expectations from procurement processes. Adopting a consistent approach to documentation can improve suppliers’ tendering capability and capacity. This in turn can improve procurement process efficiency and provide greater knowledge and certainty that future commercial contracts will align with Victorian Government policy objectives and required compliance standards.

The table below outlines each stage of a procurement process and identifies opportunities where Recycling Victoria may provide support.

Table 1: Potential role for Recycling Victoria in standard procurement stages¹

^{1 Sourced from Victorian Local Government Best Practice Procurement Guidelines 2013, in conjunction with Collaborative Procurement Guidelines for Regional Waste and Resource Recovery Groups 2015.}

General information and advice, guidance and guidelines

Under s57 of the CE Act, Recycling Victoria may provide councils or ARV with procurement ‘advice and support’. Table 1 sets out the advice and support Recycling Victoria may provide to inform procurement. This may include general strategic procurement information, advice or guidance. It could be case studies, lessons learned or specific resources such as template tender / contract clauses. It could be provided directly to councils and ARV or published on the Recycling Victoria website.

In addition to advice and support provided under s57 of the CE Act, there may be some matters that would benefit from more formal guidelines. Under s58 of the CE Act, Recycling Victoria may issue guidelines relating to the procurement of waste, recycling and resource recovery services.

Any guidelines prepared under s58 will target the areas of most need and that can deliver strategic outcomes for most councils and alpine resorts.

While it is not mandatory for councils to follow guidelines published under s58, the CE Act requires that councils and ARV that are subject to guidelines must have regard to them. Recycling Victoria will make clear what formal guidelines are issued under s58 of the CE Act.

Collaborative procurement

By working collaboratively to procure services, councils and ARV can offer larger, aggregated volumes of materials to the market. Enabling economies of scale through large scale material volumes can not only deliver better value service solutions for councils and ARV, but can also provide certainty of secure, long-term feedstock to allow industry to investigate large scale infrastructure investment and ensure long term viability.

There may be state significant circumstances where collaborative procurement processes undertaken by councils and ARV would benefit from specific support by Recycling Victoria to ensure sector stability and service continuity or would significantly support the development of a circular economy. Under s56 of the CE Act, Recycling Victoria may enter into a written agreement with a council or ARV on the process, requirements, conditions or standards of a procurement.

Such cases would be determined with councils and ARV and would require approval from the Head, Recycling Victoria. A risk management plan would be required in these circumstances, along with an endorsed probity management plan overseen by an independent probity advisor. This is to ensure Recycling Victoria’s involvement will not give rise to unmanageable actual or perceived conflicts of interest. An agreement on resourcing and/or funding models would also be required between the parties.

Importantly, this specific form of assistance would not extend beyond Recycling Victoria’s role of providing councils and ARV with procurement advice and support, as set out in s57 of the CE Act. Under no circumstances can Recycling Victoria take an active role in any procurement process that would result in engaging with suppliers/potential suppliers.

Out of scope support

The primary role of Recycling Victoria under the CE Act is to provide councils and alpine resorts with advice, support, and guidance to assist them with best practice procurement and contract management of their waste, recycling, or resource recovery services. The following activities sit outside of this legislative function so are not part of Recycling Victoria’s role.

• Be a party to any formal agreements resulting from procurement processes.
• Direct the tender process.
• Act as the sponsor or facilitator of a tender process.
• Establish any panel contracts for use by councils and ARV.
• Enter into waste management contracts on behalf of, or with, councils and ARV.
• Act as an agent to manage a waste, recycling or resource recovery service contract.
• Act as an advisor or participate as a scoring/ voting tender evaluation panel member.
• Prepare or present tender evaluation recommendation reports.

Prioritising our support activities

Recycling Victoria will focus on support activities that can help councils and ARV to deliver the most strategic benefits.

The range of potential support activities Recycling Victoria may provide under the Framework are set out in Table 1 above. This includes:

• developing resources, tools and guidance
• facilitating knowledge sharing
• providing council and ARV with information and advice.

To maximise the potential benefits, it is important that Recycling Victoria can effectively prioritise the support we provide.

Engagement to identify needs and opportunities

Recycling Victoria will engage with key stakeholders, including councils and ARV, to help identify support activities that would be of most benefit.

Engagement can also inform the timing for support activities to maximise their impact, based on the timing of planned procurement activity by councils and ARV.

Prioritisation and strategic alignment

So that Recycling Victoria prioritises the opportunities most likely to deliver tangible outcomes, the following criteria will be applied to the support activities identified:

• Potential to divert recoverable materials from landfill and promote circularity.
• Potential to stimulate infrastructure investment and improve regional circularity.
• Potential to increase the quality, reliability and resilience of services.

Recycling Victoria will also ensure support activities are aligned with the objectives in our Strategic Plan, relevant market research and analysis, policies and Recycling Victoria publications. We will prioritise support activities that:

• support compliance with relevant service standards
• assist in the implementation of the VRIP
• address a shortfall in the achievement of state-wide policy targets
• mitigate the potential of future market failure where there is the high potential for this.

Guiding principles and policy

Recycling Victoria will support procurement where there is a process of open tendering and where, under s59 of the CE Act, the Head, Recycling Victoria determines that the procurement process will be:

• as streamlined as possible
• transparent, fair and provide accountability.

The Head, Recycling Victoria must also be satisfied that the process will result in the provision of waste, recycling or resource recovery services that:

• are consistent, high quality and localised
• provide value for money and efficient use of resources
• can continually improve.

Relevant policies and requirements must also be considered, including:

• Victorian Government Purchasing Board
• Victorian Local Government Best Practice Procurement Guidelines 2024
• Australian Competition & Consumer Commission application
• Social Procurement Framework
• Local Jobs First Policy
• Public Construction Policy.

Victorian Government Purchasing Board (VGPB) policies

The VGPB sets the policies that govern procurement of non-construction goods and services across all Victorian departments and some entities. See Table 2 below for relevant VGPB policies.

While the VGPB policies do not apply to local government, they do apply to ARV and are considered best practice. There is also strong alignment of VGPB policies with the Victorian Local Government Act 2020.

Recycling Victoria will consider both VGPB policies and the Victorian Local Government Act 2020 in our model documentation and procurement approaches. Compliance with individual council procurement policies and any other local procurement policies will be the responsibility of the respective council or alpine resort.

Table 2: VGPB Policies

For a more detailed review, please visit the Victorian Government Purchasing Board webpage.

Victorian Local Government Best Practice Procurement Guidelines 2024

The Victorian Local Government Best Practice Procurement Guidelines (the Guidelines) provide a set of principles and practices that represent the most efficient and prudent course of action for councils in developing and maintaining their legislated procurement policies.

The Guidelines have been updated to address current best practices and the changed requirements for procurement under s108 and s109 of the Victorian Local Government Act 2020.

Australian Competition and Consumer Commission (ACCC) application

ACCC authorisation is necessary if the proposed conduct would, or might, breach the competition provisions of the Competition and Consumer Act 2010 (CCA). The types of conduct or arrangements the ACCC is often asked to authorise include:

• collective bargaining
• some (but not all) codes of conduct
• industry levies
• certain joint ventures or alliances.

Under the CCA, councils and ARV are considered competitors for the acquisition of waste, recycling and resource recovery services. Therefore, councils and/ or ARV participating in a collaborative procurement may be restricting competition. To remove the risk of legal action, the participants to the procurement may need to seek ACCC authorisation before entering any contracts, arrangements or understandings that may breach the CCA.

An interim approval can take 8 weeks, and a final authorisation can take up to 6 months.

Social Procurement Framework

The Social Procurement Framework (SPF) governs how the Victorian Government undertakes social procurement.

Social procurement is when organisations use their buying power to generate social and sustainable value above and beyond the value of the goods, services, or construction being procured. The level of social procurement planning that must be undertaken depends on the value of each procurement activity.

Local Jobs First Policy

The Victorian Government Local Jobs First Policy supports Victorian businesses and workers by ensuring that small and medium size enterprises are given a full and fair opportunity to compete for government contracts, helping to create opportunities including for apprentices, trainees and cadets.

Public Construction Policy

The Ministerial Directions and Instructions for Public Construction apply when undertaking public construction procurement.

Public construction is defined as:

• processes and requirements that apply to engaging suppliers to perform works or construction services
• the terms of engagement and contracts used to engage suppliers performing works or construction services
• management of engagements for works or construction services and reporting on how suppliers perform when engaged to deliver works or construction services.

Where a procurement is classed as public construction, the mandatory requirements in compliance with the Ministerial Directions issued by the Department of Treasury and Finance under the Project Development and Construction Act 1994 will be applied. These will apply to both councils and ARV.

Consultation on the Draft Strategic Procurement Framework

The framework has been informed by consultation with key stakeholders, including public consultation on the draft framework, using the Engage Victoria platform, between 12 August and 20 September 2024. Find out more by viewing our consultation summary report.