Appendix B - 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 operational 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, the 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 2009–10 the Department published the following on the AusTender website www.tenders.gov.au:
- a procurement plan providing details of expected procurements for 2009–10
- details of publicly available procurement opportunities with a value of $10,000 or more, and
- details of all contracts, standing offers and consultancies awarded with a value of $10,000 or more.
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 routinely include a requirement for access to the contractor's premises by the Auditor-General.
In 2009–10, 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 2009–10.
Management of leased airports
Private contractors provide airport building control and parking control services at federal airports. After an open tender process 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 existing arrangements to 30 June 2011. Parking control services, for parking at eight airports, are contracted out to airport-lessee companies annually. 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
The 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. The 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. A direct source contract for one year with two extension options was signed and in place from 1 July 2010.
Aerodrome inspection services for remote Indigenous communities
The Remote Aerodrome Inspection Program is a small services contract to conduct annual safety inspections of 59 aerodromes supporting remote Indigenous communities in Northern Australia above the nineteenth parallel. The program provides technical advice and aerodrome reporting officer training to members of the communities.
The 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 standards. Inspection services are contracted to an appropriately qualified service provider. In February 2009 the Department used an open tender process to identify a 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. An option to extend the contract to 30 November 2010 was taken and there is an option to negotiate to extend the contract for another one-year period if desired.
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 services
- professional services, and
- property and office services.
Information and communication technology services
The Department undertook a project to refresh its corporate IT server systems and local area network communications technology. These projects were completed in 2009–10, on schedule and under budget.
The Department has established several panels of professional services providers. The panels are subject to regular review.
The panels cover:
- communication services
- legal services
- financial advisory services and accountancy services
- SAP services
- recruitment services, and
- audit services.
Property and office services
Like most organisations, the Department has a range of contracts and standing offers in place for the supply of property management and maintenance services, and energy, office equipment and other consumables.
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 CEIs and the Infrastructure Procurement Manual.
During 2009–10, 82 new consultancy contracts were entered into, involving total actual expenditure of $6.1 million. In addition, 13 ongoing consultancy contracts were active during the 2009–10 year, involving total actual expenditure of $2.4 million.
Details of consultancies valued at $10,000 or more let in 2009–10 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 www.tenders.gov.au.
Table B.1 Trends in consultancies, 2007–08 to 2009–10
|All consultancies, including consultancies let in previous years|
|New consultancies valued at $10,000 or more|
|Total value over the life of these contracts||$4.8m||$12.9m||$9.9m|
Payments for Advertising and Market Research
In 2009–10, the Department paid $0.3 million for advertising and market research. Table B.2 lists payments of $11,200 or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.
Throughout 2009–10, the Department undertook no reportable advertising campaigns.
Table B.2 Detail of advertising and market research payments of $11,200 or more
|Creative advertising agencies|
|Total creative advertising||-|
|Total market research||-|
|Media advertising organisations|
|Sensis Whitepages||Whitepages listing for the Department||$67,436|
|Sensis Whitepages||White pages listing for Australian Government Regional Information Service||$38,884|
|Adcorp||Expression of Interest for Regional Development Australia (RDA) committee membership in SA (first round)-advertising in newspapers.||$12,590|
|Adcorp||Expression of Interest for RDA committee membership in SA (second round) advertising in newspapers.||$12,981|
|Adcorp||Expression of Interest for RDA committee membership in Queensland advertising in newspapers.||$19,483|
|Adcorp||Advertising in Queensland newspapers for RDA Executive Officers.||$19,602|
|Adcorp||Advertising for staff vacancies||$76,827a|
a This is the combined amount of all recruitment advertising payments in 2009–10