Pricing and procuring

How we price service delivery

DCJ, not the market, sets the price for most of its human services' programs. This enables a more straightforward, transparent and equitable approach to funding, and:

• avoids service providers proposing to deliver services at lower prices, which may introduce risk to either the quality of their service delivery or viability of their organisations
• reduces the risk of unanticipated factors influencing the cost of services. For example, an increase to wage levels, or changes in government policy settings. In these circumstances, we have the option of increasing the service price or decreasing the volume of services to be delivered to relieve pressure on service providers

What’s more, without the influence of price comparisons, we can focus on the quality of service delivery when evaluating proposals and tenders.

We analyse multiple factors to determine the cost of services. These include expectations of staffing levels, known staffing costs, service level intensity, geographical location and spread, and establishment and operating costs (including rent, utilities, administration, insurance, accounting and legal expenses). We also consider increases to the cost of delivering services over the term of the contract.

However, in some situations DCJ wants the market to set the price. For example, when:

• developing new and complex programs aimed at delivering innovative service solutions
• the market is not established or known
• service providers are requested to offer assets as part of a service offering.

How we procure services

DCJ is an accredited government procurement agency under the Public Works and Procurement Act 1912. We are bound by that Act, as well as the NSW Government Procurement Policy Framework and its associated Supplier Code of Conduct made by the NSW Procurement Board exercising functions under that Act.

We conduct our procurement activities in line with the NSW Government Procurement Policy Framework and within legislated procurement limits. This means we follow robust processes that:

• ensure our procurement activities deliver best value for money
• operate with probity, transparency and fairness
• above all, deliver desirable outcomes for clients and communities.

DCJ uses several procurement methods across its funded programs. The most commonly used methods include:

• open tender – a  funding opportunity is advertised and open to any eligible service provider to apply for
• select tender – a limited number of prospective service providers are invited to submit a proposal in response to specified criteria
• single invited proposal – one prospective service provider is approached.

We decide the most efficient method to use given the specific circumstances of the service to be funded, considering:

• the nature and complexity of the services to be procured
• the diversity of client and community needs
• the size of the market; that is, the number of service providers with the capacity and capability to deliver the outcomes being procured
• the number of service providers that may be interested in providing the services
• our knowledge of markets in the applicable geographic locations
• the value of the contract and level of program funding
• the length of the contract’s term.

Not-for-profit and for-profit organisations

DCJ's preference is to contract not-for-profit (NFP) organisations including, but not limited to, those registered with the Australian Charities and Not-for-profit Commission (ACNC). NFPs do not operate for profit, personal gain or other benefit of particular people. Driven by ‘community purpose’, their operating objectives align with DCJ’s objectives of prioritising use of program funds to deliver outcomes for clients and communities.

In some limited circumstances, we may engage private or for-profit providers to deliver specialised and professional services that are not available from NFP organisations. We may also engage other government agencies where they are identified as the most appropriate service provider.

In addition, our strong preference is for contracted service providers to use NFPs when seeking to subcontract any part or all of the services. Where a subcontracted party is not an NFP, DCJ expects the service provider will be able to demonstrate why an NFP was not proposed.

Aboriginal procurement

DCJ is committed to working in partnership with Aboriginal communities, providers and key stakeholders to build an Aboriginal human services sector that is viable and delivers desirable outcomes for Aboriginal children, families, and communities.

We operate in line with the NSW Government’s Aboriginal Procurement Policy which aims to create opportunities for Aboriginal owned businesses and employment opportunities for Aboriginal people.

Our procurement processes involve:

• identifying and developing Aboriginal service providers
• exploring what opportunities exist to support employment for Aboriginal people
• considering whether potential service providers are culturally competent and can meet the needs of Aboriginal clients and communities
• determining what strengths, needs and opportunities are identified through engagement with Aboriginal clients and communities.