Procurement reform saves council funds

Five local councils have made savings over current contract costs through a collaborative procurement project coordinated by the Victorian Government.

The Procurement in Practice project conducted through the Local Government Reform Fund from Local Government Victoria has seen new contracts deliver savings when compared to current contract prices.

These contracts include contracts for bituminous road resealing works in Ararat Rural City Council, Ballarat City Council, Golden Plains Shire Council, Hepburn Shire Council, and Pyrenees Shire Council.

According to the Victorian Government, the annual savings delivered make up $630000.

Minister for Local Government, Jeanette Powell said the five councils were able to drive down the costs of laying bitumen roads and make considerable savings for their ratepayers.

Ms Powell said the councils did this by “joining forces and using their collective purchasing power”.

“In the past year, my department has worked closely with these five councils to combine their bituminous road resealing expenditure which currently is in excess of $4.6 million a year,” Ms Powell said

She said each council has now resolved to enter into a three year contract with two, one year extension options, with the one recommended supplier.

“If all five councils elect to take up the contract option for extensions, the combined savings to the community will be in the order of $3.1 million dollars over the life of the contract,” she said.

According to Ms Powell, the outcomes from this project will encourage other councils across the state to consider working together in the procurement of large expenditure items.

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