fma act and cpg requirements of procurements under $80,000 – current state

LEVEL 1 UNIT 3 GREEN SQUARE KINGSTON 2604 P +61 6282 8852 F +61 2 6282 8832 WWW.THINKPLACE.COM.AU

AUSTRALIA NEW ZEALAND

FMA Act and CPG requirements of procurements under $80,000 – current stateProject Analysis and Review of Commonwealth

Procurement Processes for procurements under $80,000

Client Department of Finance & Deregulation

DateVersion

27 June 2011 FINAL V1.0

ThinkPlace Team

Raffaella Recupero, Linda Dewey, Mark Thompson, Behzad Emami

ANALYSIS & REVIEW OF COMMONWEALTH PROCUREMENT PROCESESS UNDER $80,000

About this documentFor the first part of the Review and Analysis of Commonwealth Procurement Processes project, ThinkPlace has reviewed and analysed the requirements set by the Financial Management Accountability Act 1997 and Regulations and the Commonwealth Procurement Guidelines (CPG) for non-covered procurements.

ThinkPlace will work with a small group of people in Finance to develop an agreed overarching business process model which, based on requirements, represents the Commonwealth procurement process for procurements under the $80,000 threshold.

ContentsIntentIntent Statement 4Project approach, activities and timeframes 5

Procurement framework Procurement framework – high level view 7Procurement framework – detailed view 8

Configuration of the procurement systemProcess fundamentals 11Conceptual business process 12Rules and standards for procurement 13Regulated (or sound practice) approaches or events 14Configuration of the procurement system 15

Appendix 17



Intent statementA shared understanding** of the objectives, outcome, scope and approach for the project

**Cooperatively developed with agencies which participated in the Review on 13 April 2011


Out of scope The project will not to assess how well agencies implement

the CPGs and relevant FMA legislation when undertaking procurements

The project will not redesign policy

Where are we now?Analysis of ‘2008-09 AUSTENDER statistics indicate 85,000 contracts (over $10,000) were awarded. The total value of these contracts approx. $35bn.Of those contracts, about 65,000 contracts falling under the $80,000 threshold were awarded. The total value of these contracts was about $12.6bn.Over 80% of the total number of contracts correspond to about 4% total value. An APS 5/6 can spend up to 80% their time on low value contractsLow value contracts translate to a high administrative burden Agencies have tailored procurement approaches reflect organisational structure, authority and delegations, approval processes, risk appetite, level of IT maturity, and resourcing, reporting processes and systemsProcurement functions differ in agencies – some functions are centralised, some are decentralisedParticipating agencies have undertaken work to review CEIs, processes and protocolsWhole of Government CEIs are under developmentWork has also been undertaken to simplify the standard short form contract, reducing the number of pages from 80 to 6

Intent

How do we get there?

Analyse and review Commonwealth procurement practices currently employed by selected agencies when conducting procurements under $80,000, identifying issues, pressure points and opportunities for improvement, and on that basis making recommendations for simplifying and streamlining processes.

What do we need to do?

What would success look like?A better practice model for procurements under the threshold that:

− Standardises the process across FMA agencies− Makes it easier for staff to know what to do and how

to conduct procurements − Reduces administrative burden

Finance will be able to use the project findings and recommendations as a basis for presenting a better practice model to FMA agencies, where appropriate. The project will influence agency CEIs and processes

Focussing question

How can we standardise and streamline the process for procurements under the $80,000 threshold, making it less onerous FMA Act agencies, while also maintaining the integrity of the FMA Act?

A standardised, simple and safe process for all FMA agencies conducting procurements that fall under the $80,000 threshold

What is the problem/ opportunity?Agency procurement processes are complex, confusing, and onerous for staffRequirements vary from agency to agency – processes are not standardised across governmentSuppliers are frustrated

APPROACH FOR BRIDGING THE GAP

April

• Intent, planning and agency engagement

• CPG process modelling

May

• Agency CEI process mapping

• Case study development by agencies

• Case study analysis

June

• Synthesis • Design ‘better

practice model’

Timing

What do we need to consider?Avoid over-engineering or over prescribingAim to set a benchmarkImpact on behavioural change

Who do we need to involve?Finance’s Procurement Policy BranchProcurement Policy Areas and representatives from line areas

Under the FMA Act, 104 FMA agency CEOs have devolved authority to manage public money within their agency.

The FMA Act and Regulations set the framework for the proper management of public money and public property in the custody and control of the Commonwealth.

The Commonwealth Procurement Guidelines (CPGs) articulate the Government’s expectations for all department and agencies conducting procurement.

Agencies have evolved their procurement policies and practices within the context of the agency’s organisational structure, delegations, approval processes etc.

Agency specific policies and procedures are contained with large and complex volumes of CEIs, departmental policy documents and protocols.

SYSTEM IN FOCUS


Project approach, activities and timeframes

Choosing your three case studies:

A typical procurementAn example of good practiceAn example of a convoluted/ inefficient process

Presenting your case studies

Describe…What was procuredHow the market was approached (e.g. direct, select)Contract value Time taken for procurement process, end to end Roles involved in the processes (line area, procurement area, delegate,..)Delegate approval processReporting processDocumentation developedQuestions referred to the procurement area (if any)

1. Agency A

Procurement operates on a decentralised basis, where Line Areas handle procurements under $80,000The Corporate Procurement Branch is resourced by 70 FTEWell document procurement policies and proceduresUndertaken some mapping work already and identified opportunities for streamlining processes

2. Agency BGovernance, Contracts and Services area is resourced by 2 FTEReviewed CEIs last yearIssues identified and some new approaches established

3. Agency C

Procurement operates on a decentralised basis, where Line Areas handle procurements under $80,000.For procurements above the threshold, the internal Procurement Advice area vets the documentation and provides advice on the process.The Procurement Policy Branch provides policy advice and guidance to agency central procurement areas.The Procurement Implementation Branch also provides helpdesk support to other agencies in relation to AusTender.

Phase Key activity / task Date (tentative) ThinkPlace contacts

0 Establish project / formulate intent Finalised by 13 April 2011 Raffaella Recupero/ Linda Dewey

1 Research and model overarching procurement process

Finalised by 29 April Raffaella Recupero/ Mark Thompson

2.1 Agency A business process mapping Workshop 2 May Finalised by 17 May (inc. validation/acceptance)

Linda Dewey/ Mark Thompson

2.2 Agency C business process mapping Workshop 4 May Finalised by 17 May (inc. validation/acceptance

Raffaella Recupero/ Behzad Emami

2.3 Agency B business process mapping Workshop 18 May Finalised by 31 May (inc. validation/acceptance

Raffaella Recupero/ Mark Thompson

3.1 Agency A interviews/ design workshop Three case studies prepared by 13 May Activity 19 MayFinalised by 31 May (inc. validation/acceptance

Linda Dewey/ Behzad Emami

3.2 Agency C interviews/ design workshop Three case studies prepared by 27May Activity 1 June Finalised by 14 June (inc. validation/acceptance

Raffaella Recupero/ Mark Thompson

3.3 Agency B interviews/ design workshop Three case studies prepared by 27May Activity 1 June Finalised by 14 June (inc. validation/acceptance

Linda Dewey/ Behzad Emami

4.0 Good practice model design Finalised by 29 June All



Procurement framework Government requirements for procurement based on FMA Act 1997, Regulations and CPGs


Constitution Act s81-3All revenue or money raised or received by the Executive Government forms one Consolidated Revenue Fund from which money is appropriated, under provisions of an existing or proposed law

• The Government’s procurement policy framework comprises several legislative and policy elements including the Financial Management Accountability Act and Regulations 1997, and the Commonwealth Procurement Guidelines (CPGs), as well as other legislation which interacts with procurement.

• The CPGs are legislative instruments with which agencies must comply.

Financial Management Accountability (FMA) Act 1997Provides for the proper use and management of public money, public property and other Commonwealth resources

Financial Management Accountability Regulations 1997Regulations

Commonwealth Procurement GuidelinesEstablish the core procurement policy framework and articulate Government’s expectations for all department and agencies

[issued by Finance Minister]

Finance CircularsAdvise Agencies of key changes and developments in the Government’s procurement framework

Guidance DocumentsA range of web-based and printed documents which assist Agencies to implement the Government’s procurement policy

Policy and Procedural DocumentsDetailed instructions on procurement practices

Chief Executive InstructionsOperational guidance to agency official on financial management / procurement

Procurement framework – high level view (for FMA agencies)

Free Trade Agreements

Note•FMA Determinations and Orders have not been included in this procurement framework because none at this stage are relevant to procurement•The Good Procurement Practice has not been included in this procurement framework


Financial Management Accountability (FMA) Act 1997

Part 7Special responsibilities of Chief Executives

Section 44 Promoting proper use of Commonwealth resources•A Chief Executive must manage the affairs of the Agency in a way that promotes proper use** of the Commonwealth resources for which the Chief Executive is responsible. •The Chief Executive must comply with this Act, the regulations, Finance Minister’s Orders, Special Instructions and any other law.

**Proper use means efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth

Financial Management Accountability Regulations 1997Regulations

Part 3 Powers of Chief Executives

Part 4Commitments to spend public money

Regulation 6Chief Executive Instructions•The Chief Executive of an Agency is authorised to give instructions (to be called Chief Executive’s Instructions) to officials in that Agency on any matter necessary or convenient for carrying out or giving effect to the FMA Act or Regulations

Regulation 7Commonwealth Procurement Guidelines•The Finance Minister may issue guidelines (to be called Commonwealth Procurement Guidelines) about procurement policies and processes; requirements regarding the publication of procurement details; requirements regarding entering into procurement arrangements; and the disposal of public property.•Officials performing procurement duties must act in accordance with the CPGs.

• The operative provisions of the Act and Regulation that are relevant for procurement are detailed below.• The outcome that Parliament expects is that Chief Executives promote propose use of Commonwealth Resources, which is defined as efficient,

effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth.

Regulation 8Entering into an arrangement•A person must not enter into an arrangement unless:(a) a spending proposal has been approved under regulation 9; and(b) if required, written agreement has been given under regulation 10

Regulation 9Approval of spending proposals•An approver must not approve a spending proposal unless the approver is satisfied, after making reasonable inquiries, that giving effect to the spending proposal would be a proper use of Commonwealth resources (within the meaning given by subsection 44 (3) of the Act).

Regulation 10Arrangements beyond available appropriation•If the agency has insufficient appropriation of money, a person must not enter into an arrangement unless first approved by the Finance Minister.

Regulation 12Recording approval of spending proposals•The approval of spending proposals must be made in writing

Procurement framework – detailed view (for FMA agencies)


Commonwealth Procurement GuidelinesEstablish the core procurement policy framework and articulate Government’s expectations for all department and agencies

Division 1Procurement Principles Applies to all procurement

Division 2Mandatory Procurement Principles (covered)

Procurement framework – detailed view (for FMA agencies)• The legislative instruments and Guidance Material that are relevant for procurement are detailed below

However some provisions will apply to non-covered procurements e.g. market approaches

Guidance Documents

A range of web-based and printed documents which assist Agencies to implement the Government’s procurement policy

Finance Circulars

To advise Agencies of key changes and developments in the Government’s procurement framework

2006/03

Limited Liability in Information and CommunicationsTechnology Contracts

2011/01

Commitments to spend public money(FMA Regulations 7 to 13)

2009/11

Best Fare of the Day for International Official Air Travel

2003/02

Guidelines for Issuing and Managing Indemnities,Guarantees, Warranties and Letters of Comfort

2008/10

Procurement 30 Day Payment Policy for Small Business

2009/10

Use of the Lowest Practical Fare for Official Domestic Air Travel

2005/12

Definition of Procurement of Construction Services

No.6

Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of ComfortSeptember 2003

No. 15

Guidance on Procurement Publishing ObligationsJuly 2007

No. 10

Guidance on Complying with Policies of the Commonwealth in Procurement November 2010

No. 14

Guidance on Ethics and Probity in Government ProcurementJanuary 2005

No. 3

Guidance on Confidentiality in ProcurementJuly 2007

No. 13

Guidance on the Mandatory Procurement ProceduresJanuary 2005



Configuration of the procurement systemProcess fundamentals

Conceptual business process

Rules and standards for procurement

Regulated (or sound practice) approaches or events

Configuration of the procurement system


Process fundamentals• Procurement encompasses the end-to-end process of acquiring goods or services. A generic procurement process is much the same, whether you

are buying stationery or professional services. • Procurement Officials and Delegates have roles and responsibilities under the FMA Act and CPGs.• Specifically, under s. 44 of the FMA Act Chief Executives are required to promote the efficient, effective and ethical use of Commonwealth

resources. For procurement, this responsibility is mainly discharged by ensuring their agencies have appropriate policies, procedures and guidelines in place to achieve value for money.

• From agency to agency, procurement practices vary as the requirements of the FMA Act and CPGs are translated into agency specific Chief Executive instructions (CEIs) and operational procedures to ‘fit’ the context of the organisation.

Approver/Delegate

SuppliersProcurement Official

Receive good(s)/ service(s)

Evaluate and enter contract

Go to market

Assess existing arrangements for suitability

Identify need for procurement

PROCUREMENT PRACTIC

ES

VARY FROM A

GENCY TO

AGENCY

Outcome

Proper use of Commonwealth resources

Efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth

As stated in the FMA Act




Go to market


Identify need for procurement 1

Conceptual business processScope

The high level process for procurements under $80,000 (derived from the current requirements set by the FMA Act and CPGs).Starts with an identified procurement need and ends with the acceptance of the goods/ servicesTriggered by a business need or external drivers

1 Goods/ services identified2 In accordance with conditions specified in the contract3 Assumes pre-approval

Define procurement

need

Determine best approach

Is proc’t best way?

End

Value the procurement

Value?CPG Div 2;

CEIs

Identify existing arrangements

< $80,000

No (grant)

Yes > $80,000

Use existing arrang’t?

EndYes 2i.e. Coordinated; cooperative and internal

No Select tenderingProc’t method

?

Direct sourcing 3

Issue request

Accept good/ service

2

Write specifications

Open tendering

3Seek pre-approval

Reg 9Pre-

approval

Receive submissions

Assess submission(s)

4

Identify successful

supplier

Seek approval from Delegate

Reg 8, 9, 10

Inform all applicants of

decision

CPG7.23

Enter arrangement/

contract

Report

AusTender 4

CPG7.24

4 For contract value over $10,0005 Out of scope: dealing with complaints, audits, warranty claims, contract management, disposal of goods

5

Pay for good/ service End 5

Del

eg

atio

ns

an

d a

pp

rova

l pro

cess

es

[s.

12

FM

A A

ct] [

Re

gs 8

, 9

, 10

, 1

2]

Rep

ort

ing

[An

nua

l Pro

cure

me

nt P

lan

s C

PG

s 7

.15

-7.1

6, A

usT

en

der

CP

Gs

7.2

4]

Doc

um

enta

tion

[CP

Gs

7.8

– 7

.12

]

Ide

ntify

and

man

ag

e r

isks

[C

PG

s 6

.8-6

.10

]


Rules and standards for procurementThe CPGs (Div. 1 - Procurement Principles) prescribe a number of business rules (“must”, “should”) and standards (“need”) that govern the way agencies conduct procurements. Appendix 1 contains a detailed listing. •There are 21 discreet “musts” or obligations with which agencies must comply. There are 20 discreet “shoulds” or matters of sound practice, and 10 discreet “needs” or standards. •The observation is that regulation of the system is mainly geared towards ‘Accountability and Transparency’, and is also an indication of what is driving agency behaviour.

LEGEND

must

should

need

Obligations which must be complied with

Matters of sound practice

A “standard”

must should need

1

132

373

51015

1002021 51

19%39%42% 100%

1

Value for money

Encouraging competition

Efficient, effective, ethical use of resources

4.34.1

5.3

5.4

5.5

5.7

5.8

6.8

6.9

6.10

6.12

6.13

6.14

6.15

6.16

6.19

6.20

6.21

6.21

6.22

Accountability and Transparency

7.2

7.9

7.9

7.10

7.12

7.15

7.16

7.17

7.18

7.19

7.20

7.21

7.21

7.22

7.23

7.23

7.24

7.26

7.28

7.29

7.30

7.31

7.32

7.33

7.34

7.34

7.34

7.34

7.34

7.34

5.2

Note•Clause 4.1 is treated as a ‘must’.


Regulated (or sound practice) approaches or events

Request Documentation

4.3

Non-discrimination

5.2

5.3

5.4

5.5

Competitive processes

5.7 5.8

Risk management

6.8

6.9

6.10

Limiting contractor’s liability

6.12

6.13

6.14

6.15

6.16

Ethics

6.20

6.21

6.21

6.22

Open, transparent processes

7.2

Documentation

7.9

7.9

7.10

7.12

Disclosure- APPs Disclosure- Notification

7.15

7.16

7.17

7.18

7.19

7.20

Disclosure- Process

7.21

7.21

7.22

7.23

7.23

Disclosure- Reporting

7.24

Disclosure- Treatment of confidential info

7.28

7.29

7.30

7.31

7.32

Disclosure- Other Obligations

7.26

Dealing with complaints

7.33 7.34

7.34

7.34

7.34

7.34

7.34

• The CPG requirements relate to the way in which procurements are conducted (e.g. risk management) and to particular procurement events e.g. request documentation, reporting)

4.1


Rule set Procurement Process Outcome

Proper use of Commonwealth resources

Efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth

As stated in the FMA Act

Configuration of the procurement system• The requirements, rules and standards set out by the FMA Act and the CPGs configure the way the ‘procurement system’ operates in practice and drive

the performance of the system. • In the absence of legislative change, agencies need to find ways to simplify and streamline their practices within a regulated system. • The observation is that there is a disconnect between the desired outcome stated in the FMA Act (i.e. proper use of Commonwealth resources) and the

core principle underpinning the Australian government procurement.

Value for money



4.34.1

5.3

5.4

5.5

5.7

5.8

6.8

6.9

6.10

6.12

6.13

6.14

6.15

6.16

6.19

6.20

6.21

6.21

6.22


7.2

7.9

7.9

7.10

7.12

7.15

7.16

7.17

7.18

7.19

7.20

7.21

7.21

7.22

7.23

7.23

7.24

7.26

7.28

7.29

7.30

7.31

7.32

7.33

7.34

7.34

7.34

7.34

7.34

7.34

5.2



Go to market


Identify need for procurement 1

1

2

3

4

5

Define procurement

need

Determine best approach

Is proc’tbest way?

End

Value the procurement

Value?CPG Div 2;

CEIs

Identify existing arrangements

< $80,000

No (grant)

Yes > $80,000

Use existing

arrang’t?

EndYes 2i.e. Coordinated; cooperative and internal

No Select tenderingProc’t

method?

Direct sourcing 3

Issue request

Accept good/ service

2

Write specifications

Open tendering

3Seek pre-approval

Reg 9Pre-

approval

Receive submissions

Assess submission(s)

4

Identify successful

supplier

Seek approval from Delegate

Reg 8, 9, 10

Inform all applicants of

decision

CPG7.23

Enter arrangement/

contract

Report AusTender 4

CPG7.24

5

Pay for good/ service

End 5

De

leg

atio

ns

an

d a

pp

rova

l pro

cess

es

[s. 1

2 F

MA

Act

] [R

eg

s 8

, 9

, 10

, 12

]

Re

po

rtin

g [A

nn

ua

l Pro

cure

me

nt P

lan

s C

PG

s 7

.15

-7.1

6, A

usT

en

de

r C

PG

s 7

.24

]

Do

cum

en

tatio

n [C

PG

s 7

.8 –

7.1

2]

Ide

ntif

y a

nd

ma

na

ge

ris

ks [C

PG

s 6

.8-6

.10

]



Appendix


Value for money

Appendix 1. Rules and standards for procurementLEGEND

must

should

need



A “standard”


4.1 Value for moneyValue for money is the core principle underpinning the Australian government procurement. In a procurement process this principle requires a comparative analysis of all relevant costs and benefits of each proposal throughout the whole procurement cycle (whole-of-life costing).

5.2 Non-discriminationProcurement methods must not discriminate against potential suppliers due to their degree of foreign affiliation or ownership, location or size. The property or services on offer must be considered on the basis of their suitability for their intended purpose and not on the basis of their origin.

5.3 Non-discrimination- SMEsOfficials undertaking procurement should ensure that procurement methods do not unfairly discriminate against SMEs.

5.4 Non-discrimination- SMEsAgencies should seek to ensure that procurement processes are readily communicated and accessible to SMEs and should not take action to deliberately exclude SMEs from participating.

5.5 Non-discrimination- SMEsAgencies need to ensure that SMEs have appropriate opportunities to competefor business

5.7 Competitive Procurement Processes Participation costs (agencies and potential suppliers) should be considered when determining a process commensurate with the scale, scope and relative risk of the proposed procurement.

5.8 Competitive Procurement Processes Specific procedures must be followed for covered procurements. These procedures, which further encourage competition and in many circumstancesrequire an open approach to the market, are outlined in Division 2 [OUT OF SCOPE].

CPG – detailed clauses

4.3 Request documentationRequest documentation needs to specify logical, clearly articulated, comprehensive and relevant conditions for participation and evaluation criteria. This enables identification, assessment and comparison of the costs and benefits of all submissions on a fair and common basis over the whole procurement cycle.


Appendix 1. Rules and standards for procurementCPG – detailed clauses

LEGEND

must

should

need



A “standard”


6.8 Risk Management Risk management should be built into an agency’s procurement processes. Agencies should ensure that appropriate procedures are in place to identify and consider all relevant risks throughout the procurement cycle.

6.9 Risk Management Agencies should generally not accept risks which another party is better placed to manage. Similarly, where an agency is best-placed to manage a particular risk, it should not seek to inappropriately transfer that risk to a supplier.

6.10 Risk Management Agencies need to carefully monitor the terms and conditions, including pricing, on which risk allocations are determined, to ensure that they reflect value for money.

6.12 Limiting a Contractor’s Liability to the Commonwealth Agencies must undertake a risk assessment to inform any decision about whether limiting a contractor’s liability through a liability cap or indemnity would be appropriate, and if so, what limits may be suitable.

6.13 Limiting a Contractor’s Liability to the Commonwealth Agencies must undertake a risk assessment to inform any decision about whether limiting a contractor’s liability through a liability cap or indemnity would be appropriate, and if so, what limits may be suitable.

6.14 Limiting a Contractor’s Liability to the CommonwealthWhen considering a limit on a supplier’s liability, agencies should note that arrangements to limit liability can carry direct or indirect costs which must be considered within the determination of value for money. Similarly, if a risk assessment determines it would be appropriate to require a supplier to accept unlimited liability, value for money impacts need to be considered.

6.15 Limiting a Contractor’s Liability to the CommonwealthAgencies should develop and implement a risk management plan if it decides to limit a contractor’s liability, through a liability cap or indemnity, based on an assessment of the risks and value for money considerations.

6.16 Limiting a Contractor’s Liability to the CommonwealthFor more complex procurements, request documentation should include a draft contract with clear liability provisions. Potential suppliers should be requiredto indicate compliance with the entire contract, including liability provisions,and separately identify any clauses of non-compliance or partial compliance, clearly providing details and costs for any alternative clauses.

6.19 EthicsAgencies need to ensure that officials involved in procurement:a. recognise and deal with any conflicts of interest, including perceived conflicts of interest;b. deal with suppliers and potential suppliers even-handedly;c. consider seeking advice where probity issues arise;d. do not compromise the Australian Government’s standing by acceptinginappropriate gifts or hospitality;e. are scrupulous in their use of public property; andf. comply with all duties and obligations including the agency’s CEIs in relation togifts or hospitality, the information privacy principles of the Privacy Act 1988, thesecurity provisions of the Crimes Act 1914 and, where applicable, the AustralianPublic Service’s Code of Conduct as set out in the Public Service Act 1999.

6.20 EthicsAgencies should include contract provisions requiring contractors to comply with materially relevant laws and should, as far as practicable, require suppliers to apply such a requirement to sub-contractors. Contractors must also be able to make available details of all sub-contractors engaged in respect of the procurement contract.




6.21 EthicsAgencies must not enter into contracts with suppliers who have had a judicial decision against them (not including decisions under appeal) relating to employee entitlements and have not paid the claim.

6.21 EthicsAgencies should seek to confirm a tenderer has no such unsettled judgements by seeking a declaration on the matter from all tenderers.

6.22 EthicsAgencies must not seek to benefit from supplier practices that may be dishonest, unethical or unsafe.


7.2 Open, transparent, justifiable processesAgencies need to have procedures in place to ensure that procurement processes are conducted soundly and that procurement related actions are documented, defensible and substantiated in accordance with legislation and government policy.

7.10 DocumentationDocumentation relating to procurement must be retained for a period of three years or for a longer period if required by legislation or other reason for a specific procurement. In addition, the Archives Act 1983 sets out requirements in relation to Commonwealth records, including dealings with, and access to, such records.

7.15 Disclosure-Annual Procurement PlansAgencies must publish on AusTender, by 1 July each year, an AnnualProcurement Plan (APP) to draw suppliers’ early attention to potential procurement opportunities.

7.9 DocumentationAgencies must maintain appropriate documentation for each procurement. The appropriate mix and level of documentation depends on the nature and risk profile of the procurement being undertaken.

7.9 DocumentationAgencies need to ensure there issufficient documentation to provide an understanding of the reasons for the procurement, the process that was followed and all relevant decisions, including approvals and authorisations, and the basis of those decisions.

7.12 DocumentationAgencies should ensure there is a written contract with the supplier in a procurement process.Where a written contract does not exist, agencies should ensure that sufficient written documentation or a written contract is formulated as soon as practicable. For low value, routine purchases a purchase order would be considered sufficient documentation.

7.16 Disclosure-Annual Procurement PlansThe APP should contain a short strategic procurement outlook for the agency supported by details of any planned procurement. The detail should include the subject matter of any planned procurement and the estimated date of the publication of the approach to the market.

LEGEND

must

should

need



A “standard”




7.17 Disclosure- NotificationAgencies must publish all open approaches to the market on AusTender. Relevant documentation providing information on the approach to market must also be available, to the extent practicable, for download from AusTender.

7.20 Disclosure- NotificationFor select tenders, agencies must issue all invitations to tender electronically and, to the extent practicable, make tender documentation available electronically to all potential suppliers that are invited. Electronic invitations may also be supplemented by other documented forms of invitation.

7.23 Disclosure- ProcessOn request, debriefings should also be provided to successful tenderers.

7.18 Disclosure- NotificationIf an agency advertises an open approach to the market through other avenues, such as print media, the details selected for inclusion in the notification must be the same as those contained in AusTender. Advertising an open approach to the market through other avenues does not diminish the requirement to publish the approach on AusTender.

LEGEND

must

should

need



A “standard”

7.19 Disclosure- NotificationWhere an agency is required to publish any other notification, request documentation, or any other document on AusTender, the information in any other form (for example, a printed version) of the document must be the same as that published on AusTender.

7.21 Disclosure- ProcessAgencies need to promptly provide, on request, to any potential supplier, documentation that includes all information necessary to permit potential suppliers to prepare and lodge submissions.

7.21 Disclosure- ProcessAgencies must, to the extent practicable, use AusTender to make request documents available.

7.22 Disclosure- ProcessWhere an agency rejects a potential supplier’s submission, the agency mustpromptly advise them, and on request provide a written explanation for that rejection.

7.23 Disclosure- ProcessFollowing the award of a contract, agencies must promptly inform all tenderers of the tender decision and on request provide an unsuccessful tenderer with the reasons its submission was not successful.

7.24 Disclosure- ReportingAgencies must report on AusTender all Commonwealth contract and agencyagreements, including standing offer arrangements and amendments to these arrangements, which meet the contract reporting criteria in Guidance on Procurement Publishing Obligations.

7.26 Disclosure - Other ObligationsTo enhance transparency, agencies must make available on request, the names of any sub-contractor engaged by a contractor in respect of a Commonwealth contract for procurement.

a. Agencies must require contractors to agree to the public disclosure of the names of any sub-contractors engaged to perform services in relation to a Commonwealth contract for procurement.

b. Contractors must be required to inform relevant sub-contractors that the sub-contractor’s participation in fulfilling a Commonwealth contract for procurement may be publicly disclosed.




7.28 Disclosure - Treatment of Confidential InformationWhen conducting a procurement and awarding a contract, agencies should take appropriate steps to protect the Commonwealth’s confidential information. This includes observing legal obligations such as under the Privacy Act 1988 and statutory secrecy provisions.

7.29 Disclosure- Treatment of Confidential InformationAgencies should therefore ensure that where it is necessary for potentialsuppliers to have access to confidential information for the purpose of preparinga submission that appropriate steps are taken to ensure that potential suppliersmaintain the confidentiality of that information

LEGEND

must

should

need



A “standard”

7.30 Disclosure - Treatment of Confidential InformationAgencies should ensure that potential suppliers’ submissions are treated as confidential prior to the award of a contract and that unsuccessful submissions are kept confidential after the award of the contract to a supplier.

7.31 Disclosure- Treatment of Confidential InformationThe need to maintain the confidentiality of information should always bebalanced against the public accountability requirements of the Australian Government. It is therefore important for officials to plan for and facilitate appropriate disclosure of procurement information. In particular, officials should:

a. include provisions in request documentation and contracts that alert prospective suppliers to the public accountability requirements of the Australian Government, including disclosure to the Parliament and its committees;

b. where relevant, include a provision in contracts to enable the Australian National Audit Office to access contractors’ records and premises to carry out appropriate audits (model access clauses have been developed for agencies to tailor and, where appropriate, incorporate into relevant contracts);

c. consider, on a case by case basis, any request by a potential supplier for material to be treated confidentially after the award of a contract, only entering into commitments to maintain confidentiality where these are appropriate; and

d. be aware of the requirement for the disclosure of information consistent with the Freedom of Information Act 1982.

7.32 Disclosure- Treatment of Confidential InformationWhere confidential information is required to be disclosed, for example following a request from a Parliamentary committee, reasonable notice in writing must be given to the party from whom the information originated.

7.33 Dealing with ComplaintsProcurement processes need to be based on clearly articulated and defensible evaluation criteria consistent with the procurement policy framework. Agencies’ actions in undertaking procurement processes must be robust and defensible.

7.34 In the event that a complaint is received agencies should aim to manage this process internally, where possible, through communication and conciliation with the tenderer or supplier.

7.34 Agencies must apply fair, equitable and non-discriminatory complaint handling procedures.

7.34 The procedures should takeaccount of the following:

7.34 a. the process needs to be systematic and well understood by theparties involved;




LEGEND

must

should

need



A “standard”

7.34 Dealing with Complaintsb. senior management and officials

independent of the process should be involved as appropriate;

c. complaints should be dealt with in writing;

7.34 d. each party must have sufficient time to appropriately respond to developments (no less than 10 days, unless urgent);

e. if a matter has been referred to an external body for review, agencies may be required to provide all relevant documents to that body as required by law; and

f. agencies must ensure that the initiation of a complaint process does not prejudice a supplier’s or a potential supplier’s participation in future procurement processes.


Page intentionally blank