Introduction                                                                                                                                                                                                          
This policy outlines the requirements for establishing a governance framework to monitor and manage procurement across Ballarat Health Services.

The Procurement Governance policy has three components:

• Procurement Government Framework – establishes the processes, authorities, accountabilities and relationships for Ballarat Health Services to manage an efficient and effective procurement function.
  
• Procurement Compliance – outlines the role of Ballarat Health Services to ensure compliance with Health Purchasing Policies.
  
• Procurement Complaints Management – establishes how complaints or a concern raised by a supplier is managed in relation to the process and probity applied by Ballarat Health Services when carrying out a procurement activity.

The Procurement Governance policy applies to the entire procurement process model as defined in the illustration. Refer to Appendix 1

1.              Procurement Governance

The Chief Executive Officer (CEO) of Ballarat Health Services is accountable to Health Purchasing Victoria (HPV) for ensuring that all procurement activities comply with HPV policies and directives that are made in accordance with s134 of the Health Services Act 1988. The CEO is responsible for establishing and implementing Ballarat Health Services procurement governance framework and must ensure that this is implemented prior to any procurement activity being undertaken.

The CEO must establish the role of Chief Procurement Officer (CPO) that has visibility and oversight of the entire non-salary spend profile of the health service. This includes, but is not limited to, consumable supplies including prostheses and pharmaceuticals, capital equipment, information technology supplies and services, engineering, facilities management and support services, and professional / clinical services.

The CPO, or a senior executive assigned to this role, must:

• Hold a qualification in procurement or hold qualifications with a definable procurement component; or
  
• Have experience and expertise in managing a procurement function (or have access to procurement expertise and advice) that matches the health service’s procurement profile.

As such the CEO has nominated the Executive Director Corporate Services as the Chief Procurement Officer (CPO) for Ballarat Health Services.

The CEO must ensure that:

On an annual basis that the procurement strategy and its associated components, are aligned with the procurement profile of Ballarat Health Services and that it is aligned with HPV objectives.

CPO Responsibilities

The CPO is responsible for providing expert advice and guidance to the CEO and the Ballarat Health Services Board, on matters related to the procurement governance framework and any strategic procurement initiatives.

The CPO must:

• Endorse major procurement categories.
  
• Oversee the development, application and on-going assessment of the governance framework for approval by the CEO or the Ballarat Health Services Board, including:
  • Assessing the capability of Ballarat Health Services and develop plans to improve capability to ensure it is appropriate for the scope, nature and complexity of the procurement activity carried out by Ballarat Health Services.
  • Identifying major procurement categories for Ballarat Health Services. and
  • Reviewing performance in procurement and capability at regular intervals and report annually to the CEO or Board.
    
• Ensure that all procurement activity applies strategies, policies, procedures, practices and probity that comply with Health Purchasing Policies and any other requirements on the Health Services Act 1988 or directed by the CEO/Board through the instrument of delegation.
  
• Ensure that the complaints management and reference group establishment process demonstrates due process and integrity.
  
• Develop a procurement strategy for Ballarat Health Services.

Governance Framework

The governance framework is underpinned by a procurement strategy for Ballarat Health Services. This strategy provides an overview of the organisation’s procurement profile and includes the following components:

• Procurement Activity Plan which documents Ballarat Health Services procurement strategy at both an organisational level and individual procurement level;
  
• Contract Management Strategy that provides a framework, based on the spend profile of Ballarat Health Services, for how procurement categories and individual procurement will be managed at the contractual stage;
  
• Supplier Engagement Plan that documents all the processes, systems and communication strategies to maintain good relationships with existing and prospective suppliers; and
  
• Procurement Capability Plan that identifies the steps to be taken to improve capability with Ballarat Health Services to be able to undertake all procurement needs of the entity.

Ballarat Health Services standard procurement documents must be used, and approval process followed, for all procurement operations within Ballarat Health Services.

The CPO must ensure:

• Contract Management is conducted in a manner appropriate to the risk and complexity of the procurement activity, with appropriate record keeping and monitoring mechanisms;
  
• Collective Purchasing (complying with HPV collective purchasing agreements, reporting compliances and assisting with identification of aggregations opportunities);
  
• A Ballarat Health Services Purchase Order is issued to suppliers and contractors when goods and services are being purchased;
  
• Keep an appropriate record of contracts on a contracts register;
  
• Monitor contracts to ensure that key events are managed effectively including:
  • The contract expiry date, by initiating the necessary procurement action well in advance of expiry;
  • That timely decisions are made with regard to any contract options available;
  • The expiry date of insurance or other relevant certificates and that new certificates are obtained prior to expiry.

Procurement Activity Plan

The procurement activity plan details planned procurement activity for at least the next 12-18 month period. The activity plan must be reviewed at least annually to keep the market informed of changes or developments. A high-level summary plan must be published on the health service website to improve transparency for suppliers.

Contract Management Strategy

A contract management strategy defines upfront how procurement categories and individual procurement activities will be managed at the contractual stage based on their complexity level. It is a high level document that forms part of Ballarat Health Services procurement strategy.

Supplier Engagement Plan

A supplier engagement plan documents the processes, systems and communication approaches which ensure the highest level of trust and accountability in all dealings with suppliers. It encompasses keeping the market in formed about supply opportunities, managing supplier relationships during the procurement process, and managing complaints and debriefs. Providing timely, accurate and relevant information to the market is central to maintaining a positive view of government and supporting supplier participation in the government market.

Procurement Capability Plan

The identification of capability development initiatives within Ballarat Health Services procurement strategy and procurement activity plan will assist in appropriate decision making and prioritisation. It will support specific initiatives that will be undertaken to improve Ballarat Health Services procurement policies, procedures, processes and systems that enable the effective administration of the procurement function and to driving continuous improvement. This will also assist in determining what plans and programs are to be established to assist with training, recruitment, professional development, and retention of staff skilled in procurement.

Evaluation and Compliance of Procurement Activity

Ballarat Health Services is required to submit formal compliance and other reports to HPV to assist HPV in its role of ensuring probity and implementing and reviewing policies and practices to promote best value in health sector procurement.

The HPV Board in accordance with the Health Services Act 1988 may request that the CEO audit compliance with purchasing policies and HPV directions and provide an audit report to the HPV Board.

HPV may conduct an audit, or require Ballarat Health Services to undertake an audit of the health services procurement policies and /or practices, to evaluate the effectiveness of the Health Purchasing Policies or the implementation of those policies by Ballarat Health Services.

Ballarat Health Services will be notified by HPV at least 12-24 months in advance of its specific requirements in regard to reporting which will, at a minimum, include:

• An annual report on health services’ compliance with HPV purchasing policies. As part of this review, the HPV Board can at any time request a review of any mandated health service’s procurement policy, strategy and component parts of its procurement process;
  
• An annual report on Ballarat Health Services compliance with HPV collective agreements in accordance with the HPV Collective Purchasing Policy;
  
• Details of Ballarat Health Services Procurement Activity Plan; and
  
• Contracts in place, entered into or varied, including details of their total value and the details of contracted suppliers.

The compliance report/audit report must be endorsed and submitted to the HPV Board by the CEO annually.

2.              Procurement Complaints Management

A procurement complaint is an issue or concern expressed by a supplier in relation to the procurement process and probity applied by Ballarat Health Service when carrying out a procurement activity. The complaint should be a letter, email or fax lodged with the CEO or CPO.

The Complaints Policy sets out the process and procedures for addressing complaints and has been implemented to ensure that the procurement complaints are treated fairly and in a timely manner. The Complaints Policy outlines:

• How an investigation into a complaint will be conducted;
  
• What documentation Ballarat Health Services requires from the complainant in terms of scope and format;
  
• Contact and lodgement details for all documents;
  
• Time lines for conducting the investigation and providing a response;
  
• The range of outcomes available to Ballarat Health Services in responding to a complaint;
  
• The escalation process for a review by HPV, should the findings and actions taken by Ballarat Health Services not resolve the matter to the satisfaction of the complainant;
  
• Details other government bodies that may be able to assist; and
  
• Records of all procurement complaints will be maintained by the CPO (or their delegate) on the Procurement Complaints Register.

Ballarat Health Services is to inform the HPV Board within five working days of an complaint that could not be resolved to the satisfaction of both parties.

Ballarat Health Services must disclose in its annual report to HPV the following information in relation to each complaint received:

• Procurement activity to which the complaint relates;
  
• status of the complaint confirming:
  • Whether the complaint was resolved;
  • Whether it is still under investigation; or
  • Whether it could not be resolved.

A complainant can refer a complaint to the HPV Board for review if they are not satisfied with the findings and actions of Ballarat Health Services. This could be related to the management of the complaint or the application of the Health Purchasing Policies.

Complaints submitted to the HPV Board must be lodged by letter, email or fax within 10 working days of the receipt of the findings by the organisation to:

The Chair

HPV Board
Health Purchasing Victoria
Level 34, 2 Lonsdale Street
Melbourne Victoria 3000

The complainant must provide the following material:

• Evidence that Ballarat Health Services did not correctly apply Health Purchasing Policies in relation to a procurement activity;
  
• Evidence that Ballarat Health Services complaints management procedures were not applied correctly;
  
• A copy of all relevant correspondence between the complainant and Ballarat Health Services in relation to the nature of the complaint; and
  
• Any additional material requested by the HPV Board to assist in the findings.

The HPV Board:

• Will inform Ballarat Health Services and complainant of its findings and any further action it intends to take in relation to the matter;
  
• Can require the CEO to audit its application of the Health Purchasing Policies in relation to the procurement activity;
  
• Can inform the Minister of Health of its review of a complaint and advise the Minister of further action that could be taken; and
  
• May note the outcome of a review in relation to any complaint in its annual report to Parliament.

Evaluation

Ballarat Health Services is to ensure that this policy and all other related policies are to be reviewed on an annual basis or as required in accordance with its Governance guidelines.