Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

On behalf of the Joint Select Committee on Government Procurement, I present the committee's report entitled Buying into our future: review of amendments to the Commonwealth Procurement Rules.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—The Joint Select Committee on Government Procurement was established on 1 December 2016 to inquire into the Commonwealth Procurement Framework—in particular, the amended Commonwealth Procurement Rules. Amendments to the CPRs came into effect on 1 March 2017. The aim of the amendments is to make sure that the full benefits of Commonwealth procurement flow into the Australian economy. It will also ensure that Australian regulations and standards are upheld. The amendments are designed to mitigate the disadvantage faced by Australian suppliers accessing government procurement opportunities.

The evidence received by the committee showed overall support for the amendments to the CPRs. However, there are concerns over effective implementation. Many of the new clauses lack clarity or leave too much to the discretion of officials. The committee has made suggestions to tighten up the clauses by refining and expanding the terms. The committee heard about several problems with the implementation of the previous CPRs, including: a procurement culture that focused on lowest cost rather than value for money; a lack of accountability and transparency; and unacceptable risk-shifting. Also, there is a perception that due to a lack of technical skill and expertise the government has become an uninformed purchaser. The absence of a requirement to comply with Australian standards is considered another deficiency.

There are several flow-on risks that may be detrimental to Australia more broadly. These include: the loss of a skilled workforce; safety; economic and environmental risks; and potential wastage. Of real concern to the committee is the possibility that the procurement system itself may present barriers for domestic businesses attempting to take advantage of procurement opportunities.

The committee considers that comprehensive guidelines are essential to address the current deficiencies and to ensure successful implementation of the new clauses. New guidelines are required to remove the discretionary nature of decision-making and replace it with specific standards that must be met. The guidelines should also mandate the evidence required from tenderers. In particular, an explicit definition is required for 'economic benefit' and a weighting system to properly assess suppliers' claims. Additionally, the committee considers that procurement-connected policies are needed to provide guidance for environmental sustainability and human rights. These guidelines and policies should be supplemented with a Public Service-wide training program. Improved record-keeping is essential to address the lack of transparency and accountability in the current system.

Contract management is another area that the committee would like to see better utilised to control implementation and maximise procurement and contract outcomes. Good contract management ensures that tenderers meet their obligations and responsibilities. If the amended CPRs are to encourage Australian suppliers, the Australian government must not enter into international trade agreements which diminish the benefits that underpin these amendments. Additionally, procurement officers must be better informed of the exemptions currently available in international agreements to preference domestic businesses. The committee was made aware of a range of best-practice models available for Australia to draw on and improve our procurement system.

The committee believes that a three-pronged approach is necessary to address the implementation issues identified in this report and to ensure that new rules are applied consistently, transparently and to maximum effect. We would like to see:

Accordingly, the committee has made 16 recommendations to that effect. On behalf of the committee, I commend the report to the House.

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