Value for money

Last updated
04 February 2021

You must ensure that any public resources you claim or expenses you incur in relation to the conduct of your parliamentary business provide value for money, taking into account the need to conduct your parliamentary business.

Value for money requires consideration of both financial and non-financial costs and benefits. It focuses on which expense, allowance or public resource is needed to achieve the required outcome, while ensuring that public money is used:

  • efficiently: obtaining maximum value from the resource 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: achieving the required outcome while avoiding waste and minimising cost.

If you contravene this obligation in relation to a claim, the claim may be rejected or have to be repaid, and a penalty loading of 25% may be applicable.

Public resources determined by the Minister

For public resources which the Minister determines that 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 your need to conduct your parliamentary business.

In addition, you must consider value for money before making an application to the Minister for public resources. To the extent you have discretion in the provision or use of resources which the Minister determines are to be provided to you, your obligation to ensure value for money continues to apply.

Resource providers you must use and Commonwealth contracted providers

The Minister may determine that you must use a preferred provider in relation to providing, or arranging the provision of, your public resources, such as Constituent Relationship Management (CRM) software, and the travel and accommodation booking service provider (currently FCm). However, the relevant administrator (MaPS or the Independent Parliamentary Expenses Authority (IPEA)) has a discretion to pay your claim if you did not use the preferred provider if considered appropriate – for example, where a travel booking cannot be made through the preferred provider due to urgency or availability.

The Commonwealth may facilitate your access to particular goods and services via an agreement with a Commonwealth contracted provider, should you choose to access that provider’s services - for example, office stationery and supplies. Commonwealth contracted providers are 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, it is expected you would compare these with items available through the contracted service provider.

Things to consider when assessing value for money

Before undertaking an activity that may result in a claim, you should consider:

Need:

  • Is there a genuine parliamentary business requirement for the expenditure or claim?
  • In what other ways could the need be met?

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, servicing, maintenance, training and support, running costs, disposal costs)
    • reasonableness given community expectations.

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?

Procurement method:

  • The procurement method should be proportionate to the scale, scope and risk of the required outcome. The larger the expected value of the expense, the higher the expectation that appropriate steps have been taken (such as obtaining multiple quotes) to establish that the goods or services meet the need and represent value for money, and there is written evidence available to support this.
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