Appendix B: Procurement practices

Procurement practices

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

  • procurement policies and practices
  • Indigenous procurement
  • Australian National Audit Office access clauses and exempt contracts
  • use of consultancies
  • initiatives to support small business
  • payments for advertising and marketing research

Procurement policies and practices

In 2017–18, the department continued its focus on delivering procurement solutions that support our objectives and operational needs. The department is committed to compliant and transparent procurement processes and achieving value for money.

The department's procurement of goods and services is consistent with the requirements of the Commonwealth Procurement Rules (CPRs), including achieving value for money and using resources in a proper manner. The CPRs are applied to procurement activities through the Accountable Authority Instructions (AAIs) and supporting operational guidelines.

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.

In accordance with the CPRs, the department published open tenders and details of contracts awarded on the AusTender website at www.tenders.gov.au.

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. The department provided internal training, advertising, and news bulletins on the intranet for purchasing officers. An expo was held for the portfolio in August 2017 to showcase a number of Indigenous suppliers to purchasing officers within the department. In 2017–18, the department awarded 67 contracts to Indigenous businesses (target 48 contracts).

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 2017–18, 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 to provide specialist or professional advice, investigate or diagnose a defined issue or problem, and where required, to undertake independent research, reviews or assessments.

During 2017–18, 104 new consultancy contracts were entered into involving total actual expenditure of $8.75 million. In addition, 49 ongoing consultancy contracts were active during the period, involving total actual expenditure of $22.16 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
2013–142014–152015–162016–172017–18
Consultancies
Expenditure on new and ongoing consultancies
Total expenditure $5.6m $25.2m $34.3m $28.0m $30.91m
New consultancies valued at $10,000 or more
Number let 88 97 84 116 101
Total value over the life of these contracts $6.1m $39.0m $10.7m $29.2m $33.28m

Procurement and initiatives to support small business

The department supports procurement from small and medium sized enterprises (SME) in the Australian market. Statistics on SME use are available on the Department of Finance's website at www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/.

The department's measures to support SMEs include:

  • using standardised contracts for low-risk procurements valued under $200,000
  • using an electronic invoice processing system
  • implementing the Indigenous Procurement Policy, noting that many Indigenous businesses are SMEs
  • using of credit cards for procurements valued below $10,000
  • complying with the government's Supplier Pay on Time or Pay Interest Policy

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 at www.treasury.gov.au.

Payments for advertising and market research

In 2017–18 the department paid $158,110 for advertising and market research. Table B.2 lists payments of $13,200 (inclusive of GST) or more made during the financial year, as required by section 311A of the Commonwealth Electoral Act 1918.

During the year the department undertook no reportable advertising campaigns.

Table B.2 Details of advertising and market research payments of $13,200 or more
Market research/polling
Firm Service provided Payment made in 2017–18
NIL
Total market research/polling

$0

Media advertising organisations
Firm Service provided Payment made in 2017–18
Dentsu Mitchell Public Notices (various) $13,548
Dentsu Mitchell GradAustralia Package $16,207
Explore Careers Teber Pty Ltd Explore Careers Diversity Package $18,150
Total media advertising organisations   $47,905

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Last Updated: 12 November, 2018