Pricing, procuring and contracting human services
An overview of DCJ’s standard practices for engaging service providers to deliver human services that meet the needs of individuals, families and communities in NSW.
How we price service delivery
DCJ, not the market, sets the price for most of its funded 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 take into account 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.