FMA Act and CPG requirements of procurements under $80,000 – current state

1. FMA Act and CPG requirements of procurements under $80,000 – current state

2. About this document For the first part of the Review and Analysis of Commonwealth Procurement Processes project, ThinkPlace has reviewed and analysed the requirements set by the Financial Management Accountability Act 1997 and Regulations and the Commonwealth Procurement Guidelines (CPG) for non-covered procurements. ThinkPlace will work with a small group of people in Finance to develop an agreed overarching business process model which, based on requirements, represents the Commonwealth procurement process for procurements under the $80,000 threshold. Contents Intent Intent Statement 4 Project approach, activities and timeframes 5 Procurement framework Procurement framework – high level view 7 Procurement framework – detailed view 8 Configuration of the procurement system Process fundamentals 11 Conceptual business process 12 Rules and standards for procurement 13 Regulated (or sound practice) approaches or events 14 Configuration of the procurement system 15 Appendix 17

3. Intent statement A shared understanding** of the objectives, outcome, scope and approach for the project **Cooperatively developed with agencies which participated in the Review on 13 April 2011

4. A standardised, simple and safe process for all FMA agencies conducting procurements that fall under the $80,000 threshold Intent CURRENT STATE FUTURE STATE SYSTEM IN FOCUS • The FMA Act and Regulations set the framework for the proper management of public money and public property in the custody and control of the Commonwealth. • The Commonwealth Procurement • Guidelines (CPGs) articulate the • Government’s expectations for all • department and agencies conducting • procurement. • Agencies have evolved their procurement policies and practices within the context of the agency’s organisational structure, delegations, approval processes etc. • Agency specific policies and procedures are • contained with large and complex volumes of • CEIs, departmental policy documents and • protocols. • Under the FMA Act, 104 FMA agency CEOs have devolved authority to manage public money within their agency. APPROACH FOR BRIDGING THE GAP • Where are we now? • Analysis of ‘2008-09 AUSTENDER statistics indicate 85,000 contracts (over $10,000) were awarded. The total value of these contracts approx. $35bn. • Of those contracts, about 65,000 contracts falling under the $80,000 threshold were awarded. The total value of these contracts was about $12.6bn. • Over 80% of the total number of contracts correspond to about 4% total value. An APS 5/6 can spend up to 80% their time on low value contracts • Low value contracts translate to a high administrative burden • Agencies have tailored procurement approaches reflect organisational structure, authority and delegations, approval processes, risk appetite, level of IT maturity, and resourcing, reporting processes and systems • Procurement functions differ in agencies – some functions are centralised, some are decentralised • Participating agencies have undertaken work to review CEIs, processes and protocols • Whole of Government CEIs are under development • Work has also been undertaken to simplify the standard short form contract, reducing the number of pages from 80 to 6 • What would success look like? • A better practice model for procurements under the threshold that: • Standardises the processacross FMA agencies • Makes it easier for staff to know what to do and how to conduct procurements • Reduces administrative burden • Finance will be able to use the project findings and recommendations as a basis for presenting a better practice model to FMA agencies, where appropriate. • The project will influence agency CEIs and processes • How do we get there? • Analyse and review Commonwealth procurement practices currently employed by selected agencies when conducting procurements under $80,000, identifying issues, pressure points and opportunities for improvement, and on that basis making recommendations for simplifying and streamlining processes. • What do we need to do? • Who do we need to involve? • Finance’s Procurement Policy Branch • Procurement Policy Areas and representatives from line areas DRIVERS FOR CHANGE • Out of scope • The project will not to assess how well agencies implement the CPGs and relevant FMA legislation when undertaking procurements • The project will not redesign policy • What do we need to consider? • Avoid over-engineering or over prescribing • Aim to set a benchmark • Impact on behavioural change • What is the problem/ opportunity? • Agency procurement processes are complex, confusing, and onerous for staff • Requirements vary from agency to agency – processes are not standardised across government • Suppliers are frustrated • Timing • Focussing question • How can we standardise and streamline the process for procurements under the $80,000 threshold, making it less onerous FMA Act agencies, while also maintaining the integrity of the FMA Act? April May June • Intent, planning and agency engagement • CPG process modelling • Agency CEI process mapping • Case study development by agencies • Case study analysis • Synthesis • Design ‘better practice model’

5. AGENCY CASE STUDIES AGENCY SNAPSHOT KEY ACTIVITIES AND TIMEFRAMES Project approach, activities and timeframes • 1. Agency A • Procurement operates on a decentralised basis, where Line Areas handle procurements under $80,000 • The Corporate Procurement Branch is resourced by 70 FTE • Well document procurement policies and procedures • Undertaken some mapping work already and identified opportunities for streamlining processes • 2. Agency B • Governance, Contracts and Services area is resourced by 2 FTE • Reviewed CEIs last year • Issues identified and some new approaches established • 3. Agency C • Procurement operates on a decentralised basis, where Line Areas handle procurements under $80,000. • For procurements above the threshold, the internal Procurement Advice area vets the documentation and provides advice on the process. • The Procurement Policy Branch provides policy advice and guidance to agency central procurement areas. • The Procurement Implementation Branch also provides helpdesk support to other agencies in relation to AusTender. • Choosing your three case studies: • A typical procurement • An example of good practice • An example of a convoluted/ inefficient process • Presentingyour case studies • Describe… • What was procured • How the market was approached (e.g. direct, select) • Contract value • Time taken for procurement process, end to end • Roles involved in the processes (line area, procurement area, delegate,..) • Delegate approval process • Reporting process • Documentation developed • Questions referred to the procurement area (if any)

6. Procurement framework Government requirements for procurement based on FMA Act 1997, Regulations and CPGs

7. Procurement framework – high level view (for FMA agencies) • The Government’s procurement policy framework comprises several legislative and policy elements including the Financial Management Accountability Act and Regulations 1997, and the Commonwealth Procurement Guidelines (CPGs), as well as other legislation which interacts with procurement. • The CPGs are legislative instruments with which agencies must comply. CONSTITUTION LEGISLATION LEGISLATIVE INSTRUMENTS Constitution Act s81-3 All revenue or money raised or received by the Executive Government forms one Consolidated Revenue Fund from which money is appropriated, under provisions of an existing or proposed law Financial Management Accountability (FMA) Act 1997 Provides for the proper use and management of public money, public property and other Commonwealth resources Financial Management Accountability Regulations 1997 Regulations Free Trade Agreements Commonwealth Procurement Guidelines Establish the core procurement policy framework and articulate Government’s expectations for all department and agencies [issued by Finance Minister] POLICY GUIDANCE MATERIAL Finance Circulars Advise Agencies of key changes and developments in the Government’s procurement framework Guidance Documents A range of web-based and printed documents which assist Agencies to implement the Government’s procurement policy AGENCY CONFORMANCE Chief Executive Instructions Operational guidance to agency official on financial management / procurement Policy and Procedural Documents Detailed instructions on procurement practices • Note • FMA Determinations and Orders have not been included in this procurement framework because none at this stage are relevant to procurement • The Good Procurement Practice has not been included in this procurement framework

8. Procurement framework – detailed view (for FMA agencies) • The operative provisions of the Act and Regulation that are relevant for procurement are detailed below. • The outcome that Parliament expects is that Chief Executives promote propose use of Commonwealth Resources, which is defined as efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth. Financial Management Accountability (FMA) Act 1997 Financial Management Accountability Regulations 1997 Regulations Part 7 Special responsibilities of Chief Executives Part 3 Powers of Chief Executives Part 4 Commitments to spend public money • Section 44 • Promoting proper use of Commonwealth resources • A Chief Executive must manage the affairs of the Agency in a way that promotes proper use** of the Commonwealth resources for which the Chief Executive is responsible. • The Chief Executive must comply with this Act, the regulations, Finance Minister’s Orders, Special Instructions and any other law. • **Proper use means efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth • Regulation 6 • Chief Executive Instructions • The Chief Executive of an Agency is authorised to give instructions (to be called Chief Executive’s Instructions) to officials in that Agency on any matter necessary or convenient for carrying out or giving effect to the FMA Act or Regulations • Regulation 7 • Commonwealth Procurement Guidelines • The Finance Minister may issue guidelines (to be called Commonwealth Procurement Guidelines) about procurement policies and processes; requirements regarding the publication of procurement details; requirements regarding entering into procurement arrangements; and the disposal of public property. • Officials performing procurement duties must act in accordance with the CPGs. • Regulation 9 • Approval of spending proposals • An approver must not approve a spending proposal unless the approver is satisfied, after making reasonable inquiries, that giving effect to the spending proposal would be a proper use of Commonwealth resources (within the meaning given by subsection 44 (3) of the Act). • Regulation 10 • Arrangements beyond available appropriation • If the agency has insufficient appropriation of money, a person must not enter into an arrangement unless first approved by the Finance Minister. • Regulation 8 • Entering into an arrangement • A person must not enter into an arrangement unless: • (a) a spending proposal has been approved under regulation 9; and • (b) if required, written agreement has been given under regulation 10 • Regulation 12 • Recording approval of spending proposals • The approval of spending proposals must be made in writing

9. Procurement framework – detailed view (for FMA agencies) • The legislative instruments and Guidance Material that are relevant for procurement are detailed below Commonwealth Procurement Guidelines Establish the core procurement policy framework and articulate Government’s expectations for all department and agencies Division 1 Procurement Principles Applies to all procurement Division 2 Mandatory Procurement Principles (covered) However some provisions will apply to non-covered procurements e.g. market approaches Finance Circulars To advise Agencies of key changes and developments in the Government’s procurement framework Guidance Documents A range of web-based and printed documents which assist Agencies to implement the Government’s procurement policy 2003/02 Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort 2008/10 Procurement 30 Day Payment Policy for Small Business No. 3 Guidance on Confidentiality in Procurement July 2007 No. 14 Guidance on Ethics and Probity in Government Procurement January 2005 2005/12 Definition of Procurement of Construction Services 2006/03 Limited Liability in Information and Communications Technology Contracts No.6 Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort September 2003 No. 15 Guidance on Procurement Publishing Obligations July 2007 2009/10 Use of the Lowest Practical Fare for Official Domestic Air Travel 2009/11 Best Fare of the Day for International Official Air Travel No. 10 Guidance on Complying with Policies of the Commonwealth in Procurement November 2010 No. 13 Guidance on the Mandatory Procurement Procedures January 2005 2011/01 Commitments to spend public money (FMA Regulations 7 to 13)

10. Configuration of the procurement system Process fundamentals Conceptual business process Rules and standards for procurement Regulated (or sound practice) approaches or events Configuration of the procurement system

11. Process fundamentals • Procurementencompasses the end-to-end process of acquiring goods or services. A generic procurement process is much the same, whether you are buying stationery or professional services. • Procurement Officials and Delegates have roles and responsibilities under the FMA Act and CPGs. • Specifically, under s. 44 of the FMA Act Chief Executives are required to promote the efficient, effective and ethical use of Commonwealth resources. For procurement, this responsibility is mainly discharged by ensuring their agencies have appropriate policies, procedures and guidelines in place to achieve value for money. • From agency to agency, procurement practices vary as the requirements of the FMA Act and CPGs are translated into agency specific Chief Executive instructions (CEIs) and operational procedures to ‘fit’ the context of the organisation. Approver/ Delegate Procurement Official Suppliers Identify need for procurement Outcome Proper use of Commonwealth resources Efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth As stated in the FMA Act 1 Assess existing arrangements for suitability 2 PROCUREMENT PRACTICES VARY FROM AGENCY TO AGENCY Go to market 3 Evaluate and enter contract 4 Receive good(s)/ service(s) 5

12. Conceptual business process The high level process for procurements under $80,000 (derived from the current requirements set by the FMA Act and CPGs). Starts with an identified procurement need and ends with the acceptance of the goods/ services Triggered by a business need or external drivers Scope End No (grant) Value the procurement Define procurement need Determine best approach CPG Div 2; CEIs > $80,000 Yes 2 < $80,000 Reg 9 Pre-approval Open tendering Seek pre-approval Identify existing arrangements 3 No Select tendering Use existing arrang’t? Is proc’t best way? Value? Proc’t method ? i.e. Coordinated; cooperative and internal End Direct sourcing 3 Yes 2 Write specifications Issue request Receive submissions Documentation [CPGs 7.8 – 7.12] Delegations and approval processes [s. 12 FMA Act] [Regs 8, 9, 10, 12] Identify and manage risks [CPGs 6.8-6.10] Reporting [Annual Procurement Plans CPGs 7.15-7.16, AusTender CPGs 7.24] 4 Reg 8, 9, 10 CPG 7.23 CPG 7.24 Assess submission(s) Identify successful supplier Seek approval from Delegate Inform all applicants of decision Enter arrangement/ contract Report AusTender 4 5 Accept good/ service Pay for good/ service End 5 1Goods/ services identified 2 In accordance with conditions specified in the contract 3 Assumes pre-approval 4For contract value over $10,000 5 Out of scope: dealing with complaints, audits, warranty claims, contract management, disposal of goods

13. Rules and standards for procurement LEGEND • The CPGs (Div. 1 - Procurement Principles) prescribe a number of business rules (“must”, “should”) and standards (“need”) that govern the way agencies conduct procurements. Appendix 1 contains a detailed listing. • There are 21 discreet “musts” or obligations with which agencies must comply. There are 20 discreet “shoulds” or matters of sound practice, and 10 discreet “needs” or standards. • The observation is that regulation of the system is mainly geared towards ‘Accountability and Transparency’, and is also an indication of what is driving agency behaviour. Obligations which must be complied with must Matters of sound practice should A “standard” need must should need Value for money 1 1 4.1 4.3 Encouraging competition 5.2 5.5 2 3 1 5.3 5.7 5.4 5.8 Efficient, effective, ethical use of resources 6.8 6.12 6.15 6.20 6.22 3 7 3 6.9 6.13 6.16 6.21 6.10 6.14 6.19 6.21 Accountability and Transparency 15 10 5 7.2 7.10 7.16 7.19 7.21 7.23 7.28 7.31 7.34 7.34 7.34 7.12 7.17 7.20 7.22 7.9 7.24 7.29 7.32 7.34 7.9 7.15 7.18 7.21 7.23 7.34 7.26 7.30 7.33 7.34 21 20 100 51 • Note • Clause 4.1 is treated as a ‘must’. 42% 39% 19% 100%

14. Regulated (or sound practice) approaches or events • The CPG requirements relate to the way in which procurements are conducted (e.g. risk management) and to particular procurement events e.g. request documentation, reporting) Request Documentation VALUE FOR MONEY 4.1 4.3 Non-discrimination Competitive processes ENCOURAGE COMPETITION 5.2 5.4 5.7 5.8 5.3 5.5 EFFICIENT, EFFECTIVE, ETHICAL USE OF RESOURCES Risk management Limiting contractor’s liability Ethics 6.8 6.10 6.12 6.15 6.20 6.21 6.9 6.13 6.16 6.21 6.22 6.14 ACCOUNTABILITY AND TRANSPARENCY Open, transparent processes Documentation Disclosure- APPs Disclosure- Notification 7.2 7.9 7.10 7.15 7.17 7.19 7.9 7.12 7.16 7.18 7.20 Disclosure- Process Disclosure- Treatment of confidential info Dealing with complaints Disclosure- Other Obligations 7.23 7.21 7.22 7.33 7.34 7.34 7.21 7.23 7.26 7.34 7.34 7.28 7.31 Disclosure- Reporting 7.34 7.34 7.29 7.32 7.30 7.24

15. Configuration of the procurement system • The requirements, rules and standards set out by the FMA Act and the CPGs configure the way the ‘procurement system’ operates in practice and drive the performance of the system. • In the absence of legislative change, agencies need to find ways to simplify and streamline their practices within a regulated system. • The observation is that there is a disconnect between the desired outcome stated in the FMA Act (i.e. proper use of Commonwealth resources) and the core principle underpinning the Australian government procurement. Rule set Procurement Process Outcome Proper use of Commonwealth resources Efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth As stated in the FMA Act

16. Appendix

17. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Value for money Value for money Value for money is the core principle underpinning the Australian government procurement. In a procurement process this principle requires a comparative analysis of all relevant costs and benefits of each proposal throughout the whole procurement cycle (whole-of-life costing). Request documentation Request documentation needs to specify logical, clearly articulated, comprehensive and relevant conditions for participation and evaluation criteria. This enables identification, assessment and comparison of the costs and benefits of all submissions on a fair and common basis over the whole procurement cycle. 4.1 4.3 Encouraging competition Non-discrimination Procurement methods must not discriminate against potential suppliers due to their degree of foreign affiliation or ownership, location or size. The property or services on offer must be considered on the basis of their suitability for their intended purpose and not on the basis of their origin. Non-discrimination- SMEs Agencies need to ensure that SMEs have appropriate opportunities to compete for business 5.2 5.5 Competitive Procurement Processes Participation costs (agencies and potential suppliers) should be considered when determining a process commensurate with the scale, scope and relative risk of the proposed procurement. 5.7 Non-discrimination- SMEs Officials undertaking procurement should ensure that procurement methods do not unfairly discriminate against SMEs. 5.3 Competitive Procurement Processes Specific procedures must be followed for covered procurements. These procedures, which further encourage competition and in many circumstances require an open approach to the market, are outlined in Division 2 [OUT OF SCOPE]. 5.8 Non-discrimination- SMEs Agencies should seek to ensure that procurement processes are readily communicated and accessible to SMEs and should not take action to deliberately exclude SMEs from participating. 5.4

18. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Efficient, effective, ethical use of resources Risk Management Risk management should be built into an agency’s procurement processes. Agencies should ensure that appropriate procedures are in place to identify and consider all relevant risks throughout the procurement cycle. Limiting a Contractor’s Liability to the Commonwealth When considering a limit on a supplier’s liability, agencies should note that arrangements to limit liability can carry direct or indirect costs which must be considered within the determination of value for money. Similarly, if a risk assessment determines it would be appropriate to require a supplier to accept unlimited liability, value for money impacts need to be considered. Ethics Agencies need to ensure that officials involved in procurement: a. recognise and deal with any conflicts of interest, including perceived conflicts of interest; b. deal with suppliers and potential suppliers even-handedly; c. consider seeking advice where probity issues arise; d. do not compromise the Australian Government’s standing by accepting inappropriate gifts or hospitality; e. are scrupulous in their use of public property; and f. comply with all duties and obligations including the agency’s CEIs in relation to gifts or hospitality, the information privacy principles of the Privacy Act 1988, the security provisions of the Crimes Act 1914 and, where applicable, the Australian Public Service’s Code of Conduct as set out in the Public Service Act 1999. 6.8 6.14 6.19 Risk Management Agencies should generally not accept risks which another party is better placed to manage. Similarly, where an agency is best-placed to manage a particular risk, it should not seek to inappropriately transfer that risk to a supplier. 6.9 Limiting a Contractor’s Liability to the Commonwealth Agencies should develop and implement a risk management plan if it decides to limit a contractor’s liability, through a liability cap or indemnity, based on an assessment of the risks and value for money considerations. 6.15 Risk Management Agencies need to carefully monitor the terms and conditions, including pricing, on which risk allocations are determined, to ensure that they reflect value for money. 6.10 Limiting a Contractor’s Liability to the Commonwealth Agencies must undertake a risk assessment to inform any decision about whether limiting a contractor’s liability through a liability cap or indemnity would be appropriate, and if so, what limits may be suitable. 6.12 Limiting a Contractor’s Liability to the Commonwealth For more complex procurements, request documentation should include a draft contract with clear liability provisions. Potential suppliers should be required to indicate compliance with the entire contract, including liability provisions, and separately identify any clauses of non-compliance or partial compliance, clearly providing details and costs for any alternative clauses. 6.16 Ethics Agencies should include contract provisions requiring contractors to comply with materially relevant laws and should, as far as practicable, require suppliers to apply such a requirement to sub-contractors. Contractors must also be able to make available details of all sub-contractors engaged in respect of the procurement contract. 6.20 Limiting a Contractor’s Liability to the Commonwealth Agencies must undertake a risk assessment to inform any decision about whether limiting a contractor’s liability through a liability cap or indemnity would be appropriate, and if so, what limits may be suitable. 6.13

19. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Efficient, effective, ethical use of resources Ethics Agencies must not enter into contracts with suppliers who have had a judicial decision against them (not including decisions under appeal) relating to employee entitlements and have not paid the claim. Ethics Agencies should seek to confirm a tenderer has no such unsettled judgements by seeking a declaration on the matter from all tenderers. Ethics Agencies mustnot seek to benefit from supplier practices that may be dishonest, unethical or unsafe. 6.21 6.21 6.22 Accountability and Transparency Open, transparent, justifiable processes Agencies need to have procedures in place to ensure that procurement processes are conducted soundly and that procurement related actions are documented, defensible and substantiated in accordance with legislation and government policy. Documentation Documentation relating to procurement must be retained for a period of three years or for a longer period if required by legislation or other reason for a specific procurement. In addition, the Archives Act 1983 sets out requirements in relation to Commonwealth records, including dealings with, and access to, such records. Disclosure-Annual Procurement Plans Agencies must publish on AusTender, by 1 July each year, an Annual Procurement Plan (APP) to draw suppliers’ early attention to potential procurement opportunities. 7.2 7.10 7.15 Disclosure-Annual Procurement Plans The APP should contain a short strategic procurement outlook for the agency supported by details of any planned procurement. The detail should include the subject matter of any planned procurement and the estimated date of the publication of the approach to the market. 7.16 Documentation Agencies must maintain appropriate documentation for each procurement. The appropriate mix and level of documentation depends on the nature and risk profile of the procurement being undertaken. 7.9 Documentation Agencies should ensure there is a written contract with the supplier in a procurement process. Where a written contract does not exist, agencies should ensure that sufficient written documentation or a written contract is formulated as soon as practicable. For low value, routine purchases a purchase order would be considered sufficient documentation. 7.12 Documentation Agencies need to ensure there is sufficient documentation to provide an understanding of the reasons for the procurement, the process that was followed and all relevant decisions, including approvals and authorisations, and the basis of those decisions. 7.9

20. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Accountability and Transparency Disclosure- Notification Agencies must publish all open approaches to the market on AusTender. Relevant documentation providing information on the approach to market must also be available, to the extent practicable, for download from AusTender. Disclosure- Notification For select tenders, agencies must issue all invitations to tender electronically and, to the extent practicable, make tender documentation available electronically to all potential suppliers that are invited. Electronic invitations may also be supplemented by other documented forms of invitation. Disclosure- Process On request, debriefings should also be provided to successful tenderers. 7.17 7.20 7.23 Disclosure- Reporting Agencies must report on AusTender all Commonwealth contractand agency agreements, including standing offer arrangements and amendments to these arrangements, which meet the contract reporting criteria in Guidance on Procurement Publishing Obligations. 7.24 Disclosure- Notification If an agency advertises an open approach to the market through other avenues, such as print media, the details selected for inclusion in the notification must be the same as those contained in AusTender. Advertising an open approach to the market through other avenues does not diminish the requirement to publish the approach on AusTender. Disclosure- Process Agencies need to promptly provide, on request, to any potential supplier, documentation that includes all information necessary to permit potential suppliers to prepare and lodge submissions. 7.18 7.21 • Disclosure - Other Obligations • To enhance transparency, agencies must make available on request, the names of any sub-contractor engaged by a contractor in respect of a Commonwealth contract for procurement. • a. Agencies must require contractors to agree to the public disclosure of the names of any sub-contractors engaged to perform services in relation to a Commonwealth contract for procurement. • b. Contractors must be required to inform relevant sub-contractors that the sub-contractor’s participation in fulfilling a Commonwealth contract for procurement may be publicly disclosed. 7.26 Disclosure- Process Agencies must, to the extent practicable, use AusTender to make request documents available. 7.21 Disclosure- Notification Where an agency is required to publish any other notification, request documentation, or any other document on AusTender, the information in any other form (for example, a printed version) of the document must be the same as that published on AusTender. 7.19 Disclosure- Process Where an agency rejects a potential supplier’s submission, the agency must promptly advise them, and on request provide a written explanation for that rejection. 7.22 Disclosure- Process Following the award of a contract, agencies must promptly inform all tenderers of the tender decision and on request provide an unsuccessful tenderer with the reasons its submission was not successful. 7.23

21. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Accountability and Transparency Disclosure - Treatment of Confidential Information When conducting a procurement and awarding a contract, agencies should take appropriate steps to protect the Commonwealth’s confidential information. This includes observing legal obligations such as under the Privacy Act 1988 and statutory secrecy provisions. • Disclosure- Treatment of Confidential Information • The need to maintain the confidentiality of information should always be • balanced against the public accountability requirements of the Australian Government. It is therefore important for officials to plan for and facilitate appropriate disclosure of procurement information. In particular, officials should: • a. include provisions in request documentation and contracts that alert prospective suppliers to the public accountability requirements of the Australian Government, including disclosure to the Parliament and its committees; • b. where relevant, include a provision in contracts to enable the Australian National Audit Office to access contractors’ records and premises to carry out appropriate audits (model access clauses have been developed for agencies to tailor and, where appropriate, incorporate into relevant contracts); • c. consider, on a case by case basis, any request by a potential supplier for material to be treated confidentially after the award of a contract, only entering into commitments to maintain confidentiality where these are appropriate; and • d. be aware of the requirement for the disclosure of information consistent with the Freedom of Information Act 1982. Disclosure- Treatment of Confidential Information Where confidential information is required to be disclosed, for example following a request from a Parliamentary committee, reasonable notice in writing must be given to the party from whom the information originated. 7.28 7.31 7.32 Dealing with Complaints Procurement processes need to be based on clearly articulated and defensible evaluation criteria consistent with the procurement policy framework. Agencies’ actions in undertaking procurement processes must be robust and defensible. 7.33 Disclosure- Treatment of Confidential Information Agencies should therefore ensure that where it is necessary for potential suppliers to have access to confidential information for the purpose of preparing a submission that appropriate steps are taken to ensure that potential suppliers maintain the confidentiality of that information 7.29 In the event that a complaint is received agencies should aim to manage this process internally, where possible, through communication and conciliation with the tenderer or supplier. 7.34 Agencies must apply fair, equitable and non-discriminatory complaint handling procedures. Disclosure - Treatment of Confidential Information Agencies should ensure that potential suppliers’ submissions are treated as confidential prior to the award of a contract and that unsuccessful submissions are kept confidential after the award of the contract to a supplier. 7.34 7.30 The procedures should take account of the following: 7.34 a. the process needs to be systematic and well understood by the parties involved; 7.34

22. Appendix 1. Rules and standards for procurement LEGEND Obligations which must be complied with CPG – detailed clauses must Matters of sound practice should A “standard” need Accountability and Transparency • Dealing with Complaints • b. senior management and officials independent of the process should be involved as appropriate; • c. complaints should be dealt with in writing; 7.34 • d. each party must have sufficient time to appropriately respond to developments (no less than 10 days, unless urgent); • e. if a matter has been referred to an external body for review, agencies may be required to provide all relevant documents to that body as required by law; and • f. agencies must ensure that the initiation of a complaint process does not prejudice a supplier’s or a potential supplier’s participation in future procurement processes. 7.34

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