A parliamentary inquiry will examine the procurement culture in Canberra after a string of damning audits exposed a failure by federal government departments and agencies to obey mandatory requirements.
The Joint Committee of Public Accounts and Audit opened the probe last Friday to “examine ways to improve transparency, efficiency and value for money in Commonwealth procurement”, focusing on five recent audits.
The inquiry comes less than two weeks after the Digital Transformation Agency was slammed by the Australian National Audit Office for its procurement practices, which were found to have fallen “short of ethical requirements”.
The audit, which examined the DTA’s most costly ICT-related procurement between 2019 and 2021, found the agency regularly bypassed the Commonwealth Procurement Rules and sourced directly from suppliers.
Such an approach was taken with the myGov upgrade, with the DTA approaching Deloitte directly for a contract that has since climbed to $28 million – or $45 million when considering other related contracts.
“The DTA’s frequent direct sourcing of suppliers using panel arrangements does not support the intent of the CPR’s including the achievement of value for money,” the audit released last month said.
The ANAO’s scathing report on the Industry department’s procurement of delivery partners for the Entrepreneurs’ Programme, labelled “deficient in significant respects” in June, will also be considered as part of the inquiry.
The audit found the $160 million procurement did not comply with the CPRs, with the 55 tenders for the work not treated fairly or equitably and large incumbents given an unfair advantage. The department also made “tailored arrangements” to select Deloitte for a $32 million contract.
Audits into the management of the Civil Maritime Surveillance Services contract, Defence’s procurement of six evolved Cape class patrol boats and the procurement of the National Capital Authority will also form the basis for the inquiry.
According to the terms of reference for the new inquiry, the committee will investigate “any matters contained in or connected with” the five audits “with a view to improving the culture of how procurement rules and guidelines are implemented”.
It will likely build on changes to CPRs introduced by the federal government since arriving in May, including the new requirement that government buyers approach multiple supplies on a standing offer arrangement.
Announcing the inquiry, Labor MP and committee chair Julian Hill said the ANAO in recent years has “too often found that Commonwealth agencies have failed to follow both the letter and the spirit of the CPRs”
“There appears a concerning pattern of agencies cutting corners or interpreting the rules to suit themselves and make life easier for themselves, rather than apply the rules and let more people and firms bid for Commonwealth work,” he said on Tuesday.
“Maintaining efficient, effective, economical and ethical procurement practices will always be a challenge for governments, and the committee hopes to identify how Commonwealth procurement practices can be improved to deliver better value for money.”
Mr Hill told InnovationAus.com that while the inquiry will explore the findings of all five audits, the recent DTA audit was “particularly concerning” and that matters raised would be explored in a “very public way”.
He said the committee would seek to “amplify the work of the Auditor General”, who “appears in these reports to be frustrated”, and make further recommendations for change.
The committee will take submission to the Commonwealth procurement inquiry until Friday November 11.
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