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Value for Money

Value for Money Test:

You must ensure that any public resources claimed or expenses incurred in relation to the conduct of your parliamentary business provide value for money: that is, the efficient, effective and economic use of public money, taking into account the need to conduct your parliamentary business (s5, 27 Parliamentary Business Resources Act 2017 (PBR Act)).

For public resources which the Minister determines the Commonwealth will provide to you (e.g. office accommodation and equipment), the Minister must ensure that the public resources provide value for money, taking into account the need to conduct your parliamentary business (s33 PBR Act). You must also consider value for money before making an application to the Minister.

On receipt of a claim, MaPS may request evidence or compliance information from you to determine whether the PBR Act has been complied with (s98, PBR Regulations). This may include the further information about how your claim meets the value for money test. The Commonwealth is not liable to pay an expense or provide a public resource where you contravene your obligation to ensure that the expense or public resource provide value for money (s29, PBR Act).

Value for money requires consideration of both financial and non-financial costs and benefits. It focusses on the expense, allowance or public resource needed to achieve the required outcome using public money:

  • efficiently – maximum value for the resource is achieved using a procurement method that is appropriate given the scale, scope and risk
  • effectively – the extent to which the required outcome is achieved, taking into account factors such as cost, quality and convenience
  • economically – achieves the required outcome while avoiding waste and minimising cost.

The Minister may determine (under s100 of the Parliamentary Business Resources Regulations 2017) that you must use a preferred provider in relation to providing, or arranging the provision of, your public resources, such as electorate office repairs. However, the relevant administrator (Ministerial and Parliamentary Services or the Independent Parliamentary Expenses Authority) has a discretion to pay if you did not use the preferred provider if considered appropriate – for example, where an office purchase or repair cannot be made through a preferred provider due to urgency or availability.

Additionally, the Commonwealth may facilitate your access to particular goods and services via an agreement with a preferred provider, should you choose to access that provider’s services (for example, office stationery and supplies). Such providers will be appointed after a competitive tender process, and will provide the required services according to contractual obligations.

In respect of office stationery and supplies, competitive quality and pricing according to contractual obligations is available for items supplied by the contracted service provider. You may purchase from another supplier, but in order to establish value for money for similar items of office stationery and supplies, comparison with items available through the contracted service provider would be expected.

When Assessing Value for Money You Should Consider:

  1. Needs assessment: Is there a genuine parliamentary business requirement for the expenditure or claim? In what other ways could the need be met?
  2. Efficient, effective and economical: Will the proposed expenditure or claim achieve what you require, and how will it do this? Is there a more economical method of achieving your outcome? Is this method of achieving your required outcome more beneficial than other methods? Are there unnecessary costs that may be avoided? This may include considerations such as: the potential supplier’s experience and performance history; ongoing support; energy efficiency and environmental impact; whole-of-life costs (including cost of additional features and consumables; service, maintenance, training and support, running costs, disposal costs); reasonableness given community expectations.
  3. Risks: What are the risks of not achieving your required outcome? Does the identity of the provider carry any real or perceived risk of a conflict of interest?
  4. Procurement method: The procurement method should be commensurate with the scale, scope and risk of the required outcome. The larger the expected value of the expense, the higher the expectations that appropriate steps have been taken to establish that the goods or services meet the need and represent value for money, and that there will be written evidence to support this.

Examples:

Examples:
  • Is the company or brand reliable? Does the provider have any financial or reputational issues?
  • Is the item more expensive but better quality and will last longer?
  • Is the printer paper environmentally friendly? Is it compatible with the printer?
  • Are you considering stockpiling items only because you have money left in your office budget?
  • Will the inclusion of maintenance and disposal costs in one provider’s quote result in a lower cost overall?
  • Is it better value for money to buy in bulk? Would your office use all the order?
  • Did you obtain quotes from more than one commercial printing business?
  • Is it more appropriate to print material in-house?

Last updated: 10 December 2019