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
  • procurement initiatives to support small business, and
  • payments for marketing research and advertising.

Procurement Policies and Practices

The Department's approach to the procurement of goods and services, including consultancies, is consistent with the requirements of the Commonwealth Procurement Rules. The rules are applied to procurement activities through the Accountable Authority Instructions and supporting operational guidelines. The Department's procurement policies and processes have been developed to help ensure that the Department: undertakes competitive, non-discriminatory procurement processes; uses resources efficiently, effectively, economically and ethically; and makes decisions in an accountable and transparent manner.

As part of these arrangements, the Department published the following on the AusTender website www.tenders.gov.au:

  • a procurement plan providing details of expected procurements for 2014–15
  • details of publicly available procurement opportunities with a value of $80,000 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.

The Department completed a thorough review of all departmental procurement guidance to coincide with the release of the Public Governance, Performance and Accountability Act 2013 which came into effect on 1 July 2014. This was supplemented by targeted training throughout the year to ensure employees were aware of the new requirements and that procurements conducted were compliant with procurement policies.

The Department helps employees manage procurements appropriately by providing information and training on procurement policies and procedures and maintaining a single point of contact for advice on the Commonwealth Procurement Rules, the Accountable Authority Instructions and tendering processes. To ensure that consistent procurement practices are undertaken, the Department adopted use of the Commonwealth Contracting Suite for procurements valued under $200,000 in addition to developing standard departmental tendering and contracting documentation for procurements valued at or above $200,000.

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.

Exempt Contracts

In 2014–15 no contracts were exempted from publication on AusTender on public interest grounds.

Consultancy Contracts

The Department engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to: investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist with the Department's decision-making.

Prior to engaging consultants the Department takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the Public Governance, Performance and Accountability Act 2013 and related regulations including the Commonwealth Procurement Rules and relevant internal policies. Consultancy contracts are identified and reported in accordance with the guidance outlined on the Department of Finance Procurement Policy website www.finance.gov.au/procurement/procurement-policy-and-guidance/buying/reporting-requirements/consultancies-reporting/principles.html.

During 2014–15 109 new consultancy contracts were entered into involving total actual expenditure of $23.76 million. In addition, 29 ongoing consultancy contracts were active during the 2014–15 year involving total actual expenditure of $1.47 million.

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 and consultancies

2010–112011–122012–132013–142014–15
Consultancies
Expenditure on new and ongoing consultancies
Total expenditure $15.4m $19.3m $10.2m $5.6m $25.2m
New consultancies valued at $10,000 or more
Number let 78 72 57 88 97
Total value over the life of these contracts $14.9m $19.8m $4.0m $6.1m $39.0m

Procurement Initiatives to Support Small Business

The Department supports small business participation in the Australian Government procurement market. Small and medium enterprises and small enterprise participation statistics are available on the Department of Finance's website www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/.

To help support small and medium enterprises the Department has adopted the Commonwealth Contracting Suite for low-risk procurements valued under $200,000, in addition to encouraging the use of purchasing cards for procurements valued below $5,000.

The Department recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Businesses are available on the Treasury's website www.treasury.gov.au.

Payments for Advertising and Market Research

In 2014–15 the Department paid $1,002,828 for advertising and market research. Table B.2 lists payments of $12,565 or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.

Throughout 2014–15 the Department undertook no reportable advertising campaigns.

Table B.2  Details of advertising and market research payments of $12,565 or more

Market research/polling
Firm Service provided Payment made in 2014–15
Folk Pty Ltd Quantitative research—Program Design $122,716.00
JWS Research Market research fees $214,720.00
Essence Communications Market research fees $142,505.00
GfK Australia Market research fees $36,315.40
Total market research/polling   $516,255.40
Media advertising organisations
Firm Service provided Payment made in 2014–15
Mitchell And Partners Australia Pty Ltd Print media advertising $22,792.25
Mitchell And Partners Australia Pty Ltd Print media advertising $14,515.84
Total Media advertising organisations $37,308.09

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Last Updated: 7 December, 2015