4.  PPP as a Procurement Option

All public infrastructure projects with a Total Estimated Investment (TEI) in capital goods over $50 million, are required to evaluate a PPP as a potential procurement method with regard to the value for money drivers, when conducting a procurement options analysis and seeking government approval for a project. The capital threshold may be triggered by bundling projects together.

There is opportunity to use the key commercial principles and performance incentives in the PPP model while tailoring the procurement process for smaller scale projects. Procuring Agencies should consider projects of a smaller scale for PPP delivery where they exhibit sufficient value for money drivers. The Department of Treasury and Finance (DTF) is currently identifying pilot projects and developing commercial principles to support smaller scale procurement using a streamlined PPP model. Procuring Agencies should consult with DTF where a potential smaller scale PPP project is identified.

The procurement options analysis is to be done in accordance with the National PPP Guidelines Procurement Options Analysis, and Victorian guidelines such as the Investment Lifecycle and High Value High Risk Prove and Procure Guidelines.