An audit of the Australian Passport Office’s procurement practices has exposed serious failures. Photo: Mille Florel.
Dodgy procurement practices at the Australian Passport Office have sent the Department of Foreign Affairs and Trade spiralling into damage control after the Auditor-General exposed a cavalier approach to the spending of taxpayers’ money.
Staff are under investigation for misconduct, and contractors are in hot water following the Australian National Audit Office’s scrutiny, which found the Passport Office to have been consistent in its sloppy use of public funds.
Open market tendering was snubbed in favour of preferred suppliers, ethics were abandoned, contracts inconsistently varied and rules routinely ignored.
Culture and leadership in the passport office were found to be seriously flawed.
Eighteen people are now under investigation over their involvement in the office’s procurement practices.
“The procurements that DFAT conducted through its Australian Passport Office did not comply with the Commonwealth Procurement Rules and DFAT’s procurement policies, and did not demonstrate it had achieved value for money,” the audit found.
“DFAT did not employ open and competitive processes in the conduct of Australian Passport Office procurement.
“There were no procurements conducted between July 2019 and December 2023 by way of an open approach to the market.
“Of the 73 procurements examined in detail by the ANAO, 29 per cent involved competition where the department had not identified a preferred supplier prior to inviting quotes.
“Procurement decision-making was not sufficiently accountable and was not transparent.
“Procurement practices have fallen short of ethical standards, with DFAT initiating inquiries of the conduct of at least 18 individuals, both employees and contractors, in relation to Australian Passport Office procurement activities examined by the ANAO.”
The Auditor-General made seven recommendations, all of which DFAT has agreed to implement. They are that the department:
- Improve its planning of procurement activity for the Australian Passport Office (APO), including but not limited to taking steps to assure itself that procurement planning requirements – internal to the department as well as those required by the Commonwealth Procurement Rules (the Rules) – are being complied with
- Strengthen its procurement processes for the APO so that there is an emphasis on the use of genuinely open competition in procurement to deliver value-for-money outcomes consistent with the requirements and intent of the Rules
- Include evaluation criteria in request documentation for all procurements undertaken for the APO, and procurement decision-makers ensure those criteria have been applied in the evaluation of which candidate represents the best value for money
- Strengthen its procurement policy framework by directly addressing the risk of officials being cultivated or influenced by existing or potential suppliers
- Strengthen its controls to ensure any contract variations are consistent with the terms of the original approach to market, and that officials do not vary contracts to avoid competition or other obligations and ethical requirements under the rules
- Examine whether procurements not included in the sample examined by the ANAO also include ethical and integrity failures, and subject any such procurements to appropriate investigatory action, and
- Strengthen oversight by its central procurement area of the procurement activities of the APO. This should include being represented on the evaluation team for each procurement activity of higher risk or value.
In its response to the audit report, DFAT said it was reviewing its compliance framework for procurement.
Reviews of its culture and training for senior leaders were also underway.
“The department acknowledges the ANAO audit a range of integrity and ethics concerns involving several individuals (both contractors and public servants), which we take very seriously,” DFAT’s response said.
“The department is assessing these and has commenced a range of activities to consider and treat any wrongdoings with appropriate and proportionate remedies.”
A number of contractors to the passport office were also given the opportunity to reply to issues raised in the audit, with all (to varying degrees) stressing their own integrity and compliance to the processes they participated in, suggesting failures were on the part of the agency.
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