2 June 2022

Auditor-General blasts NCA procurement practices

| Ian Bushnell
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Old Parliament House

The National Capital Authority is responsible for National Land in the ACT. Photo: Thomas Lucraft.

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.

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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.

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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.”

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I can understand why you would choose ‘the devil you know’ (assuming you do know them as well as you think) for something like maintenance of Scrivener Dam given there were concerns about that dam’s structural integrity not so long ago. Very significant consequences if you get that one wrong.

That said, maybe we need to start talking about centralising procurement management. The current system, where every tiny little agency has to have people who understand the procurement rules, is ridiculous, and even if they do understand the rules they will be sorely tempted to take risks as apparently has happened at the NCA.

mpad the Commonwealth did have a central building and maintenance mob.
It was called the Department of Works.
It were disbanded by the Feds some decades ago.
Regret have forgotten what mob did the disbanding.

Stephen Saunders5:30 pm 04 Jun 22

News flash: the NCA is an incompetent waste of space. I have never known them to be right about anything. They sit on their hands when they should intervene, and intervene when they are not wanted. Any rubber stamp from Officeworks has more integrity than NCA.

Latest case in point, today’s insulting renaming of Aspen Island. We were never consulted , NCA, and we did not want it. What is the use of you, if we can be treated with such casual contempt?

I am glad someone has held the NCA accountable for their dodgy practices. It has been going on for years

Ahhh – I don’t think I saw anything about accountability. I doubt that any chickens will come home to roost. Again.

And the consequence is…publication in a report?
How about loss of confidence in the board? Are there code of conduction provisions available to those who signed off on these procurement items?

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