Appendix B: Procurement practices

This appendix focuses on the Department's procurement practices, including:

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

Procurement policies and practices

The Department's procurement of goods and services is consistent with the requirements of the Commonwealth Procurement Rules (CPR), including achieving value for money and using resources in a proper manner. The rules are applied to procurement activities through the Accountable Authority Instructions (AAIs) and supporting operational guidelines. The Department's procurement policies and processes have been developed to ensure compliance with the CPRs and decisions are made in an accountable and transparent manner.

In accordance with the CPRs, the Department published the following on the AusTender website

  • a procurement plan providing details of expected procurements for 2016–17;
  • 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 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 CPRs, the AAIs and tendering processes.

Indigenous procurement

The portfolio is committed to the Indigenous Procurement Policy. The policy seeks to have at least three per cent of purchasing activity sourced from Indigenous suppliers. While the target for 2016–17 was 48 contracts for the portfolio, 69 contracts with a total value of $7.4 million was achieved representing 4.3 per cent of all purchasing activities being sourced from Indigenous suppliers. In addition to internal training, advertising, and news bulletins on the Departments intranet, an expo was held in February 2017 to showcase a number of Indigenous suppliers to purchasing officers within the Department. 

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 2016–17, 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 provide probity or audit services; undertake valuations; investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; develop frameworks for benchmarking; or provide independent advice 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 CPRs and relevant internal policies.

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 2016–17, 126 new consultancy contracts were entered into involving total actual expenditure of $16.4 million. In addition, 28 ongoing consultancy contracts were active during the period, involving total actual expenditure of $11.6 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

Table B.1 Trends and consultancies
Expenditure on new and ongoing consultancies
Total expenditure $10.2m $5.6m $25.2m $34.3m $28.0m
New consultancies valued at $10,000 or more
Number let 57 88 97 84 116
Total value over the life of these contracts $4.0m $6.1m $39.0m $10.7m $29.2m

Procurement and initiatives to support small business

The Department supports small business participation in the Commonwealth Government procurement market. Small and medium sized enterprise (SME) and small enterprise participation statistics are available on the Department of Finance's website

The Department's measures to support SMEs include:

  • use of the Commonwealth Contracting Suite for procurements valued under $200,000, which is designed to minimise the burden on business contracting with Government; and
  • 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

Payments for advertising and market research

In 2016–17, the Department paid $402,450 for advertising and market research. Table B.2 lists payments of $13,000 (inclusive of GST) or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.

During 2016–17, the Department undertook no reportable advertising campaigns.

Table B.2 Details of advertising and market research payments of $13,000 or more
Market research/polling
Firm Service provided Payment made in 2016–17
Wallis Consulting Group Benchmark and evaluation services $30,591
Colmar Brunton Benchmark and evaluation services $97,250
GfK Australia Benchmark and evaluation services $98,276
AMR Interactive Pty Ltd Evaluation and media research services $101,502
Total market research/polling $327,619
Media advertising organisations
Firm Service provided Payment made in 2016–17
Dentsu Mitchell Public Notices (various) $13,147
Total media advertising organisations $13,147

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Last Updated: 20 November, 2017