The Queensland Department of Natural Resources and Mines (NR&M) is currently running the Vegetation Incentives Program (VIP), which pays landholders to protect and manage nonremnant vegetation on their properties. The program is using an auction mechanism to allocate the funding. Observing the VIP gives insight into participant behaviour and the impact of the policy formation process on auctions for conservation contracts. The program is particularly interesting as this is the first time this mechanism is being used in Australia to distribute funds on a state-wide level. A preliminary analysis has been undertaken and key lessons have been identified.