Australian National Audit Office finds Commonwealth ICT panels lax

The Australian National Audit Office has made four recommendations aimed at improving compliance with the Commonwealth Procurement Rules to ensure officials have sufficient understanding of procurement requirements.

In 2018-19 Australian government expenditure on ICT related goods and services was over $3.9 billion. The use of procurement panels and arrangements is intended to achieve efficiency and reduce risk, while supporting the achievement of value for money. Previous audits have
identified shortcomings with respect to some entities’ application of the Commonwealth Procurement Rules (CPRs).

According to the ANAO three procurement arrangements were examined in this audit, the IT Services panel; the Digital Marketplace panel; and the IBM Whole of Australian Government Arrangement.

The combined reported value of contracts under the arrangements was valued at over AU$2.8 billion. The audit examined the establishment of these arrangements and seven entities’ use of the three arrangements.

The ANAO found in establishing the three selected ICT related procurement panels and arrangements, Infrastructure and DTA could not fully demonstrate that the arrangements supported the achievement of value for money outcomes.

In their use of the 15 selected ICT related procurement panels and arrangements, entities could demonstrate that the majority of procurements supported the achievement of value for money outcomes, however in three cases it was difficult for entities to demonstrate this due to the absence of competition.

When using such arrangements, entities need to adopt processes that are not just technically compliant with the CPRs but are also consistent with their intent, which is to drive value for money through competition.

The Auditor-General made four recommendations aimed at improving compliance with the CPRs and ensuring officials have sufficient understanding of procurement requirements.

Recommendations include:

• The Digital Transformation Agencyensures that when establishing procurement panels suppliers are treated equitably and are appointed on the basis of a value for money assessment in accordance with the requirements of the CPRs.
• The Digital Transformation Agency ensures that officials undertaking complex procurements have sufficient understanding of the procurement requirements, the nature of the arrangement being established and procurement related risks.
• The Department of Home Affairs and the Department of Industry, Science, Energy and Resources give greater consideration to competition when selecting suppliers from a panel, particularly in the case of high value procurements or where there is likely to be a substantial increase in the value of a procurement, to drive value for money.
• The Australian Taxation Office ensure limited tender is used only where the conditions for limited tender outlined in the CPRs are met.