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Appendix C - Departmental procurement practices and outcomes

This appendix focuses on the department's procurement practices and outcomes, with attention to:

  • procurement policies and practices;
  • competitive tendering and contracting arrangements;
  • use of consultancies; and
  • payments for market research and advertising.

Procurement policies and practices

The Department's approach to the procurement of all goods and services, including consultancies, is consistent with the requirements of the Commonwealth Procurement Guidelines - December 2008 - Financial Management Guidance No.1 (CPGs). The CPGs are applied to procurement activities through the Chief Executive's Instructions (CEIs) and supporting practical guidelines. The Department's procurement policies and processes have been developed to help ensure that it undertakes competitive, non-discriminatory procurement processes; uses resources efficiently, effectively and ethically; and makes decisions in an accountable and transparent manner.

The Department supports procurement by providing information and training on procurement policies and procedures to all staff, and maintaining a single point of contact for staff to seek advice on the CPGs, CEIs and tendering processes. Standard tendering and contracting documentation has also been developed to ensure that consistent procurement practices are undertaken.

As part of these arrangements, in 2008-09 the Department published the following on AusTender :

  • a procurement plan providing details of expected procurements for 2008-09 www.tenders.gov.au;
  • details of publicly available procurement opportunities with a value of $10,000 or more www.tenders.gov.au; and
  • details of all contracts, standing offers and consultancies awarded with a value of $10,000 or more www.tenders.gov.au.

The Department also publishes on its website, at www.infrastructure.gov.au/department/contracts, details of all contracts with a value of $100,000 or more entered into or active during the previous 12 months.

Australian National Audit Office access clauses

All contracts valued at $100,000 or more include a requirement for access to the contractor's premises by the Auditor-General.

Exempt contracts

In 2008-09, no contracts were exempted from publication on AusTender on public interest grounds.

Services delivered on behalf of the Australian Government

The Department delivers a number of services on behalf of the Australian Government. Services that have been contracted out relate to:

  • transport safety research and information services;
  • management of leased airports;
  • management of properties at Sydney West airport site;
  • aerodrome inspection services for remote Indigenous communities; and
  • the Australian Government Regional Information Service (AGRIS).

Transport safety research and information services

Contracts relating to collection and analysis of road safety fatality and injury data, and road safety information storage and distribution, continued in 2008-2009.

Management of leased airports

Private contractors provide airport building control and parking control services at federal airports. After an open tender in 2004-05, eight contracts for building control services were let for an initial term of four years from 1 July 2005. In 2008-09, the Department exercised its options under the terms of the contracts to extend the arrangements in place to 30 June 2011. Parking control services are contracted out to airport lessee companies annually for parking at eight airports. Contracts cannot be offered to bodies other than airport lessee companies under the Airports (Control of On-airport Activities) Regulations 1997.

Management of properties at Sydney West airport site

Management of properties owned on the previous Sydney West airport site (Badgerys Creek) was contracted out to Zeckendorf Holdings Pty Ltd following an open tender process. This contract was signed on 1 January 2003 for an initial term of three years with an option to extend for two years. The option was exercised from 1 January 2006 and has since been extended further until 30 June 2010.

Aerodrome inspection services for remote Indigenous communities

The Remote Aerodrome Inspection Program funds annual aerodrome inspection services and technical advice (via consultants engaged by the Department) to 59 remote northern Australia Indigenous communities in the NT, WA and Qld. Communities were chosen on the basis of advice provided by the Aboriginal and Torres Strait Islander Commission (ATSIC). These communities rely on air services, however they lack the technical expertise and resources necessary to conduct their own safety inspections, as required of aerodrome owners, in accordance with Civil Aviation Safety Authority (CASA) standards.

In February 2009 the Department used an open tender process to identify a new service provider for the program.

Australian Government Regional Information Service

The freecall 1800 call centre for the Australian Government Regional Information Service (AGRIS) is contracted to Cooma Monaro Technology Centre Ltd. A 30-month contract commenced on 1 June 2007 and will run until 30 November 2009. The Department has the option to negotiate an extension to the contract if desired.

Corporate activities

The Department has conducted detailed analyses of its corporate activities in line with government requirements for market testing of those activities. Corporate activities that have been contracted fall into three broad areas:

  • information and communication technology (ICT) services;
  • professional services; and
  • property and office services.

Like most organisations, the Department has a range of contracts and standing offers in place for the supply of professional services, energy, office equipment and other consumables.

ICT services

Following the transition to a new information technology (IT) services provider on 1 July 2008, the Department has improved its IT services by completing a refresh of all desktop computers. This refresh included the development of a new standard operating environment and upgrade to current Office productivity software based on Microsoft products. The project included training on the new software and was completed on time and under budget.

The Department also undertook a project refresh its corporate IT server systems and associated software. The majority of this Project was successfully implemented in the 2008-09 financial year and the remainder is scheduled to be completed early in the 2009-10 financial year.

Professional services

The Department has established several panels of professional services providers. The panels are subject to regular review.

Panels cover:

  • communication services;
  • legal services;
  • financial advisory services and accountancy services;
  • SAP services;
  • recruitment services; and
  • audit services.

Consultancy contracts

The Department engages consultants to carry out research or to provide professional or technical advice that cannot be provided by departmental staff. Consultants are procured as required and in accordance with the CPGs, the Department's Chief Executive's Instructions and the Infrastructure Procurement Manual.

During 2008-09, 121 new consultancy contracts were entered into involving total actual expenditure of $10.5 million. In addition, 26 ongoing consultancy contracts were active during the 2008-09 year, involving total actual expenditure of $0.8 million.

As per section 12(6) of the JCPAA Requirements for Annual Reports (June 2009), agencies are required to provide specific details on consultancy contracts and any competitive tendering and contracting undertaken. Details of consultancies valued at $10,000 or more let in 2008-09 are available as a supplement to the online version of this annual report, at www.infrastructure.gov.au/department/annual_report/index.aspx.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website, at www.tenders.gov.au.

Table C.1 Trends in procurement

  2004-05 2005-06 2006-07 2007-08 2008-09
Purchasing outcomes
Invoices paid within 30 days 96.7% 97.0% 97.0% 97.5% 98.4%
All consultancies, including consultancies let in previous years
Total expenditure $7.6m $10.9m $8.3m $6.3m $11.3m
New consultancies valued at $10,000 or more
Number let 129 113 92 68 113
Total value over the life of these contracts $8.5m $8.9m $6.9m $4.8m $12.9m
Advertising and market research paymentsa
Creative advertising $0.6m $0.15m $0.1m $0.3m $0.02m
Market research/polling $0.2m $0.02m $0.3m $0.1m $0.25m
Direct mail $0.4m $0.02m $0.1m $0.0m $0.00m
Media advertising, recruitmentb $3.1m $1.07m $0.8m $1.1m $0.28m
Media advertising, non-recruitment - $0.71m $1.2m $0.1m $0.35m

a Payments have been rounded to $0.0 where payments were less than $50,000. Discrepancies in table between totals and sums of components are due to rounding. For previous years, this total did not include payments below the reportable threshold, which for 2005-06 was $1500.
b In previous years, all media recruitment and non-recruitment was reported as a combined figure.

Payments for advertising and market research

In 2008-09, the Department paid $0.9 million for market research and advertising. Table C.2 lists payments of $10,900 or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.

Table C.2 Detail of advertising and market research payments of $10,900 or more

Creative advertising agenciesa
Firm Service provided Payment made in 2008-09 ($)
2B Advertising and Design Design of advertisements 15,370
Total creative advertising 15,370
Market research/pollinga
Firm Service provided Payment made in 2008-09 ($)
Colmar Brunton Social Research Pty Ltd Research into the trial introduction of liquids, aerosols and gels explosive detection technology 125,266
Colmar Brunton Social Research Pty Ltd Aviation Security Screening Review 88,663
Other Various 38,688
Total market research   252,617
Media advertising organisationsa
Firm Service provided Payment made in 2008-09 ($)
Recruitment advertising
hma Blaze Advertisements for staff vacancies 56,280
hma Blaze Advertisements for staff vacancies 34,710
hma Blaze Advertisements for staff vacancies 34,063
hma Blaze Advertisements for staff vacancies 23,955
hma Blaze Advertisements for staff vacancies 20,591
hma Blaze Advertisements for staff vacancies 20,444
hma Blaze Advertisements for staff vacancies 11,869
Esaress Pty Ltd T/A SpencerStuart Recruitment of CEO for the Civil Aviation Safety Authority 15,597
hma Blaze Advertisements for staff vacancies 15,033
Other Various 36,703
Total recruitment advertising 269,246
Media advertising organisationsa
Firm Service provided Payment made in 2008-09 ($)
Non-recruitment advertising
Sensis Whitepages Whitepages listing for the Department 180,000
hma Blaze Expressions of Interest for Appointment to a New South Wales RDA Committee 45,222
hma Blaze Call for submissions National Aviation Policy Statement White Paper 37,907
hma Blaze Further applications or submissions about capacity 23,168
Dept of Industry, Innovation and Regional Development, Victoriab Expressions of interest for appointment to a Victorian RDA Committee 20,140
hma Blaze Expressions of interest for appointment to a Queensland RDA committee 14,678
Other Various 28,120
Total recruitment advertising 349,235
Total media advertising organisations 618,481
Total advertising 886,468

a Where payments did not reach the $10,900 reporting threshold for 2008-09, those payments have been included under the category 'Other'.
b The Department of Industry, Innovation and Regional Development, Victoria (RDV) placed and paid for the cost of advertisements seeking Expressions of Interest to be appointed to a Victorian RDA Committee, in various regional newspapers. The Department reimbursed RDV for 50 per cent of this cost.

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