Appendix B—Procurement Practices and Outcomes

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 marketing research and advertising.

Procurement Policies and Practices

The Department's approach to the procurement of goods and services, is consistent with the requirements of the Commonwealth Procurement Rules, including the need to achieve value for money in all purchases. 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 2015–16
  • 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.

To ensure timely contract reporting, the Department has trained employees on the required processes for AusTender contract publication. The Department assists employees to 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.

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 2015–16 no contracts were exempted from publication on AusTender on the basis that it would disclose exempt matters under the Freedom of Information Act 1982.

Consultancy Contracts

The Department engages consultants when specialist expertise, 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.

The Department's procurement solution requires that all consultancies are approved by an appropriate financial delegate and that the central procurement unit reviews all consultancies valued at $10,000 and over.

During 2015–16, 93 new consultancy contracts were entered into involving total actual expenditure of $6.6 million. In addition, 31 ongoing consultancy contracts were active during the period, involving total actual expenditure of $27.7 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

 2011–122012–132013–142014–152015–16
Consultancies
Expenditure on new and ongoing consultancies
Total expenditure $19.3m $10.2m $5.6m $25.2m $34.3m
New consultancies valued at $10,000 or more
Number let 72 57 88 97 84
Total value over the life of these contracts $19.8m $4.0m $6.1m $39.0m $10.7m

Procurement and Initiatives to Support Small Business

The Department supports small business participation in the Commonwealth 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 credit 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 2015–16 the Department paid $9,518,283 for advertising and market research. Table B.2 lists payments of $12,700 or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.

During 2015–16, the Department conducted the Building our Future advertising campaigns.

Further information on the campaign is available at infrastructure.gov.au/department/publications/building-our-future-campaign-certification.aspx and in the reports on Australian Government advertising prepared by the Department of Finance at www.finance.gov.au.

Table B.2 Details of Advertising and Market Research Payments of $12,700 or More

Creative Advertising Agencies
Firm Service provided Payment made in 2015–16
Bristow Cornwell Moreland Pty Ltd Creative services $1,640,858
Total creative advertising agencies   $1,640,858
Market research/polling
Firm Service provided Payment made in 2015–16
JWS Research Pty Ltd Concept testing market research $250,921
Wallis Consulting Group Pty Ltd Market research $147,880
Total market research/polling   $398,801
Media advertising organisations
Firm Service provided Payment made in 2015–16
Dentsu Mitchell Print media advertising $32,802
Dentsu Mitchell Print media advertising $16,416
Dentsu Mitchell Print media advertising $16,235
Dentsu Mitchell Media buy $7,181,227
McArthur Print media advertising $48,490
Total media advertising organisations   $7,295,169

Prev. Index Next

Print

Last Updated: 12 December, 2016