28 September 2022

Procurement failures put Digital Transformation Agency on the chopping block

| Chris Johnson
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The DTA could be heading for the chopping block after a damning report from the ANAO. Photo: DTA.

Mismanagement of ICT (Information and Communication Technology) procurement to the level of raising ethical concerns could see the end of the Digital Transformation Agency.

A scathing report from the Australian National Audit Office will be difficult in the extreme for the DTA to bounce back from.

Established in 2016 by Malcolm Turnbull to replace the Digital Transformation Office, the DTA is an agency designed to improve the accessibility of online government services, but it hasn’t lived up to the former prime minister’s hopes. Put simply, it didn’t achieve what it was formed to do.

The ANAO gave the DTA a fail on all of the ICT procurement deals it investigated. Its critique could not have been more pointed or more damning.

“For the procurements examined by the ANAO, the DTA did not conduct the procurements effectively, and its approach fell short of ethical requirements,” the report stated.

“For the procurements examined by the ANAO, the DTA has not managed contracts effectively.”

The ANAO examined nine procurements and found all of them ineffective, with weak oversight.

There were examples of the value of a contract being bumped up 40 times the original cost, from $121,000 to almost $5 million. The contract, for myGov Funding Case Support was varied 10 times over the life of the contract.

Suppliers were sometimes not selected from procurement panels even when requirements stipulated they had to be.

There seemed to be favourite go-to suppliers and the DTA’s own rules were not followed in the pursuit of purchasing services.

Perhaps even worse, Commonwealth Procurement Rules were also repeatedly ignored.

According to the report, the DTA did not comply with CPR requirements to assess risks, secure pre-procurement value estimates, or maintain appropriate records of approaches to market.

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The ANAO office supplied a list of nine recommendations that go to improving the DTA’s ICT procurement processes.

Eight recommendations directed at the DTA itself, including fraud training for officials involved in procurement, have been agreed to by the agency.

Indeed, the agency has said it is placing great effort into remedial efforts to improve its ICT procurement processes.

But the one ANAO recommendation directed at the Federal Government has only been “noted”. That recommendation states: “The Australian Government implement reporting requirements for procurements from standing offers, such as panels, to provide transparency on whether an opportunity was open to all suppliers and, if not, how many suppliers were approached.”

The DTA is responsible for maintaining a slew of whole-of-government platforms, including myGov, australia.gov.au, Coronavirus Australia and COVIDSafe.

But the new Labor government appears to be priming up to axe the agency completely.

Katy Gallagher, Minister for Finance and Minister for the Public Service, has oversight of the DTA and she’s not happy.

“I take these matters very seriously and will closely monitor the way the DTA addresses these audit recommendations to ensure that the processes and behaviours that have been highlighted in this report are cleaned up and don’t happen again,” Senator Gallagher said.

The ANAO examined a sample of nine procurements for ICT-related services undertaken by the DTA with a published start date between 1 July 2019 and 30 June 2021.

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Commonwealth ICT procurement is an absolute nightmare for government practitioners and industry participants. I avoid working in that space.

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