25 September 2023

Government to tighten procurement reviews after critical audit report

| Ian Bushnell
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CIT logo on building

CIT’s controversial Think Garden consultancy was a case study for the audit. Photo: Region.

The body tasked with reviewing ACT Government procurement decisions will be overhauled in the wake of a damning audit report which found that it was often pressed for sufficient time to do its job, was not clear about its role, did not ask enough questions and was too timid in its advice.

The government has tabled its response to the report from Auditor-General Michael Harris, which used the CIT Think Garden consultancy as one of three case studies, agreeing to all its recommendations.

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It says the proposed changes will strengthen the ACT Procurement Board’s hand and independence, make it more accountable and clearly define its functions.

The government will impose new risk-based criteria on proposals, which must be referred to the board if red-flagged.

A procurement will have to be referred to the board at least six weeks before the anticipated approach to market where a proposal is valued at a new threshold of $7 million or more, and/or has been assessed by the procuring agency as having a high or extreme risk rating.

Any ICT project will also have to be referred to the board, as well as those where a substantial change is proposed or an agency delegate is considering overturning the recommendations of the evaluation team.

The minister, agency chief executive, Procurement ACT or Major Projects Canberra will also be able to refer proposals of any value to the board.

The government says the current “two-pass process” will be modified and applied to all procurements presented to the board, not just goods and services.

The matter will be escalated if the proponent has not implemented the board’s initial advice when they return for the second pass.

A procurement proposal brought to the board for review will not progress unless risks have been dealt with.

“This is to ensure proponents receive advice at a time that it can be practically implemented and also to mitigate the risk of proponents disregarding the board’s advice,” it says.

Agencies will also be required to implement the board’s advice.

The composition of the board will also change, with more non-government members brought in, including as chair of the body.

The government will legislate to clarify and define the board’s objectives and purpose.

The board will have to provide the minister with its strategic direction for the financial year and provide annual reports.

“The ACT Government proposes to further strengthen and clarify relevant legislation and is supporting the broader capability uplift across Territory entities to ensure that the board discharges its role in an environment of strict adherence to best practice procurement values,” the government response says.

The government’s overall procurement reform program will also support changes at the board level.

The audit found that overall, the board was insufficiently sceptical and probing, and its advice unassertive and equivocal.

It said the board’s effectiveness was compromised by the lack of clarity about its primary role and by its “insufficiently challenging review of, and advice for, higher risk procurement proposals”.

The report said the board should focus less on low-risk proposals and review fewer, higher-risk ones.

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Mr Harris said the Government Procurement Act 2001 and Government Procurement Regulation 2007 inhibited the board from being more effective and more efficient.

“Actions that will support greater efficiency and effectiveness of the board are a more independent board; an express authority to advise and, if necessary, approve and give directions; and an ability to focus on specific proposals and matters for its review,” he said.

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