This guide uses 3 scenarios to explain how to manage procurement-related conflicts of interest that may arise when people with in-demand skills and experience move between the private sector and the Victorian public service (VPS).
The guide can assist if you’re involved in:
The guide is explanatory only. It doesn’t alter any policy, process or code.
For example, you must still comply with the relevant Victorian Government Purchasing Board policies and public construction ministerial directions.
This guide applies to organisations in the Victorian public service (VPS). For example:
This means it will apply to you as an employee if you’re:
If you need more information after reading this guide, see:
As a VPS employee, you must be – and be seen to be – impartial in performing your public duties. This helps to maintain public trust and prevent corruption.
Always follow your organisation’s conflict of interest policy.
If you have a conflict of interest you must:
Always declare a conflict of interest, regardless of whether it is actual, potential or perceived. For details see step 2.
Your manager will develop a plan to address your conflict of interest based on the risk mitigation strategies in your organisation’s conflict of interest policy. The approach taken in the plan will be proportionate to the risk.
These strategies are likely to be similar to those in our conflict of interest model policy. You can see them in detail in step 3.
These are:
A VPS employee is involved in deciding who to award a contract to and their former employer is a prospective bidder.
It’s common for employees to move between the VPS and private sector during their careers. This exchange of skills and experience is beneficial for all parties. But it can lead to conflicts of interest that must be declared and managed.
As a VPS employee, you have a conflict of interest if:
The public could reasonably form the view that your relationship with your former employer may influence your work.
The employees most likely to be affected by this type of conflict of interest are those working in:
If your former employer is a prospective bidder, you need to declare a conflict of interest. Your manager will develop a conflict of interest management plan in consultation with you.
The plan will set out the restrictions to be put in place to manage your conflict of interest.
This may include you not being involved in:
The management plan will usually remove you from taking part in deciding or approving who is awarded the contract.
This means you can’t discuss the bids, provide advice or comment on the bids – even unofficially – or take part in any process to award the contract.
The risk level will determine whether or not you can take part in other parts of the procurement process.
The management plan will consider risk factors such as:
Your organisation should have a framework to assess these risks.
A government department has appointed Anna as the new deputy secretary heading up a division.
Prior to her current role, Anna was a partner in a nationwide consulting firm.
Anna wants to commission a strategic review of her division. A procurement process will need to occur.
It’s likely Anna’s previous consultancy firm will submit a bid.
Regardless of whether Anna would prefer the strategic review to be conducted by her previous firm, she has a conflict of interest.
The public could reasonably form the view that Anna’s relationship with her former employer may affect the integrity and probity of the procurement process.
Anna must declare a conflict of interest in writing.
Anna’s manager (the Secretary) will develop a management plan in consultation with Anna.
Or Anna’s manager could appoint another deputy secretary or another impartial third party (such as an independent probity adviser) to develop and oversee the plan. This person shouldn’t be a subordinate of Anna’s.
When developing the plan, Anna’s manager will consider the relevant factors. For example:
When the tender documentation is being developed, Anna:
If Anna’s former employer does not submit a bid, Anna can then become involved in the procurement process.
If Anna’s former employer submits a bid, she must also:
If an independent, impartial third party is appointed as a probity adviser, their role could be to provide probity advice on the procurement process. This could include overseeing:
A suitable person to appoint as probity adviser would be:
Whatever plan is in place, Anna must act impartially in the performance of her duties. As required by the code of conduct, Anna must not:
A prospective bidder has an external secondee embedded in the procurement process.
An external secondee is a person seconded from outside the public sector who is embedded in your organisation to work for a period of time.
This includes all secondees from the private sector, such as a consultant or advisor seconded from a private firm or an independent contractor. But excludes:
Sometimes, a VPS organisation seconds people from the private sector to work in the VPS as an external secondee.
For example, an organisation may source an external secondee from a professional services firm to assist in the delivery of a policy, project or program.
External secondees from professional services firms shouldn’t be engaged to undertake work identified as a universal and enduring public service function.
An external secondee has an ongoing loyalty to their home firm.
A home firm is the organisation an external secondee works at when they’re not on secondment. For example, if an external secondee is on secondment at a department but is employed by ‘XYZ Firm’, then XYZ Firm is their home firm.
A conflict of interest arises if a home firm is a prospective bidder to supply goods or services and has an external secondee embedded in:
This is because the public could reasonably form the view that the external secondee may influence the tender process.
The external secondee must declare a conflict of interest in writing.
This is a situation that the home firm should consider when it’s providing an employee as an external secondee to the VPS. Consider informing external agencies of this risk before the secondment is agreed to.
Any management plan needs to deal with the specific circumstances of a conflict of interest. You can’t make a management plan in advance, but you can try and prevent conflicts of interest from arising in the first place.
If you’re an external secondee with a conflict of interest, you need to:
When developing the plan, your manager will consider the relevant factors. For example:
All employees, including external secondees, are bound by your organisation’s conflict of interest policy and the code of conduct.
An external secondee must be impartial in the performance of their public duties. For example, they:
All external secondees whose home firm is a prospective bidder must be removed from any involvement in the design or approval of the tender documents.
This applies to all external secondees in:
Otherwise, it would be reasonable for members of the public to believe that the external secondee could influence the outcome of the design of the tender specifications.
If the home firm does not submit a bid, their external secondees can become involved in the procurement process from then on.
If a home firm submits a bid:
This is because it would be reasonable for members of the public to believe the external secondees involved in the procurement process will consciously or unconsciously influence the outcome of the bidding.
Examples of when it may not be in the public interest to exclude a home firm’s bid include:
Sometimes your organisation will have a pre-existing contract that requires you to engage the home firm, regardless of the presence of external secondees. It would still be highly advisable to appoint an independent probity adviser to manage the delivery of the contract.
In some circumstances, it will be highly advisable to appoint an independent internal or external probity adviser to oversee the procurement process, including:
Examples of when it will be highly advisable to appoint a probity adviser include:
If a home firm intends to submit a bid, it must declare a conflict of interest in its tender documentation.
When any bidder provides their tender documentation, it’s good practice for your organisation to check for conflicts of interest — even if none have been declared.
The check should include whether there are any external secondees embedded in the procurement process. If there are, check if their home firm is a bidder.
The requirement for a bidder to declare a conflict of interest is consistent with the invitation to supply template and the supplier code of conduct.
Clause 2.9(a) in the invitation to supply template sets out the rules for the procurement and states that:
Invitees must not, and must ensure that their Representatives do not, place themselves in a position that may give rise to an actual, potential or perceived conflict of interest between the interests of the State and the Invitee’s interests during the Invitation Process.
The Invitation to Supply template is in the process of being updated and changes will be reflected in this guide once the update is complete.
The request for tender conditions template sets out the rules for procurement. Section 12(a) covers probity and competitiveness, stating that:
By submitting a Tender, the Tenderer warrants that:
In section 18.1, the template defines associate as any officer, employee, seconded, agent, consultant, contractor, nominee, licensee, or advisor and in the case of a Tender includes:
The projects unit of your organisation is issuing a tender for the design and delivery of a large program. Most of the employees in the unit are external secondees from the same consulting firm.
Jo is an external secondee and would usually be involved in the procurement process through their role in the drafting of the tender documents. Jo’s home firm is a prospective bidder.
Each secondee in the project’s unit has a conflict of interest, including Jo.
The public could reasonably form the view that the external secondees’ presence in the unit may influence the procurement process to some degree. For example:
The external secondees should be reminded of their obligations under the code of conduct, including the impartiality requirements.
Jo must submit a conflict of interest declaration. Jo’s manager will develop a conflict of interest management plan for Jo, in consultation with them.
To minimise risk, each of the other external secondees could be asked to also declare a conflict of interest in writing.
When developing a plan, the manager will consider the relevant factors. For example:
Jo and the other secondees should be removed from any involvement in drafting or approving the tender specifications.
If this isn’t feasible (for example, due to Jo’s expertise in the project), Jo’s involvement should be restricted as far as practical.
Due to the presence of the external secondees in the immediate work area, it would be highly advisable to appoint an internal or external independent probity adviser to oversee the drafting and approval of the tender specifications.
Unless it’s not in the public interest to do so, the home firm must be removed from consideration if:
This applies even if the external secondees in the immediate work area aren’t involved in the procurement process. This is because their presence as members of the work team may bias the selection and approval of the procurement.
If the home firm’s bid is excluded, Jo and the other external secondees in the team can be involved in the procurement process from that point onwards.
If it isn’t in the public interest to exclude the home firm’s bid, Jo and the other secondees in the team must not be involved in deciding or approving the procurement.
If this isn’t feasible (for example, due to the number of external secondees involved), it’s highly advisable to appoint an internal or external independent probity adviser to oversee the procurement process.
A financial delegate is responsible for signing off a procurement, but they have a conflict of interest.
Approval of the cost of procurement is a step in the procurement process.
Sometimes, the financial delegate will have a conflict of interest. For example, if they’re:
External secondees can only be financial delegates if they’re given the status of ‘employee by exemption’. This scenario is uncommon.
If a financial delegate is in either of these situations they must declare a conflict of interest. This is because it is reasonable for people to believe that:
The financial delegate’s manager should develop a conflict of interest management plan in consultation with them.
When developing the plan, the manager should consider the relevant factors. For example:
The usual strategy would be to:
Consider appointing an internal or external independent probity adviser (internal or external) to oversee the approval process.
Your organisation can consider implementing these good practices as a precaution for all procurements: