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Policymaking, program, services and infrastructure delivery today is complex, with professional services and labour hire playing an important role in helping to realise government priorities.
The Government is committed to becoming more efficient in how it uses public resources to drive growth and development. Central to this commitment, is a cultural and strategic emphasis on secure employment, building capacity, and sharing resources, learnings and expertise across the Victorian Public Service (VPS).
The decision to seek external support to deliver government policies, projects and programs is often driven by the need for specialist or technical skills or additional capacity to ensure new initiatives are delivered in a timely and effective manner. This is particularly true in situations where specialist skills are in emerging or growth areas not yet available within the VPS, it is not efficient to resource from within the VPS, or in areas where there is high demand for talent and certain specialist skills.
Parameters and tools to guide decision making in relation to external engagements, supported by quality workforce capability planning and development, will help to reduce inappropriate use of professional services and labour hire.
Recognising that professional services and labour hire can play a legitimate role in the VPS and will continue to be needed to ensure delivery of government priorities, these guidelines and the Administrative Guidelines on Engaging Labour Hire in the Victorian Public Service offer a framework for the valid use of external engagements.
For detailed information about the policies that govern procurement in the Victorian Government more broadly, contact the Victorian Government Purchasing Board, or visit the Victorian Government Purchasing Board website, .
How the Guidelines work
The Administrative Guidelines on Engaging Professional Services in the VPS (the Guidelines) are circulated to public service bodies and entities under section 36A of the Public Administration Act 2004 (Vic) (the Act).
The purpose of these Guidelines is to provide decision making principles and practical guidance that supports public service bodies and entities to determine when the use of professional services is appropriate. These principles need to be included into organisation’s decision-making processes.
Scope of the Guidelines
Professional services describe the formal engagement by a public service body or entity of an individual or organisation to provide skills, expertise, knowledge or advice in the performance of work or services. This includes professional services that may be defined as ‘consultancies’ or ‘contractors’ under Financial Reporting Direction 22H.
In these Guidelines, professional services does not refer to personnel provided by a staffing services provider to perform labour or other services for the Government for a fee. These engagements are covered under labour hire services and are addressed in the Administrative Guidelines on Engagement Labour Hire in the Victorian Public Service.
All professional services that Government purchases are captured by these Guidelines including but not limited to professional services purchased through the Professional Advisory Services Panel, eServices Panel, Legal Services Panel, and Marketing Services Register.
Professional services engaged to undertake, service, or advise built environment and infrastructure work are exempt and therefore not captured by these Guidelines.
The Victorian Government Solicitors Office is considered an internal service provider and therefore these Guidelines do not apply to organisations seeking to engage their services.
Who the Guidelines apply to
These Guidelines apply to all government public service bodies and entities as defined in the Act, that are mandated to comply with VGPB policies.
The Guidelines do not apply to:
- special bodies as defined by section 6 of the Act
- exempt bodies as defined by section 4 of the Act
- to any government body established under the Inquires Act 2014 (Vic)
Principle One: Enduring public service functions
Professional services should not be engaged to undertake work identified as a universal and enduring public service function.
Enduring public service functions are defined as the work products and services that are intrinsic to the running of the public service and delivery of Government priorities.
The specific enduring public service functions will vary from one organisation to another due to their differing roles and functions. However, there are universal functions that should be resourced using public service employees as a first principle.
The universal and enduring public service functions include:
- policy and program development, implementation and evaluation
- business case development
- business strategy and organisational development
- external stakeholder/community engagement and facilitation
- internal meeting and event facilitation
These functions will be subject to regular review which may result in changes.
Secretary or equivalent approval is required before contracting delivery of services above. This authority may only be delegated to the responsible Deputy Secretary or equivalent if a valid engagement circumstance (principle two) can be demonstrated.
Principle Two: Valid engagement circumstances
Recognising that professional services can play a legitimate role in the VPS and will continue to be needed to ensure delivery of Government priorities, this principle offers a framework for the valid use of external engagements.
Professional services engagements should be limited to the following circumstances:
A. Work requiring skills or expertise not efficient to recruit or maintain within an organisation
To meet this condition, the following circumstances must apply:
- the necessary technical or specialist skill(s) required to deliver the work or services are not available or not efficient to maintain within an organisation
- current and future demand within the organisation for the technical or specialist skill(s) does not warrant recruiting the capability into the organisation
B. Need for genuine independence
Independence may be required to instil confidence in the objectiveness, impartiality, and integrity of Government work, services, or decision-making processes. In these circumstances, the type and level of independence required must be carefully considered, including the potential for another area of a department or Government to provide the services.
C. The engagement connects the VPS with the latest technical advances, emerging key skills or expertise and builds VPS capability
Initially these services may need to be delivered by an external provider, however over time it is expected that new technologies, specialist skillsets and/or ways of working will be able to be delivered by internal capacity.
Approval of external engagements must therefore be able to demonstrate a contractual obligation and clear project strategy for transferring relevant skills and knowledge across to the VPS from the professional services provider.
D. Work requiring capacity due to unpredictable demands that require immediate or time critical action.
The capacity condition is only applicable in circumstances that are characterised by unpredictable demands requiring immediate or time critical action, such as legal matters with court-imposed deadlines and urgency, or surge capacity required due to emergency management, or similarly critical events.
To meet this condition, the following circumstances must apply:
- the necessary capacity required to deliver the work or services is not available or not efficient to maintain within an organisation
- current and future demand within the organisation for the capacity do not warrant recruiting into the organisation
The capacity condition must not be used to bridge shortfalls in regular or foreseeable demand for internal capacity or capabilities.
How to apply these principles
Engaging professional services for universal and enduring functions
All requests to engage professional services for the universal and enduring functions of Government require approval from the Secretary or equivalent Head of a public service body.
This approval applies irrespective of:
- the value of the contract
- any panel arrangements
- whether the engagement is classified as ‘contractor’ or ‘consultant’ for the purposes of FRD 22H
This authority may be delegated to the responsible Deputy Secretary or equivalent if a valid engagement circumstance can be demonstrated.
All other professional service engagements
For all other professional service engagements that do not constitute a universal and enduring public service function, but for which one or more valid engagement circumstances (principle two) apply, then an organisation’s standard approval process applies.
If the valid engagement circumstances cannot be applied, Secretary or equivalent approval is required but can be delegated to the responsible Deputy Secretary or equivalent.
Scenario 1: Preparation of a business case for a new program
Division A is required to develop a business case to seek funding in the State Budget for a new program. Division A assesses the internal capability within the team and determines there is capacity but limited experience in developing business cases. Two staff members are provided with training. The business case is developed with the support of suitably experienced VPS staff within the Division’s department.
Scenario 2: Facilitation of a workshop with external stakeholders
Division B is seeking to work with industry stakeholders through a series of workshops over a two-month period to develop an industry action plan. Division B assesses the internal capability and determines that there are suitably qualified facilitators, but the skill set to design the engagement is not available. Division B decides to seek advice from within the department to help design the engagement rather than seek external support.
Scenario 3: Co-design of a new program to deliver services to the community
Division C is employing a co-design approach to create a program to deliver services with a range of partners. Developing programs is considered a universal and enduring public service but co-design is an emerging skill set within the VPS and not widely available.
Division C has not employed this approach before and seeks advice from a government co-design community of practice. It is determined that external support is the most appropriate action due to the scale of the program and partners involved and the lack of available public service employees suitably qualified.
Division C prepares an RFQ to engage professional services, seeking feedback from the co-design community of practice. The RFQ incorporates several mechanisms that aim to build co-design capability within the Division in the medium term through the contract. This includes supporting public service employees to facilitate workshops and involving members of Division C in designing the process.
Division C’s Secretary has delegated approval of all engagements that can demonstrate a valid engagement circumstance to the relevant Deputy Secretary. As such, an RFQ is directed to the responsible Deputy Secretary for approval.
Scenario 4: Evaluation of a program
Division D has implemented a new program that aims to reform service delivery. A program evaluation is needed to help determine whether the program has been successful and is likely to achieve the desired outcomes. Division D determines that independence from the Division is required to complete the evaluation.
In establishing the program, an evaluation framework was developed, and the Division has been collecting data throughout its implementation. As such, Division D determines that another area within the department or within the VPS would be able to complete the evaluation and issues a request for help through a range of channels.
Division D is unable to secure capacity within the VPS to undertake the evaluation and therefore determines external support is needed. As evaluation is a universal and enduring public service function and no valid engagement circumstance can be applied, Division D must seek Secretary approval to engage a professional service firm to complete the evaluation.
Scenario 5: Urgent legal advice
Division E requires urgent legal advice as a result of a court-imposed deadline. The nature of this work does not relate to a universal and enduring public service function. This type of legal advice is not required on a regular basis and would be not be efficient to retain in the VPS. As such, Division E seeks to engage professional services through the department’s standard approval process.
Additional information and resources on Victorian Government State Purchase Contracts
Departments and entities mandated to source through the State Purchase Contracts
State Purchase Contracts organised by category
Professional Advisory Services State Purchase Contract
User Guide - Professional Advisory Services State Purchase Contract
Marketing Services Panel
Legal Services Panel
Other procurement resources
Other procurement registers and supplier panels
Procurement complexity and capability assessment policy
Victorian Government Financial Management and Financial Reporting Directions
Financial Reporting Directions and guidance for Departments
Standing Directions 2018 under the Financial Management Act 1994
Authorisation and amendments
Authorised by the Secretary, Department of Premier and Cabinet Victoria, under section 36A(1) of the Public Administration Act 2004 (Vic).
Chris Eccles AO
Secretary, Department of Premier and Cabinet
Under section 36A(3) of the Public Administration Act 2004 (Vic), if a public service body or a public entity to which guidelines have been issued operates, or intends to operate, in a manner that is inconsistent with those guidelines, the relevant public service body Head or public entity Head must provide written reasons for doing so to the Secretary, Department of Premier and Cabinet.
Issued by the Department of Premier and Cabinet Victoria (DPC) in October 2019.
These Guidelines are subject to periodic amendments. DPC will provide notification when an update has taken place.
Reviewed 20 November 2019