Chapter 10: Purchasing and Asset Management

Whole-of-Government Purchasing and Asset Management

Coordinated Procurement Contracting

Finance has established a framework to coordinate the procurement of particular goods and services in common use across FMA Act agencies. Coordinated procurement contracting aims to deliver efficiencies and savings, aggregating government purchasing to obtain better pricing and improve value for money. It reduces the cost and duplication of procurement practices for both agencies and industry.

Finance is responsible for Australian Government procurement policy and has a lead role in coordinated procurement contracting. For further details of the department’s activities in this area see Chapter 5: Outcome 2, Improved and More Efficient Government Operations.

Government Advertising

On 2 July 2008, the government publicly released the Guidelines on Campaign Advertising by Australian Government departments and agencies that had come into effect on 27 June 2008. On 1 September 2008, the government introduced a new campaign advertising framework to support the guidelines and improve accountability and transparency in campaign advertising. The framework promotes value for money by providing a whole-of-government perspective and a degree of coordination across the various advertising campaigns undertaken by agencies.

The Interdepartmental Committee on Communications, a committee of Australian Government officials at the Deputy Secretary level, supports the application of the framework. Finance provides secretariat services for this committee.

Asset Management

Finance manages the government’s non-Defence domestic property portfolio. The portfolio includes eighty-five properties with a fair value of approximately $1.05 billion at 30 June 2009.

United Group Process Solutions Pty Ltd (United) assists Finance to manage these properties through a property management contract. Asset plans for individual properties (which are revised annually) help the department to manage the portfolio. In developing these plans, Finance incorporates information from property inspections, condition audits, tenant surveys, valuation reports and other independent advice from United or other private sector advisers.

Performance indicators for Finance’s management of the domestic property portfolio are included under Output 2.2.1: Property Management, detailed in Chapter 5 of this report.

Motor Vehicle Fleet Arrangements

Finance has a contract with LeasePlan Australia Ltd (LeasePlan) that governs the vehicle fleet arrangements for Australian Government agencies subject to the FMA Act. The contract commenced on 1 February 2004 and has a term of six years with a three-year option to extend. On 11 February 2009, following consultation with affected agencies, Finance announced that it had executed a deed that takes up the option to extend. The contract is now scheduled to expire on 31 January 2013.

Finance monitors and reviews LeasePlan’s services to ensure that they are provided in accordance with the contract. Finance also works with agencies to ensure they have an appropriate level of awareness about contract management and fleet management issues.

In addition, Finance manages vehicle supply arrangements with Ford, Holden and Toyota, consistent with the government’s policy of sourcing vehicles from manufacturers that have a local vehicle assembly and component production operation. Agencies make their vehicle selections within this purchasing framework, having regard for value for money, safety, environmental benefit and operational suitability.

A per-vehicle administration fee, paid by participating agencies, funds Finance’s contract management services. During 2008-09, Finance received fees totalling $750,000 from participating agencies.

At 30 June 2009, there were 104 agencies participating in the arrangement with 8,358 commercial and passenger vehicles leased and managed under the contract. In addition, Finance manages a fleet of 6,044 non-military vehicles operated by the Department of Defence. The total value of all vehicles was approximately $411 million.

The government has a policy that encourages Commonwealth vehicle users to purchase ethanol blended fuel (E10) where possible. Since the policy commenced, the government fleet’s monthly consumption of E10 has increased from 2,000 litres in October 2005 to 249,170 litres during June 2009. Over the past twelve months, consumption of E10 has increased by 11 per cent and now represents approximately 25 per cent of total fleet unleaded fuel consumption.

Top of Page