Contingent Workforce Scheme

  • Mandatory
Date: 24 Jan 2013 - 28 Feb 2028
Updated: 3 Jun 2022
Managed: NSW Procurement Contact owner
Type: Whole of government
Scheme Number: SCM0007
Scope
The scheme covers the contingent workforce needs of NSW Government.

What's covered

Contingent labour is defined as a person who works for a buyer (for example, a government agency) but is paid by a supplier (a recruitment agency).

The contingent worker is not on the government’s payroll.

Why use this scheme

The scheme is mandatory under Procurement Board Direction PBD-2021-04 Approved procurement arrangements.

The Contingent Workforce Scheme:

  • has the advantage of not ‘locking-up’ a market, with new suppliers being able to register at any time
  • allows flexible arrangements, including adding new categories (buyers) and role types (suppliers)
  • reduces the professional indemnity and public liability insurance requirements of suppliers from $20 million to $5 million, other than transport where specific insurances apply.

The scheme encourages small and medium businesses (SMEs) to apply by allowing application by category and by region.

Benefits for suppliers

  • able to join the scheme at any time through a self-service, online application process
  • able to apply for business opportunities by regions and categories, and apply for additional categories if not all categories are awarded to them.

Benefits for buyers

  • access to a greater choice of suppliers including regional and SMEs
  • able to better leverage the available talent pool
  • access a supplier performance management framework which includes satisfaction reviews, invoicing accuracy, response times and system data collection requirements.

Contractor Central

Contractor Central is the whole-of-government vendor management system (VMS). Each government cluster has a dedicated contact for Contractor Central:

Managed service providers (MSPs)

Managed service providers source and manage contingent workers from suppliers on the scheme. MSPs work with suppliers in a vendor-neutral arrangement. They transact only via Contractor Central.

The Contingent Workforce MSP contract is performance-based. It incorporates the following service requirements:

  • functional and process requirements
  • key performance indicators
  • service level agreement
  • reporting
  • account management and service delivery
  • implementation
  • competitive pricing.

In line with the strategic objectives of this contract, MSPs must comply with the below at no additional cost:

  • use the VMS nominated by the principal
  • use of only prequalified suppliers under the scheme
  • cooperation with the CMOs nominated by the principal
  • vendor neutrality.

Pricing

The services outlined in the MSP contract constitute a standard offering and are priced accordingly.

The onboarding of an MSP will be undertaken by each customer by a separate request for quotation process or by direct appointment under a customer contract.

This gives the customer the ability to specify the level of involvement they require, modify the scope of services, include any specific management or reporting requirements and obtain best pricing for their requirements.

NSW Government objectives

NSW Government is implementing its contingent workforce strategy to achieve the following objectives:

  • introduce best practice services and systems to drive value
  • integrate contingent workforce with overall workforce planning
  • make government contingent pool(s) the primary candidate source
  • attract increased numbers of skilled candidates to NSW Government
  • enhance procurement processes and systems for more effective and efficient deployment of the contingent workforce
  • increase opportunities for participation by small and medium enterprises by reducing red tape
  • decrease the cost of the contingent workforce.

Four projects have been identified as part of a combined contingent workforce solution to enable delivery of the government's strategic objectives:

  • use of a VMS
  • a panel of MSPs
  • a shared contingent pool and Contractor Manager Organisation (CMO)/Payroll provider panel
  • a list of prequalified suppliers established under the scheme.

This solution is expected to deliver approximately $90 million in both hard and soft savings through efficiency gains in process, control, visibility, compliance, risk management, performance management and the improved quality of candidates presented to customer’s hiring managers.

Scheme expenditure report

Approved suppliers

To find the right suppliers for your needs, you can search the scheme supplier list.

If you’re logged in with your buyer account, you'll have full access to a supplier’s profile.

If you don't have a buyer account, it's quick to sign up. You just need to enter your email address and create a password.

How to engage staff under the scheme

Agencies can invite and assess supplier proposals using Contractor Central, eTendering or by contacting their preferred suppliers directly.

Agencies should use the customer order form and rate calculator for all engagements.

How we manage supplier performance

Supplier performance is managed via key performance indicators (KPIs). The KPIs are listed in the scheme rules.

NSW Procurement also conducts an annual survey to measure satisfaction levels among hiring managers.

Agencies are encouraged to resolve issues directly with suppliers. Where these can’t be resolved, they can escalate the issue to NSW Procurement.

Agencies can also submit a supplier performance report  DOCX, 56.32 KB for each engagement where the performance of or services provided by the supplier are considered to be unsatisfactory.

Tools, templates and resources

FAQs - general information

What job categories are covered under the scheme?

Information about the job categories and descriptions is available in the annexure 6 of the scheme rules PDF, 996.78 KB.

The categories for transport and education and disability care workers (other) are also available under the scheme.

Frontline staff (for example teachers, nurses) are excluded from the scheme.

There is flexibility within the scheme to expand or remove the categories and role types. Agencies are encouraged to advise NSW Procurement of any new job categories required.

What if the supplier I want to use is not on the scheme?

Agencies should encourage their preferred suppliers to apply online for the Contingent Workforce Scheme.

Is there a minimum or maximum period of hire?

It is generally accepted that the minimum period of hire is 4 hours, but this needs to be agreed with the supplier prior to engaging a contractor.

It is suggested that contractors are not engaged for longer than 6 months.

What if I want to extend or renew an order? What supplier margin should apply?

For assignments that are longer than 12 months (either via extension or original assignment, regardless of which prior contract/arrangement the contingent worker was placed under) - a maximum of 5.14% of contingent worker normal pay rate (normal time base rate plus superannuation) applies.

Payroll fees will be fixed at 5.14% of contingent worker normal time pay rate.

Contractors introduced to suppliers by agencies will attract the reduced fee of 5.14% of pay rate.

Can the supplier charge a fee for a contingent worker being converted to an employee under this scheme?

If the initial contingent worker engagement is terminated for convenience under clause 24.3 and the contingent worker commences employment with the customer within 12 months of the original start date of the initial engagement, the supplier will be entitled to charge the customer the following contingent-to-permanent placement fee:

  • 0-90 days: 7.05% of salary package
  • 91-180 days: 5.25% of salary package
  • 181-270 days: 3.50% of salary package
  • 271-365 days: 1.75% of salary package
  • More than 365 days: no fee

If the Contingent Worker engagement is terminated for breach under clause 24.2, or the contingent worker is a referred contingent worker, or the contingent worker engagement is terminated for convenience during an extension period, the supplier will not be entitled to payment of contingent-to-permanent placement fees.

View the Conversion fee Q&A PDF, 119.43 KB

Who is responsible for paying meals, overtime and travel costs?

Any additional conditions relating to the work assignment such as overtime, special hours or travel requirements should be included in the customer order form and rate calculator.

The supplier will invoice the agency for these agreed extras at cost.

FAQs- managed service providers (MSPs)

How do I engage an MSP?

An MSP should be engaged across the whole agency, not for smaller departments unless you are managing a large bulk recruitment exercise which you need support for.

Therefore it will be a decision that your HR or procurement areas need to manage for you. Contact them with your requirements.

How much does it cost the agency?

Each supplier has submitted their own pricing, which is dependent on the spend under management and the level of service your agency wants. You need to agree on the service level agreement (SLA) before a firm price can be agreed.

As a guide, it was a requirement that a maximum price of 2.5% of spend would apply. Pricing is based on a sliding scale discount: the larger your agency’s spend, the lower the percentage applied.

Separate pricing has been agreed for one-off bulk recruitment exercises. This pricing is a flat fee.

Talk to your procurement team for more information.

How much does it cost scheme suppliers?

There is no cost to scheme suppliers to work with the MSP.

What do I need to consider when engaging an MSP?

Ensure there is a collaborative relationship/partnership.

Roles and responsibilities need to be clearly defined from the onset.

The MSP needs to take the time to understand the hiring managers and promote the benefits of the solution.

The need to minimise leakage through transparency and robust reporting.

Ensure SLAs are firm and parties know exactly what is expected.

Ensure extensive stakeholder engagement throughout the entire process.

How long does it take for an MSP to implement the VMS?

The estimated timeframe is 90 days to implement the VMS however this depends on your level of readiness for the project.

The MSP will work through your discovery phase and will assist with embedding best practice workflows to drive efficiencies faster.

What does MSP vendor neutrality mean?

Vendor neutrality means that if your preferred MSP is also a supplier of contingent workers, they have agreed to transition their workers to another supplier.

The MSP will never be a recruitment competitor within your agency.

The MSP can never “manage” their own workers in your agency.

Will the MSP provide selection and assessment methodologies?

Agencies are not mandated to use an MSP.

If an agency engages an MSP, the agency will decide the level of service they want from the MSP.

How do the VMS and MSP components work under the Contingent Workforce Strategy?

The VMS and MSP are services which support the contingent workforce strategy.

MSPs enable agencies to have a single interface between many suppliers.

Will suppliers retain ownership of their contingent workers?

Yes. The VMS is the technology and the MSP is the advisor. Contingent workers remain employees of the scheme suppliers.

Some agencies tend to refer to suppliers with a well-recognised brand rather than researching the market to identify other capable suppliers.

Your MSP will do the research and will assist you to identify small to medium enterprises (SMEs) with the requisite capability and expertise to meet your requirements.

What is the interaction between MSPs and the scheme suppliers?

MSPs can only source from prequalified suppliers.

When your agency engages an MSP, that MSP acts on your behalf and the scheme suppliers are required to engage with the MSP.

All transactions happen via the VMS so that there is complete visibility of the recruitment process.

How do the VMS and MSP provide innovation for SMEs?

The VMS and MSP support agencies in providing more opportunities for SMEs to do business with government.

The VMS reporting function gives agencies visibility of their spend patterns.

The MSP analyses these patterns and help agencies to identify trends or improve their use of SMEs.

How to apply

Applications can be made online at any time by suppliers who have signed up on Supplier Hub.

When completing your online application, you will need to download templates, complete the required information, save the documents and then upload them with your application. You can view the application templates before lodging an application.

Requirements for applying and acceptance criteria are set out in the scheme rules PDF, 996.78 KB.

How to apply: step by step

  1. Log in with your supplier account. If you don’t have one yet, you can sign up now.
  2. Start an application to join the scheme. You’ll need to answer questions and upload required documents.
  3. Submit your application.

Applications are assessed within 6 to 8 weeks. You will then receive an email advising the result of the assessment.

Tools, templates and resources

Supplier forums

FAQs - general information

What is the difference between this scheme and other prequalification schemes?

The Contingent Workforce Scheme is for the engagement of temporary personnel. Other schemes are in place for the procurement of other goods and services.

For example, consultancy service providers may be prequalified under the Performance and Management Services Scheme.

What job categories are covered by the scheme?

Information about the job categories and descriptions is available in Annexure 6 scheme rules PDF, 996.78 KB. There is availability within the scheme to expand or contract these job categories as required.

How can small and regional suppliers be part of the scheme?

One of the objectives of the scheme is to encourage regional and small and medium enterprises (SMEs) to apply.

The scheme does this by allowing applicants to nominate the regions where they wish to provide their services including the whole of NSW, a single region or any combination of regions.

The scheme also has simplified terms and conditions and reduced insurance requirements.

How is an SME defined?

SMEs are defined as small and medium enterprises from NSW, other States and Territories of Australia and New Zealand, that have an annual turnover of less than $2 million in the last financial year.

Does the scheme endeavour to offer the best rates and prices?

Yes. Although pay rates are not being set per role type, benchmarking analysis will continue so that hiring managers have an understanding of what NSW Government is paying.

How is supplier performance be managed under the scheme?

Performance management is be based on a list of key performance indicators (KPIs) which are outlined in the scheme rules PDF, 996.78 KB.

There is focus on the delivery of reporting requirements and client satisfaction and a supplier may be removed from the scheme if they have not satisfactorily met their KPIs.

Can a supplier be suspended or removed from the scheme?

A supplier can be suspended or removed from the scheme if they have not complied with the scheme rules PDF, 996.78 KB.

This includes unsatisfactory performance, providing misleading information and breaching the scheme conditions.

What happens if there is a dispute?

In the first instance, the customer and supplier must attempt to resolve any disputes.

In the case that a resolution cannot be reached, NSW Procurement can facilitate an outcome. This may include arranging a meeting between parties, determining the dispute in consultation, forwarding the dispute to a committee-based review process (the committee will be composed of independent NSW public service officers).

Where the supplier and customer still cannot reach a resolution, either party may request the Australian commercial disputes centre to nominate an independent expert.

What is third party arrangement and is this allowed under the scheme?

Under the Scheme, a third party arrangement is known as a sub-contract arrangement. Under the scheme condition clause 6.1.7, the sub-contract arrangement is not allowed.

Can the prequalified supplier outsource their payroll function?

Yes, a prequalified supplier can outsource the management of their payroll function to a non-recruitment or a non-contingent workforce supplier. The prequalified supplier must ensure that this payroll outsourcing function does not conflict with any scheme conditions like sub-contracting arrangement.

FAQs - applying for the scheme

Is there a deadline for applications to be lodged?

No. The scheme is open to supplier applications for the term of the scheme.

What are the insurance requirements?

The scheme insurance requirements are $5 million for professional indemnity and public liability.

Workers compensation insurance will also be required in accordance with applicable legislation.

Transport insurance requirements will also apply as appropriate.

Refer to the scheme rules PDF, 996.78 KB(PDF,255KB).

Can more than one person in my company apply?

Applications are identified by ABN, so it's preferred that only one application is lodged per company.

If an application is lodged with an ABN already accepted under the scheme, the applicant will receive a notification that they may continue to lodge the application, but it may be rejected.

Once an application has been approved, you may change the applicant's contact details.

Where a duplicate application is lodged and then rejected, it is subject to the scheme rules PDF, 996.78 KB.

How is financial stability evaluated if the business is seasonal?

The evaluation of financial stability will be conducted by an external provider who specialises in this type of appraisal.

How will my past experience be taken into account?

All past experience is taken into account.

From an evaluation perspective, assessment criteria will focus on demonstrated recent experience (in the past 6 months).

Customers using the scheme require some type of indication and assurance of a supplier’s existing ability to provide the services they say they can.

Recent experience demonstrates that a supplier is managing an active database of relevant candidates.

What are the acceptance criteria for the scheme?

There are many acceptance criteria including a focus on demonstrated capability and capacity. Refer to the scheme rules PDF, 996.78 KB for a complete understanding of what is required for acceptance onto the scheme.

Can I reapply if my application is not successful?

Yes. The process for unsuccessful applications is outlined in the scheme rules PDF, 996.78 KB.

If a supplier is currently on another scheme, are they required to apply for this scheme?

Yes, each scheme is structured around a specific good or service.

To become accepted on a scheme, a supplier must successfully demonstrate that it has addressed that specific scheme’s evaluation criteria.

The evaluation criteria are designed to provide customers with confidence the supplier is capable and competent in delivering the good or service required.

FAQs - Working with customers

How do buyers access the scheme?

NSW Government agencies and other eligible buyers can invite and assess supplier proposals using eTendering, by contacting suppliers directly or via Contractor Central, the vendor management system (VMS).

What will be done regarding agencies doing business with bigger, established companies and not giving opportunities to other companies?

Although the hiring manager is responsible for deciding which organisation they use, NSW Procurement is committed to continually educating agencies about how to best use the scheme and helping them in the selection process.

The vendor management system encourages customers to do business with a wider range of suppliers under the scheme and provide more transparency in relation to hiring trends.

Can customers create their own panels?

Customers are not limited in how they buy from the scheme. The scheme guidelines do not require agencies to broaden the range of suppliers they engage. NSW Procurement encourages opening up opportunities to a wider range of suppliers.

What is meant by the government ‘talent pool’?

A talent pool is a description of known candidates that have suitable qualifications and experience for work within government.

Whether this will become part of the scheme has not yet been decided. Any decision to incorporate one in the future will be done so with input from industry.

Who decides on the price of the service being supplied?

When suppliers agree to the scheme terms and conditions they, in effect, agree to the fixed supplier fees. Statutory costs (superannuation, payroll tax and workers compensation insurance) are also the same for all suppliers.

The discussion with the hiring manager will consist of the agreed pay rate and the quality of the service. There may be other costs that will need to be discussed with the hiring manager, for example travel costs and overtime.

How is the supplier rate charged?

The supplier rate is 7.05% of the pay rate for the first 12 month period and 5.14% of the pay rate thereafter.

The minimum supplier rate is $3 per hour and the maximum supplier rate is $15 per hour for the first 12 months.

Will this be a fixed price contract where an engagement is for a specific period?

No. The engagement of contingent labour will differ for each assignment as the period of employment and pay rates are decided by the individual customer.

A fixed price contract is likely to be applied for other schemes where there is likely to be a specific date, time and deliverable for completion of the project.

Is there any flexibility on the ceiling price?

No. The supplier fees are fixed.

FAQs - Vendor management system (VMS) and managed service providers (MSPs)

How do the VMS and the MSPs work under the Contingent Workforce Scheme?

The VMS is the technology and the MSP provides the service to support the scheme.

MSPs enable clusters to have a single interface between many suppliers.

What is the interaction between MSPs and suppliers on the scheme?

MSPs will only be able to work with prequalified suppliers.

If a customer engages an MSP to act on their behalf, the scheme suppliers are required to engage with the MSP.

What are the costs to suppliers to use the VMS and the MSP?

There are no costs to suppliers to use the VMS or the MSP.

What does MSP vendor neutrality mean?

Vendor neutrality means that suppliers approved as MSPs can’t supply their own contingent workers to the cluster where they are the MSP.

The MSP will never be a recruitment competitor within a cluster.

Who are the MSPs?

The 3 MSPs are:

  • Comensura Pty Limited
  • Kelly Outsourcing and Consulting Group Australia Limited
  • Manpower Services (Australia)

Do MSPs provide selection and assessment methodologies?

When a cluster engages an MSP, the cluster will decide the level of service they want from the MSP.

Do suppliers retain ownership of candidates?

Yes. The VMS is the technology and MSPs are the advisers. Contingent workers remain the suppliers’ employees.

Can the MSPs deal with non-prequalified suppliers?

No, MSPs can only deal with prequalified suppliers. Only prequalified suppliers will have access to Fieldglass.

Can the MSPs deal with or suppliers not prequalified for certain categories?

No, MSPs can only deal with suppliers prequalified for individual categories. Suppliers are encouraged to keep their their expertise up-to-date.

How does the VMS impact suppliers?

Suppliers have their own portal to manage the sourcing and timesheet processes.

Supplier performance and costs are captured in the VMS.

Suppliers will not need to produce manual reports for clusters that have fully implemented the VMS.

What is the process to integrate the VMS with suppliers’ systems?

Fieldglass can provide integration options for suppliers.

Suppliers will need to sign a licence agreement before accessing the VMS.

What if not all clusters have implemented the VMS, how will it affect suppliers?

During the phased implementation across the sector, suppliers will be required to operate 2 processes:

  • to continue doing business as usual (including monthly manual reports) with clusters that have not implemented the VMS.
  • those clusters that have implemented the VMS, suppliers must only transact via the VMS.

How does this affect submitting monthly sales reports to NSW Procurement?

Until you are transacting through the VMS, suppliers must continue sending monthly reports to contingentlabour@treasury.nsw.gov.au for clusters without the VMS.

How long will it take to implement the VMS across the sector?

We are reviewing a phased-in approach, however this may change by demand. The estimated minimum timeframe to implement the VMS in each cluster is 12 weeks.

Will my contingent worker’s CV be shared with other suppliers in the VMS?

No, a contingent worker’s CV will not be shared with other suppliers in the VMS.

Some clusters tend to refer to suppliers with a well-recognised brand rather than researching the market to identify other capable suppliers.

MSPs will do the research work and assist clusters to identify small to medium enterprises (SMEs) with the requisite capability and expertise to meet their requirements.

The VMS will ensure the equal distribution of roles.

How will I get more work?

The VMS will give visibility into the panel of prequalified suppliers for each category and region.

Suppliers including SMEs will have access to more opportunities based on their performance.

How do the VMS and MSPs provide innovation for SMEs?

The VMS will provide electronic role distribution, online CV submission, electronic timesheets, supplier invoice generation (receipt created tax invoice - RCTI) and automatic monthly and ad hoc reports. This reduces the admin burden for all suppliers.

Will all suppliers receive a request to submit resumes for the category they are prequalified for?

The decision about who will receive requests for quotes is the cluster's decision.

The VMS as a tool will support fair distribution of roles over time.

How does invoicing operate with the VMS?

Once the contingent worker submits their timesheet in the VMS, the hiring manager will electronically approve it.

After the hiring manager approves the timesheet online, an RCTI is automatically created.

This replaces the current invoicing process.

Suppliers will no longer need to send invoices to clusters.

How will suppliers get jobs and opportunities?

Jobs will be distributed via the VMS.

When a job request is posted in the VMS, suppliers in the prequalified panel will receive an email advising them to log into their portal.

The decision about who will receive jobs is the cluster's decision.

Do clusters still maintain existing relationships?

Yes. The VMS is a technology to support buyer-supplier engagement and should not impact on existing relationships, as long as the performance of the suppliers is maintained.

How will the VMS manage blue-collar workers?

Blue-collar workers will follow the same VMS workflow as white-collar workers.

The VMS is accessible via PC, laptop, iPad, iPhone. Workers simply need to access the internet to key in their hours worked.

What is the contractual arrangement between the NSWP, clusters, suppliers, MSPs and VMS?

Under the scheme, NSWP owns the head agreement under the 4 pillars. The 4 pillars are vendor-neutral to each other. Suppliers will only sign the End User Licensing Agreement (EULA) with the VMS provider Fieldglass for access to Fieldglass.

Download the scheme rules

Download the scheme condition requirements PDF, 996.78 KB