The National Capital Authority’s contracting procedures have been lacerated in a damning report from the Commonwealth Auditor-General.
The audit found the NCA failed to go to open and competitive tenders enough, broke Commonwealth procurement rules and kept such poor records that it could not show value for money across its multi-million dollar procurement activities.
The Australian National Audit Office included 327 contracts worth $70 million entered into during 2019-20 and 2020-21 in its audit, focusing on a sample of 42 contracts.
These included a five-year $20.2 million contract to deliver open space management services, a five-year $7.4 million contract to operate and maintain Scrivener Dam and a four-year $7 million contract for pay parking operations on National Land.
The audit found the majority (64 per cent) of procurements valued above the $80,000 Commonwealth procurement rules threshold did not involve open competitive approaches.
Even when open tenders were conducted, it was common for the documents to be framed in such a way as to limit the extent of effective competition.
“Where suppliers were directly approached, the pool of potential tenderers was often limited to those previously engaged by the NCA, or described by the NCA as being known to the NCA or its advisers,” the audit concluded.
In 40 per cent of the contracts, either the request documentation did not include any evaluation criteria or there were no records of the request documentation on file.
The audit found just over half of the contracts were awarded to the candidate who showed the best value for money, and procurements failed to meet a consistent ethical standard.
In 39 per cent of the contracts, evaluation team members failed to complete conflict of interest declarations.
Where advisers were appointed during the procurement process, it was common for conflict of interest declarations to be missing and no clear statement about the extent of their involvement.
Inadequate record-keeping also puts the probity of procurement processes in doubt.
The audit said the NCA did not maintain records matching the scale, scope and risk of the procurement, and it was common for there to be gaps in the records of the planning and conduct of procurements.
The reporting of contracts and amendments on AusTender largely did not comply with the procurement rules, with only 10 per cent being accurately reported within the required timeframe.
In a third of the contracts examined, services or works started before the contract was signed.
The audit made eight recommendations covering improving and strengthening how the NCA conducts procurement, oversight and record keeping.
The NCA said it was implementing a number of new arrangements and educating staff in response to the audit.
It attributed the failings, in part, to a complex ageing heritage asset base and operating in a relatively specialised area, often with “unique or bespoke” equipment and/or requirements.
“Over many years, staff have built a solid knowledge of the various areas of operations,” the NCA said.
“NCA officers use this knowledge to optimise the best approach to maintain Commonwealth assets effectively and efficiently.
“As such, procurement processes are designed to deliver the best results often within narrow markets of specialist skills and expertise. On occasion, assets fail unpredictably, requiring that procurement activities be reactive, responding to unforeseen and unprogrammed events or driven by a situation that must be addressed immediately.”