Introduction

1.1 The Office of the Commonwealth Ombudsman has developed the Better Practice Complaint Handling Guide to help government agencies ensure they have an effective and user-centred complaint handling system. In the Foreword to the February 2021 edition, the Commonwealth Ombudsman outlined that:

While complaints are important to the people who make them, they are also valuable to agencies and policy makers.

A user friendly and efficient complaint handling system doesn’t just resolve problems for individuals. A well-handled complaint can help restore complainant satisfaction and confidence in public administration. Complaints also provide a wealth of data that can be interrogated to identify program weakness, systemic administration issues and opportunities to improve business practices. Complaint data may also indicate a difficulty with policy settings that should be considered by policy makers.⁷

1.2 If an entity receives a complaint about a procurement, then it is required by the Commonwealth Procurement Rules (CPRs) to apply timely, equitable and non-discriminatory complaint-handling procedures. Accountable authorities of relevant entities also have complaint handling obligations under the Government Procurement (Judicial Review) Act 2018 (GPJR Act). ‘Relevant entities’ for the purpose of the GPJR Act are non-corporate Commonwealth entities and corporate Commonwealth entities prescribed in section 30 of the Public Governance, Performance and Accountability Rule 2014 as having to comply with the CPRs. There were 122 relevant entities when this audit commenced in February 2022, which had increased to 125 relevant entities as of 15 November 2022.⁸

Government Procurement (Judicial Review) Act 2018

1.3 According to the July 2014 report of a Senate inquiry into procurement procedures, evidence to the committee suggested that ‘the complaints mechanisms in Commonwealth procurement processes are deficient’. Recommendation 11 in the report stated, ‘The committee recommends that, following consultation with stakeholders, the Department of Finance establish an independent and effective complaints mechanism for procurement processes’.⁹ The Australian Government response of April 2015 to Recommendation 11 was: ‘Not supported’.¹⁰

1.4 The Australian Government subsequently changed its position on establishing an independent complaint mechanism, in the context of compliance with Australia’s international obligations. The Explanatory Memorandum to the Government Procurement (Judicial Review) Bill 2017 outlined that:

The Bill is consistent with recommendation 11 of the July 2014 Senate Finance and Public Administration References Committee’s report into the Commonwealth procurement procedures, for the Department of Finance to establish an independent and effective complaints mechanism for procurement processes.

The Bill will enable Australia to meet international obligations on government procurement that require the Commonwealth to establish or designate an impartial and independent body where suppliers can raise complaints about government procurement processes and be awarded remedies/compensation.¹¹

1.5 Effective from 19 April 2019, the Government Procurement (Judicial Review) Act 2018 (GPJR Act) applies to contraventions, or proposed contraventions, of the relevant CPRs relating to covered procurements by relevant entities. In this context:

• ‘relevant CPRs’ means the provisions of Division 2 of the CPRs and the following paragraphs of Division 1: 4.18, 5.4, 7.2, 7.10, 7.13–7.18, 7.20, and 9.3–9.6; and
• ‘covered procurements’ means the rules in Divisions 1 and 2 of the CPRs apply to the procurement, and it is not included in a class of procurements that has been determined by the Minister for Finance not to be covered procurements.

1.6 The GPJR Act allows suppliers to make an application to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) which may grant an injunction and/or order the payment of compensation by the relevant entity to the supplier.¹² Where a supplier decides to seek an injunction from the court, it must have first made a complaint to the accountable authority under section 18 of the GPJR Act and made a reasonable attempt to resolve the complaint.

1.7 The accountable authority must investigate complaints made under section 18 and prepare a report of the investigation. The accountable authority must suspend the procurement while the complaint is being resolved unless a public interest certificate is in force. The GPJR Act allows the accountable authority to issue a public interest certificate stating that it is not in the public interest for the procurement to be suspended while complaints under section 18 are being investigated or applications for injunctions are being considered.

1.8 Amendments to the CPRs introduced on 20 April 2019 — the day after the GPJR Act commenced — included narrowing the definition of ‘procurement’ to those aspects covered by Australia’s international obligations. The activities that follow the award and reporting of a contract in the procurement lifecycle were moved out of the definition to avoid them being captured by the GPJR Act. Specifically, the ‘delivery of and payment for the goods and services’, the ‘ongoing management of the contract’ and the ‘consideration of disposal of goods’ are no longer included in the definition. These activities are recognised elsewhere in the CPRs as important in achieving the objectives of the procurement.

Procurement Coordinator

1.9 Suppliers may also lodge complaints with the Procurement Coordinator in the Department of Finance. The Minister for Finance announced the creation of the Procurement Coordinator role in July 2009 as part of a package of reforms to government purchasing. The Procurement Coordinator was to: provide external parties with an understanding of the Commonwealth framework; review and advise on procurement practices across government on an ongoing basis; handle complaints as ‘one clear point of contact’ from suppliers and interested external parties; review complaints regarding contract administration; and aggregate information about Commonwealth procurement across all procurement categories.¹³

1.10 The complaint mechanism as outlined on the Department of Finance’s website is narrower in scope that the 2009 announcement, advising suppliers that:

Complaints, in the first instance, should be referred to the entity managing the procurement process.

If your issue is not resolved, and you consider it relates to the specifications of a particular tender that were such that you were prevented from preparing a competitive tender response you can refer a complaint to the Procurement Coordinator …

Complaints about current tenders will only be considered where the Procurement Coordinator determines:

• the issue raised is sufficiently material and relevant to warrant the matter being referred to the relevant entity; and
• there is sufficient time to adequately deal with the complaint before the tender closes.

For completed tenders, where relevant issues are identified, lessons learned may be used to improve Commonwealth procurement policies and processes. This includes assisting the development of policy guidance, and/or the training and professional development of procurement officers.

You should note that the Procurement Coordinator has no authority to compel an entity to reconsider the conduct or outcome of tender processes for which that entity is accountable.¹⁴

Rationale for undertaking the audit

1.11 Procurement is an important and substantial activity for the Australian Government. There were 824,178 contracts valued at $564.5 billion reported to start between 1 July 2012 and 30 June 2022 on AusTender.¹⁵ The ‘lack of an effective complaints process’ was one of the barriers to businesses participating in Australian Government procurement identified by a 2014 Senate inquiry.¹⁶ To implement a recommendation from the Senate inquiry, and to enable Australia to meet international obligations, the GPJR Act established an independent complaint mechanism for government procurement from 19 April 2019.

1.12 This performance audit was conducted to provide assurance to Parliament on the effectiveness of procurement complaints handling, including that the complaint mechanisms are accessible to suppliers and that processes are in place to receive and investigate complaints.

Audit approach

Audit objective, criteria and scope

1.13 The objective of this audit was to assess the effectiveness of procurement complaints handling by the Australian Communications and Media Authority (ACMA), the Department of Finance (Finance), the Department of Industry, Science and Resources (DISR) and the Reserve Bank of Australia (RBA).

1.14 To form a conclusion against the objective, the ANAO examined the following audit criteria.

• Were procurement complaint mechanisms and processes made clear and accessible to suppliers?
• Were procurement complaints from suppliers handled appropriately?

1.15 The audit focussed on the effectiveness of the selected entities in encouraging and handling complaints from suppliers about procurement activities after 19 April 2019. Examination of Finance’s complaints handling included complaints submitted to the Procurement Coordinator in addition to Finance’s handling of supplier complaints about its own procurement activities. Consistent with the definition of ‘procurement’ introduced in the 20 April 2019 version of the CPRs (see paragraph 1.8), the handling of complaints about contractual matters was outside the scope of this audit.

Audit methodology

1.16 The audit methodology included engagement with relevant officials of the four audited entities and the examination of entity records, websites and a sample of approaches to market. The audit methodology also included testing the complaints information that 41 other Australian Government entities provided on their websites and in a sample of their open approach to market documentation. The audit methodology is further outlined in Appendix 3.

1.17 The audit was conducted in accordance with ANAO Auditing Standards at a cost to the ANAO of approximately $231,000.

1.18 The team members for this audit were Tracey Bremner, Amy Willmott and Brian Boyd.

2.1 According to the Office of the Commonwealth Ombudsman’s Better Practice Complaint Handling Guide, a complaint handling system ‘should be user-centred, simple to access and easy to use’. The Guide advises organisations to ‘publish clear information about how to submit complaints and your complaints process in multiple formats’.¹⁷ Finance’s Handling Procurement Complaints guidance says that ‘entities should publish their complaints handling procedures on their website and refer to them in approach to market documentation’.¹⁸

2.2 In relation to informing suppliers about the GPJR Act complaints mechanism, Finance’s Resource Management Guide No. 422 (RMG 422) states that ‘entities should publicise information on their websites on how to lodge a complaint under the Act’. RMG 422 also states that, where an accountable authority issues a public interest certificate, the ‘entity is required to publish the public interest certificate on its website promptly and should notify affected suppliers in writing that a public interest certificate is in force’.¹⁹

2.3 The ANAO examined whether ACMA, DISR, Finance and RBA (the auditees):

• provided clear and sufficient information about their complaints handling processes on their websites and in their approach to market documentation;
• helped make the various complaint mechanisms accessible to suppliers; and
• appropriately informed suppliers about any public interest certificates issued.²⁰

Was the information published on entity websites clear and sufficient?

Ease of finding the information

2.4 Each auditee had published some information on its website for suppliers wanting to complain about a procurement managed by the entity.²¹

2.5 It was easy to find the procurement complaints information on the DISR and RBA websites. The information was one-to-two clicks from the homepage.²² The information was also accessible via other relevant pages on the site and could be found using the site’s search function.²³

2.6 It was fairly easy to find the correct page on the Finance website, being three clicks from the homepage and accessible via the search function. It was not easy to identify the sentence on that page relevant to suppliers wishing to lodge a complaint (quoted in paragraph 2.9 below) which was preceded by information for departmental staff.

2.7 It was not easy to find the procurement complaints information on the ACMA website. The information was located on its procurement page, which was five clicks from the homepage along a trail that was not intuitive, being: Home > Menu > About the ACMA > Planning, reporting and policies > Planning and priorities > Government procurement. The complaints information on the procurement page was not accessible via other relevant pages or the search function.

Information on where to lodge a complaint

2.8 Complaints under section 18 of the GPJR Act are to be made in writing ‘to the accountable authority of the entity’. The accountable authority can delegate the powers and functions conferred under the GPJR Act, including the ability to receive complaints. RMG 422 states that entities should publicise on their websites ‘the details of officials that are able to receive such complaints (i.e. officials who have the appropriate delegation)’.

2.9 On the four auditee websites, the following details on where to lodge a procurement complaint were given.

• ACMA’s provided contact details for GPJR Act complaints and advised suppliers to use the contact details in the request for tender documentation for other complaints.
• DISR’s provided contact details for lodging both GPJR Act and general procurement complaints.
• Finance’s advised ‘Finance employees and the public’ that:

If you would like to provide a complaint to Finance on a procurement matter but unsure where to direct it then please contact us here [mailto link] and it will be assigned to the appropriate area.²⁴

• RBA’s provided contact details for general procurement complaints only.

2.10 To provide comparison data, the ANAO checked the websites of another 41 relevant entities (the sampling method is at paragraph 7 in Appendix 3). Of the 41 comparator websites:

• 44 per cent provided contact details for lodging both GPJR Act and general procurement complaints;
• two per cent provided contact details for GPJR Act complaints only;
• 12 per cent provided contact details for general procurement complaints only;
• five per cent referred suppliers to the request for tender documentation only, which is unhelpful to any suppliers unable to access the documentation, such as those not invited to participate in a limited approach to market; and
• 37 per cent did not provide any procurement complaints information.

2.11 Only ACMA’s website and one of the comparator websites advised suppliers that they needed to lodge GPJR Act complaints with the accountable authority. None of the websites tested stated that a particular official had the appropriate delegation. (See further at paragraphs 2.98 to 2.100)

Information on what to include in a complaint

2.12 One of the auditee websites (DISR’s), and 49 per cent of the comparator websites, provided information on what suppliers should include in their procurement complaint. Four of the comparator websites did so by providing an online or downloadable complaint form for suppliers to complete.

2.13 Finance had produced two online forms for lodging complaints about its procurements, yet neither was accessible via the entity’s website at the time of audit.²⁵ It had:

• a form for making general procurement complaints, which was published on its intranet and so was not accessible to suppliers; and
• a form for making GPJR Act complaints, which was only accessible via a hyperlink within Finance’s request for tender documentation for some open tenders and so was not readily available to all potential complainants (such as to suppliers not invited to participate in limited tenders, see paragraph 2.40).²⁶

2.14 It is important that entities identify on receipt whether a complaint is intended to be a GPJR Act complaint, as legislated handling requirements apply. If the complaint complies with the requirements of section 18 of the GPJR Act, then the accountable authority or authorised delegate:

• must investigate the complaint and prepare a report of the investigation (section 19); and
• must suspend the procurement while the complaint is being resolved unless a public interest certificate is in force (section 20).

2.15 None of the auditee websites advised suppliers to make it clear if their complaint is intended to be a GPJR Act complaint. Twenty per cent of the comparator websites did advise suppliers to make this clear.

Information on how a complaint would be handled

2.16 One of the auditee websites (DISR’s), and 49 per cent of the comparator websites, provided information on how the procurement complaint would be handled by the entity. The complaints handling information was rarely detailed. The information on DISR’s website, and on:

• 37 per cent of comparator websites, included that the entity would acknowledge receipt of the complaint²⁷;
• 12 per cent of comparator websites, included an indicative timeframe for resolving the complaint (ranging from 10 to 20 days); and
• 27 per cent of comparator websites, included information specific to the handling of GPJR Act complaints.

2.17 Overall 25 per cent of the auditee entity websites, and 37 per cent of the comparator entity websites, provided some information on where to make a procurement complaint, what to put in the complaint and how it would be handled.

Note a: See webpages:

• https://www.industry.gov.au/contact-us/feedback-and-complaints/procurement-complaints;
• https://www.infrastructure.gov.au/department/tenders/procurement-complaints;
• https://www.digitalhealth.gov.au/about-us/policies-privacy-and-reporting/procurement-tenders-and-contracts;
• https://www2.gbrmpa.gov.au/about-us/corporate-information/procurement-and-tenders;
• https://www.ansto.gov.au/procurement-policy; and
• https://www.defence.gov.au/business-industry/procurement/defence-procurement-complaints-scheme [all accessed 20 March 2023].

Information provided by Finance to Australian Government entities

2.19 Finance has informed entities of the GPJR Act and the need to publish complaints information, as part of its stewardship over procurement systems and policies. In addition to its production of RMG 422, Finance’s activities have included:

• delivering presentations on the GPJR Act at three meetings of the Senior Procurement Officials Reference Group²⁸;
• publishing articles about the GPJR Act in three editions of the ‘Procurement Bulletin’²⁹ including on the need for entities to publish information on their websites on how to lodge a complaint;
• responding to queries from procurement officials to its Procurement Agency Advice inbox, with Finance categorising 33 of the queries it addressed from 2018–19 to 2021–22 as being GJPR Act specific; and
• providing individualised feedback to entities about the accessibility and coverage of the procurement complaints information on their websites, as a standing agenda item in the ‘outreach sessions’ it holds with senior procurement officials of Australian Government entities, including with officials within its own department.

2.20 The ANAO sought to examine the feedback Finance provided at the outreach sessions held with the auditees.

• ACMA in December 2021 — the recorded feedback included ‘there appears to be readily available information on how to lodge a complaint in relation to government procurement’.
• DISR in December 2020 — records of the feedback were not on Finance’s file.
• Finance’s own procurement officials:
  • in December 2020 — records of the feedback were not on Finance’s file; and
  • in May 2022 — the recorded feedback included ‘there does not appear to be information readily available for potential suppliers on how to lodge a government procurement complaint about a Finance managed procurement’.
• RBA — an outreach session was not held with RBA during the period examined.

2.21 The ANAO examined the records of a sample of 25 outreach sessions held with other entities, randomly selected from those Finance ran between October 2020 and October 2021. The records indicated that Finance provided feedback to all 25 entities about their websites. The feedback (as summarised by the ANAO) was that the complaints information published was:

• sufficient on four websites (16 per cent);
• partially sufficient on six websites (24 per cent); and
• insufficient on the other 15 websites (60 per cent) as ‘there does not appear to be information readily available’.

2.22 The records also indicated that Finance offered to assist each of the 21 entities that had insufficient or partially sufficient information on their websites. The ANAO checked these websites in October 2022 — being one to two years after the feedback was provided — and found that 17 of the entities (81 per cent) had made no improvement.

2.23 Finance’s approach to driving improvement in the publication of complaints handling information by other entities has had limited effect and Finance did not demonstrate better practice on its own website. In performance audits of other entities that similarly have a stewardship role as policy owners, the ANAO has also found shortcomings with monitoring and supporting agency compliance with their policies.³⁰

Was the information provided during approaches to market clear and sufficient?

2.24 An approach to market (ATM) is an invitation to potential suppliers to participate in a procurement. The Commonwealth Procurement Rules (CPRs) advise that the following information be provided during ATMs:

• ‘request documentation that includes all information necessary to permit the potential supplier to prepare and lodge submissions’; and
• ‘following the rejection of a submission or the award of a contract, officials must promptly inform affected tenderers of the decision’ and ‘debriefings must be made available, on request’.³¹

2.25 The ANAO examined whether the information provided by the four auditees contained clear and sufficient information on their procurement complaints processes. The ANAO focussed on ATMs that were ‘covered procurements’ for the purposes of the GPJR Act (see definition in paragraphs 1.5 and 2.82).

Request documentation for open approaches to market

2.26 Open ATMs involve publishing a notice on AusTender inviting all potential suppliers to participate. The four auditees had published a total of 143 open ATMs on AusTender between 19 April 2019 (when the GPJR Act took effect) and 30 June 2022. The number published per auditee was: 23 by ACMA; 62 by DISR; 23 by Finance; and 35 by RBA.

2.27 Each of the auditees had developed entity-specific templates for use in their open ATMs (see paragraph 2.34). To examine the extent of the complaint information provided in practice, the ANAO tested a sample of 28 open ATMs (seven per auditee, as per the sampling method at paragraph 6 in Appendix 3). To provide comparison data, the ANAO also tested the request documentation for a sample of 43 open ATMs published by 41 other relevant entities (three by Defence and one by each of the other entities, as per the sampling method at paragraph 7 in Appendix 3). The key results of the testing are outlined in Table 2.1 and then discussed below.

Table 2.1: Information in the request documentation for open approaches to market

Note: Shading highlights test results that exceed 50 per cent.

Note a: Of those ATMs which advised where to lodge a complaint, the lodgement details were the same for GPJR Act complaints as for general procurement complaints in 71 per cent of cases.

Note b: This includes three ATMs where Finance advised what to include in a GPJR Act complaint by means of inserting a hyperlink to the entity’s GPJR Act complaints form. It did not also advise what to include in a general procurement complaint.

Source: ANAO analysis of a sample of request documentation accessed from the records of audited entities and from AusTender.

Information about the entity’s complaints handling process

2.28 Most of the 71 ATMs tested in total (90 per cent) provided contact details for lodging a GPJR Act and/or general procurement complaint, which was an improvement on the website test results at paragraphs 2.9 to 2.10. Only 27 per cent of the 71 ATMs contained some information advising suppliers what to include in a procurement complaint and how it would be handled by the entity. That advice was rarely detailed.

2.29 The RBA was the only auditee that consistently addressed each of the elements listed in Table 2.1 in its open ATMs. The RBA provided little detail, however, in its advice on what to include in a complaint and how it would be handled. DISR provided greater detail in two of its seven ATMs by inserting a hyperlink to the complaints handling page of its website, thereby expanding the amount of information provided.

2.30 Overall, 12 of the 71 ATMs tested (17 per cent) referred suppliers to entity websites for more information about their complaints processes.³² This approach was effective only half of the time. It was not fully effective in six comparator ATMs because the entity websites did not contain sufficient information and/or because of conflicting information. In one of the comparator ATMs, for example:

• the request documentation referred suppliers to the entity’s website for information on where to submit a formal complaint; and then
• the entity website referred suppliers back to the request documentation.

Information about the suspension provisions of the GPJR Act

2.32 As indicated in Table 2.1, all seven of RBA’s ATMs explained the application of the suspension provisions of the GPJR Act. This was uncommon. Only 19 per cent of the ATMs tested across the other auditees, and 14 per cent of the comparator ATMs, advised that the particular procurement may be suspended if a complaint was received unless a public interest certificate was in force.³³ A related ‘opportunity for improvement’ for Australian Government entities is at paragraph 2.94.

2.33 Overall 32 per cent of the auditee sample of open tenders, and five per cent of the comparator entity sample, provided some information on where to make a procurement complaint, what to put in the complaint, how it would be handled, and that the particular procurement may be suspended if a GPJR Act complaint is received (unless a public interest certificate was in force).

Approach to market templates

2.34 The ANAO examined the entity-specific ATM templates that each auditee maintained. The complaints clause in:

• DISR’s template appeared in one of the sampled ATMs³⁴;
• Finance’s template appeared in one of the sampled ATMs, and was limited to providing contact details for general complaints and a hyperlink to its form for GPJR Act complaints;
• RBA’s template, along with a related ‘Government Procurement Act’ clause, were used as the basis for each ATM in the sample (with occasional customisation³⁵); and
• ACMA’s template was from the Commonwealth Contracting Suite.

Commonwealth Contracting Suite template

2.35 The Commonwealth Contracting Suite (CCS) approach to market template is maintained by Finance and is:

• mandatory for use by non-corporate Commonwealth entities (such as ACMA, DISR and Finance) for procurements valued under $200,000, except in certain circumstances such as when procuring specialist scientific equipment;
• encouraged for use by non-corporate Commonwealth entities for procurements valued between $200,000 and $1 million; and
• encouraged for use by corporate Commonwealth entities (such as RBA) for procurements valued up to $1 million.³⁶

2.36 The wording of the complaints clause in the CCS template, which is presented in Figure 2.1, therefore influences the information that is provided to suppliers in some covered procurements. In the request documentation tested, the complaints clause appeared in 25 per cent of the open ATMs in the auditee sample and 21 per cent of the open ATMs in the comparator sample.

Figure 2.1: Complaints handling clause in the Commonwealth Contracting Suite approach to market template

Source: Commonwealth Contracting Suite approach to market template applicable to a covered procurement valued up to $1 million for which a public interest certificate had not been issued. The template was accessed via the CCS document creation tool, which is for use by government officials only.

Suppliers can view sample templates and the CCS terms at https://www.finance.gov.au/government/procurement/commonwealth-contracting-suite-ccs.

Request documentation for limited approaches to market

2.37 A limited ATM involves the entity directly approaching one or more potential suppliers and inviting them to quote or to tender for the work. To check whether the extent of complaint information provided differed from the open ATMs, the ANAO tested a sample of 12 covered procurements undertaken by limited ATMs (three per auditee, as per the sampling method at paragraph 6 of Appendix 3).³⁷

2.38 It was uncommon for complaints information to be provided during limited ATMs. Three out of the 12 limited ATMs (25 per cent) advised where to lodge a procurement complaint — being one by each of ACMA, DISR and Finance. DISR’s also advised what to put in a complaint and how it would be handled by the entity (by way of a hyperlink to DISR’s website).

2.39 Procurement record-keeping was poor in the sample of limited ATMs. Properly documenting procurement decisions and keeping clear records will assist entities to address any complaints and to demonstrate compliance with the CPRs.

2.40 Suppliers that are not invited to participate in a limited ATM for a covered procurement may submit a GPJR Act complaint if they have reason to believe there was a contravention of the relevant CPRs that affected their interests. The relevant CPRs include that an entity must only conduct a covered procurement through limited tender in the circumstances listed at paragraph 10.3 of the CPRs, which are known as the ‘limited tender conditions’. Entities must report the relevant limited tender condition on AusTender. The ANAO observed that half of the procurements in the limited ATM sample did not demonstrably satisfy the limited tender condition that the entity reported on AusTender.

Information provided to unsuccessful tenderers

2.41 When advising unsuccessful tenderers of the outcome of an ATM, all four auditees:

• did offer tenderers the opportunity to request a debriefing, as required by the CPRs; and
• did not provide any information on complaints processes or mechanisms.

2.42 The information provided to unsuccessful tenderers was consistent with the CCS ‘unsuccessful letter’ template.

Were suppliers appropriately informed of any public interest certificates that had been issued?

Public interest certificates

2.43 The suspension provisions of the GPJR Act preserve the supplier’s right to participate in the covered procurement if the outcome of the complaint is in their favour. Where a valid complaint under the GPJR Act is received:

• the covered procurement is to be suspended until the complaint is resolved or withdrawn or a public interest certificate is issued; or
• if a public interest certificate has already been issued, the covered procurement will not be suspended as a public interest certificate is in force.

2.44 In reference to public interest certificates, the explanatory memorandum to the Government Procurement (Judicial Review) Bill 2017 outlined that:

The intended effect of the certificate is simply that the procurement would not be suspended while the application or complaint was being considered … The public interest certificate is a necessary feature of the procurement complaint mechanism to prevent real adverse consequences to the public interest if a particular procurement was suspended … Where a procuring entity issues a public interest certificate, the procuring entity will be required to promptly publish the certificate on its website.

2.45 Each of the four auditees had dedicated sections on their websites for the reporting of public interest certificates (PICs). ACMA’s and RBA’s sections also explained the purpose of PICs to suppliers. By 30 June 2022, ACMA had reported two PICs, DISR had reported two PICs, Finance had reported five PICs and RBA had reported no PICs.

2.46 The ANAO also checked the websites of the 118 relevant Australian Government entities that were not subject to this audit at 30 June 2022. Twenty-two of their websites (19 per cent) contained dedicated sections for the reporting of PICs and 18 of these reported that the entity had issued PICs under the GPJR Act. The PICs covered a total of 64 procurements.

Decisions taken to issue public interest certificates

2.47 The ANAO examined the departmental records of the nine decisions taken by ACMA, DISR and Finance to issue PICs. The ANAO did not identify indications that additional decisions had been taken by these auditees, or that the RBA had decided to issue a PIC, as at 30 June 2022.

The decision-makers

2.48 The delegation provisions in the Public Governance, Performance and Accountability Act 2013 apply in relation to the functions and powers conferred on the accountable authority of a non-corporate Commonwealth entity by the GPJR Act. The accountable authorities of ACMA, DISR and Finance had delegated their powers to issue PICs. In practice, for:

• ACMA, both decisions to issue PICs were taken by the accountable authority;
• DISR, one decision was taken by the accountable authority and the other decision by an authorised delegate; and
• Finance, four of the five decisions were taken by authorised delegates. The other one decision was taken by a departmental official who was not identifiable from the records, which did not support external assurance that the official was properly authorised (see paragraph 2.53).

2.49 To produce comparator information, the ANAO checked the 64 PICs reported by other Australian Government entities as at 30 June 2022. The issuing official was identifiable in 63 of the PICs, of which ten (16 per cent) were accountable authorities.

Documenting the decisions

2.50 A PIC may be issued at any stage during the procurement process, including after a complaint has been made. RMG 422 advises that the entity should document the decision to issue a PIC, ‘including the reasons that a suspension would have an adverse impact on the public interest that outweighs the private interest of the aggrieved supplier to have the covered procurement suspended.’

2.51 The decisions taken by ACMA and DISR were well documented in comprehensive briefings, each comprised of a covering minute and three to eight attachments. These included an attachment that outlined the reasons a suspension of that procurement would have an adverse impact on the public interest that outweighed the private interest of an aggrieved supplier to have it suspended. In ACMA’s briefings this attachment was five to six pages long, and in DISR’s it was one to two pages long.

2.52 On average, the recommendations to issue PICs were approved by decision-makers two days following the request. Of their four decisions to issue PICs:

• ACMA and DISR had each taken one decision during the procurement planning stage; and
• ACMA and DISR had also each taken one decision after a procurement had been suspended for a month due to receipt of a GPJR Act complaint. The issuing of the PIC lifted the suspension, allowing the procurement to continue.
  • At the time ACMA issued its PIC, the GPJR Act complaint was still being investigated, whereas DISR issued its PIC after finalising the report on the investigation.

2.53 Finance’s decision-making for its five PICs was poorly documented across various combinations of email exchanges and of records in a workflow management system (‘the system’). The system records did not identify the decision-maker (on four occasions the ANAO could identify the decision-maker from email exchanges). The system records also did not include a text field for commentary by the decision-maker. On three of the occasions where the basis for the decision was documented in an email exchange, the decision-maker stated they were satisfied that the public interest ‘would outweigh the rights of an individual supplier in being able to make a complaint’. This wording does not reflect the circumstances in which a PIC can be issued, or its effect, as PICs do not impact a supplier’s right to complain.

2.54 Finance advised the ANAO in December 2022 that observations made by the ANAO in the course of this audit ‘led to the Department recently decommissioning the electronic workflow system’ and that ‘the Department is currently updating its processes’.

2.55 On average, the recommendations to issue PICs were approved by Finance’s decision-makers 26 days following the request. The recorded basis in all five decisions taken by Finance related to the procurement being to establish either a coordinated or a cooperative panel arrangement for use across Australian Government entities (in addition to issuing PICs covering the establishment of these particular panels, as discussed at paragraphs 2.85 to 2.87, no procurements from standing offers under panel arrangements are covered procurements for the purposes of the GPJR Act). None of the decisions related to receipt of a GPJR Act complaint.

2.56 To obtain an indication of the reasons the other Australian Government entities decided to issue their 64 PICs, the ANAO compared the date the PIC was issued with the dates the ATM had opened and closed for submission. Decisions taken prior to the ATM being published on AusTender are unlikely to have followed receipt of a GPJR Act complaint. The applicable dates could be identified by the ANAO for 62 of the PICs and, of these:

• 53 per cent were issued on the day of, or prior to, the ATM being published on AusTender as open for submissions;
• 15 per cent were issued after the ATM was published but before the closing date for submissions; and
• 32 per cent were issued after submissions had closed (ranging from three to 399 days after and averaging 166 days).

Issuing the certificates

2.57 The issuing of a PIC involves the issuing of a written certificate containing the statement specified in subsection 22(1) of the GPJR Act; that is:

(1) The accountable authority of a relevant Commonwealth entity may issue a written certificate stating that it is not in the public interest for a specified procurement by the entity to be suspended while:

1. applications for injunctions under Part 2 are being considered; or
2. complaints under section 18 are being investigated.

2.58 In respect of the two decisions taken by ACMA, both briefings recommending that PICs be issued included a draft written certificate. The accountable authority issued the PICs as part of the approval process by signing the draft certificates.

2.59 In respect of the two decisions taken by DISR:

• the briefing provided to an authorised delegate included a draft written certificate, which was signed by that official at the time of their approval; and
• the briefing provided to the accountable authority advised that, following their approval to issue a PIC, an authorised delegate would sign the written certificate. Accordingly, an authorised delegate signed the certificate on the day the accountable authority gave approval.

2.60 For only one of the five decisions taken by Finance had a written certificate been signed at the time of approval. In that case the authorised delegate had recorded their approval in an email of 8 December 2020 and had also signed a written certificate on 8 December 2020.

2.61 Of the other four decisions taken by Finance, at the time this audit commenced in February 2022:

• approval to issue two of the PICs had been recorded via email (on 22 October 2021 and 2 December 2021) and no written certificate had been signed — both procurements were still active; and
• approval to issue the other two PICs had been recorded in the workflow management system by the decision-maker setting the record’s status to ‘Send to Legal - Issue Certificate’ (on 13 January 2020 and 26 May 2021) and Finance was unable to provide evidence that a written certificate had been generated by the system — both procurements had been completed.

2.62 Following ANAO inquiries, Finance revisited the four decisions in March 2022. An authorised delegate signed written certificates on 31 March 2022 for the two procurements that were then still active. Written certificates have not been signed for the other two decisions taken. Finance advised the ANAO in December 2022 that:

The delegate did not consider it in the public interest to issue written certificates for the two procurements completed before the issue was identified (FIN/007/20RFTPhase2, and RFT FIN 003/19) as the delegate could not be satisfied the requirements in section 22 of the GPJR Act could be met. The intended effect of the certificate is to certify that it would not be in the public interest for the procurement to be suspended. This could not be established (and was not relevant) in the case of the completed procurements.

Information provided on the written certificates

2.63 Seven PICs in the form of written certificates had been issued by the auditees as at 30 June 2022, being two by ACMA, two by DISR and three by Finance. All seven PICs contained the statement specified in subsection 22(1) of the GPJR Act and were factually correct.

2.64 To measure the appropriateness of the information more broadly, the ANAO assessed the seven PICs against the non-mandatory template PIC provided in RMG 422. All seven were consistent with the template PIC. To provide comparator data, the ANAO also assessed 63 of the PICs issued by other entities³⁸ and these were largely consistent with the template. The assessment results are outlined in Table 2.2.

Table 2.2: Assessment of the content of Public Interest Certificates (PICs)

Note a: When reporting in AusTender, including when publishing ATMs, entities are required to select the United Nations Standard Products and Services Code (UNSPSC) category that relates to the majority of the goods or services being sought.

Source: ANAO analysis of the PICs published by entities as at 30 June 2022, against the template at Appendix 5 of Resource Management Guide No. 422, August 2019.

Publishing the certificates and notifying affected suppliers

2.65 Consistent with the explanatory memorandum (as quoted in paragraph 2.44) RMG 422 states that the entity ‘is required to publish the public interest certificate on its website promptly’. RMG 422 also advises that entities ‘should notify affected suppliers in writing that a public interest certificate is in force’. Where a PIC is issued before submissions to an ATM have closed, then the notification may be done within the request documentation or by issuing an addendum.

2.66 ACMA published copies of its two PICs on its website promptly, within one day of them being issued. ACMA also notified affected suppliers in writing that the PICs were in force:

• for the PIC issued during the planning stage, ACMA included a copy of the certificate in the request documentation; and
• for the PIC it issued after submissions had closed, ACMA notified affected suppliers via email the day after the certificate was signed.

2.67 In respect of DISR’s two PICs:

• for the PIC issued during the planning stage, DISR published a copy on its website the day it was signed and then notified suppliers in the request documentation that a PIC was in force; and
• for the PIC issued after submissions had closed, DISR notified affected suppliers via email three days after the certificate was signed and then published a copy on its website three days later.

2.68 Finance had issued three PICs in the form of written certificates. Finance published copies of two of the written certificates on its website, both six days after they were signed.

2.69 Finance had made five decisions to issue PICs and notified suppliers that all five PICs were in force by reporting them on its website. The report included the name of the procurement, the AusTender reference number and the date the PIC was issued. On four occasions Finance also notified suppliers during the ATM (either within the request documentation or by issuing an addendum) that the PIC was in force. As indicated by the dates outlined in Table 2.3, Finance had notified suppliers that:

• one PIC was in force on the day the written certificate was signed;
• two PICs were in force four-to-five months in advance of the written certificates being signed during the course of this audit; and
• two PICs were in force without a written certificate being signed (see paragraph 2.62).

Table 2.3: Timing of Finance’s notification and reporting activities

Note: The procurements relating to the first, second and third decisions had been completed at the time this audit commenced in February 2022.

Source: ANAO analysis of Department of Finance records and website.

2.70 For each of the affected procurements, Finance advised the ANAO in August 2022 that ‘no formal complaints under the GP(JR) Act were received in relation to this procurement and no prejudice to tenderers or prospective tenderers arose’. In relation to needing to improve its processes for recording decisions taken to issue PICs, and for ensuring a written certificate is published promptly, Finance advised in December 2022 that it ‘is implementing new processes that will address the concerns that the ANAO has raised’. Finance provided departmental documentation on two PICs that it had issued and published on its website in November 2022 (outside the scope of this audit), which supported Finance’s claims.

Were the complaint mechanisms made accessible to suppliers?

Extent suppliers have accessed the complaint mechanisms

2.71 There is no central register of the number or nature of procurement complaints made by suppliers to Australian Government entities nor are procuring entities required to report such complaints.³⁹

2.72 Where a supplier has made a complaint to a procuring entity and is dissatisfied with the outcome, then alternative complaint mechanisms include the Procurement Coordinator within Finance and the Office of the Commonwealth Ombudsman. Finance advised its Secretary in July 2022 that, since the Procurement Coordinator ‘function commenced in 2011, there have been 40 complaints received’. The Office of the Commonwealth Ombudsman advised the ANAO in December 2021 that, ‘The numbers of complaints we receive about a tender or procurement process are low, at approximately 15 complaints each year’. The ANAO was further advised that:

We do not usually take action on these complaints and have not commenced any formal investigations in the past two years into procurement complaints. This is usually for 2 reasons:

• If the person has not made a complaint to the department or agency before contacting the Office, then we encourage them to do so. The relevant department or agency is best placed to efficiently resolve their complaint or provide an explanation that addresses their grievance.
• There are other bodies more suitable to handle these complaints. If the complaint is relates to the Defence portfolio, we refer the person to the Defence Procurement Complaints Scheme. Otherwise, we refer the person to complain to Procurement Coordinator in the Department of Finance.

2.73 The independent complaint mechanism established under the GPJR Act allows suppliers to make an application to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) (‘the court’). The Federal Court of Australia (FCA) advised the ANAO in July 2022 that neither court maintained specific statistics regarding applications filed under the GPJR Act, however:

from our searches we identified one FCA matter … While this application was accepted by the Court for filing, it was subsequently discontinued by the applicant …

We have also conducted searches for judgments that consider the GPJR Act. No judgments were able to be found.

2.74 By way of update, the FCA confirmed to the ANAO in March 2023 that there had been no applications to the Court under the GPJR Act since the July 2022 advice quoted above.

2.75 The Better Practice Complaint Handling Guide cautions that ‘low complaint volumes do not necessarily imply high customer satisfaction (for example, it may be because a system is not sufficiently accessible)’ and advises that ‘an accessible system will actively seek to reduce access barriers’.

Extent of coverage by the GPJR Act mechanism

2.76 In summary, under the GPJR Act that commenced 19 April 2019:

• the court may order the payment of compensation and/or grant an injunction in relation to a contravention of the relevant CPRs (so far as those rules relate to a covered procurement); and
• a supplier may complain to the accountable authority of a relevant Commonwealth entity about a contravention of the relevant CPRs (so far as those rules relate to a covered procurement).

2.77 Suppliers can only access the GPJR Act complaint mechanism if the CPRs have provided for coverage of both the procurement and their topic of concern. Audit findings relating to the extent to which coverage was provided, and whether that was consistent with the scope of the recommendation from the Senate Finance and Public Administration Committee, and with meeting the international obligations, are summarised below. Further detail is provided in Appendix 4.

Relevant CPRs

2.78 The CPRs incorporate the requirements of Australia’s international trade obligations and government policy in procurement into a set of rules, which apply to procurement conducted by relevant Commonwealth entities. The ‘relevant CPRs’ are defined in section 4 of the GPJR Act as:

(a) a provision of Division 1 of the Commonwealth Procurement Rules that is declared by those rules to be a relevant provision for the purposes of this paragraph; or

(b) Division 2 of the Commonwealth Procurement Rules.

2.79 Changes introduced by the Australian Government in the CPRs issued 20 April 2019 included adding paragraph 6.9 to declare the relevant provisions of Division 1 for the purposes of the GPJR Act definition above. Finance advised the Minister in March 2019 that the provisions selected from Division 1 were ‘limited to those that reflect our international obligations’. The provisions selected were CPRs: 4.18, 5.4, 7.2, 7.10, 7.13–7.18, 7.20 and 9.3–9.6.

2.80 Finance also advised the Minister in March 2019 that if certain other changes were not made then ‘the scope of potential supplier complaints would be broader than what is required by Australia’s international obligations’. The proposed changes were included in the 20 April 2019 CPRs and involved narrowing the definition of ‘procurement’ so as to ‘reduce the risk of a complaint on matters that are not required by our international obligations’ (see further at paragraph 1.8); and moving three paragraphs that reflected Australian Government procurement policy out of Division 2 and into Division 1 so they would not be covered by the GPJR Act.

2.81 The provisions that entities ‘must’ comply with⁴⁰ that were not declared relevant CPRs include, among others:

• 4.5 — officials must be satisfied, after reasonable enquiries, that the procurement achieves a value for money outcome; and
• 6.6 — officials must act ethically throughout the procurement (see further at paragraphs 2.119 to 2.120).

Covered procurement

2.82 Section 5 of the GPJR Act provides that a procurement is a ‘covered procurement’ if the rules in Divisions 1 and 2 of the CPRs apply and it is not included in a class of procurements specified in a determination made by the Finance Minister by legislative instrument.⁴¹

2.83 Entity reporting of contracts valued at or above the reporting threshold on AusTender does not identify whether the award was by covered procurement.⁴² To get an indication of the extent of coverage, the ANAO estimated the proportion of reported contracts that were not covered by the GPJR Act (the AusTender data better supports the identification of procurement excluded from coverage than included). In summary:

• 193,871 parent contracts valued at $120.3 billion were reported to start between 1 July 2019 and 30 June 2022 on AusTender⁴³; and
• of these, at least 89 per cent were not covered procurement for the purposes of the GPJR Act (being 173,295 contracts valued at $75.1 billion).

2.84 The above figure of 89 per cent will be an underestimation because it cannot be determined with confidence from the AusTender data which of the remaining 11 per cent are or are not covered by the GPJR Act. Nevertheless, it can be concluded that suppliers have not been provided access to the GPJR Act mechanism in respect of most Australian Government procurement.

Panel procurement is not covered

2.85 Changes introduced in the 1 January 2019 CPRs included specifying in paragraph 9.12 that ‘procurements from an existing standing offer are not subject to the rules in Division 2’. RMG 422 then advised that procurements from standing offers under panel arrangements are not covered procurements for the purposes of the GPJR Act ‘as paragraph 9.12 of the CPRs indicates that these procurements are not subject to Division 2 of the CPRs’.

2.86 The exclusion of panel procurement substantially limits supplier access to the GPJR Act. The proportion of the number of reported contracts associated with a ‘standing offer notice’ on AusTender increased from 28 per cent in 2012–13 to 50 per cent in 2021–22. The largest of these panels contained 3,273 suppliers. ANAO analysis has identified that for seven out of the top 10 panels by total value, at least 80 per cent of the panel’s total value was awarded to 20 per cent or less of the suppliers represented on the panel.⁴⁴

2.87 Excluding panel supplier access to the GPJR Act does not sit comfortably with implementation of recommendation 11 of the Senate inquiry report. The report outlined a need for ‘some mechanism, beyond a complaint to the agency or the procurement coordinator, available to aggrieved parties’ and recommended that ‘Finance establish an independent and effective complaints mechanism for procurement processes’. Given most procurement by relevant entities is not ‘covered procurement’, and several mandatory provisions reflective of Australian Government policy are not ‘relevant CPRs’, the coverage of the GPJR Act is not sufficient to fully implement recommendation 11.

Informing suppliers whether the GPJR Act applies

2.90 Given its limited scope of coverage, a potential barrier to suppliers accessing the independent complaint mechanism is not knowing if the GPJR Act applies to both the procurement and their topic of concern.

2.91 Out of the four auditee websites, DISR’s briefly explained to suppliers what a covered procurement was by reference to the procurement thresholds, while Finance’s provides a detailed explanation within guidance targeted to procuring entities. Of the comparator websites, 10 per cent explained to suppliers what a ‘covered procurement’ was.

2.92 The ANAO identified that the following ATM documents advised suppliers whether it was a covered procurement for the purposes of the GPJR Act:

• 11 per cent of open ATMs in the auditee sample, being two ATMs by Finance and one by DISR (see ‘example 2’ in Appendix 6); and
• 21 per cent of open ATMs in the comparator sample.

2.93 Most of the ATMs tested, therefore, did not advise whether the GPJR Act applied. Some of these had taken the Commonwealth Contracting Suite approach of only including GPJR Act related information in request documents for covered procurements, but this approach may not be apparent to suppliers. Some other entities prefaced their GPJR Act information with generic statements such as ‘If this RFT Process is a covered procurement…’ or ‘this Condition […] only applies if the Procurement Process is a Covered Procurement’ [emphasis added].

2.95 In relation to entities explaining to suppliers which are the relevant CPRs for the purposes of the GPJR Act:

• Finance’s website provided an explanation within guidance targeted to procuring entities but none of the auditee websites explained them for suppliers;
• seven per cent of the comparator websites provided detailed explanations for suppliers; and
• none of the ATMs in the auditee or comparator samples explained them.

Assisting supplier access to the GPJR Act mechanism

Making a complaint before applying for an injunction

2.96 There are two types of injunctions that can be granted by the court under the GPJR Act.⁴⁵ As summarised in RMG 422:

• A restraining injunction can be granted where the court finds that the relevant Commonwealth entity or official has or is proposing to engage in conduct that contravenes the relevant CPRs. The injunction ‘restrains’ them from engaging in that conduct.
• A performance injunction can be granted where the court finds that the relevant Commonwealth entity or official has refused, is refusing, or is proposing to refuse to do something and this refusal contravenes the relevant CPRs.

2.97 The court may not grant an injunction unless the court is satisfied that the supplier ‘has made a complaint under section 18 to the accountable authority of the relevant Commonwealth entity about the contravention or proposed contravention’ and ‘has made a reasonable attempt to resolve the complaint’.⁴⁶ Subsection 18(1) provides, if:

(a) a supplier has reason to believe that:

1. a relevant Commonwealth entity; or
2. an official of a relevant Commonwealth entity;

has engaged, is engaging or is proposing to engage, in any conduct in contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement); and

(b) the interests of the supplier are affected by the conduct;

the supplier may make a written complaint about the conduct to the accountable authority of the entity.

2.98 The ANAO checked whether the four auditees and 41 comparator entities had provided information on where to lodge a complaint under section 18 on their websites (see paragraphs 2.8 to 2.11) and in their request documentation for open ATMs (see Table 2.1). Where this information was provided, it rarely advised suppliers to lodge their complaint with the entity’s accountable authority. This advice only appeared: on the website of one auditee (ACMA) and one comparator entity; and in the request documentation issued by one auditee (RBA) and no comparator entities. Where suppliers were instead advised to email complaints to another official or to a group email account, then it could not be objectively determined if the receiving official had the appropriate delegation. This situation may make it difficult for suppliers and/or entities to demonstrate compliance with the GPJR Act.

2.99 The ANAO considered that the wording of the ATM template in the Commonwealth Contracting Suite increased the risk of complaints being directed to officials who were not authorised to receive them. The template instructs suppliers to direct complaints raised under the GPJR Act ‘to the Customer’s ATM Contact Officer or the Complaints contact’ (as per Figure 2.1). The contact officer in particular may not have the appropriate delegation, given these procurements are generally valued below $200,000.

2.100 The ANAO sought Finance’s advice on the implications of entities instructing suppliers to lodge complaints under the GPJR Act to an individual official who does not have the appropriate delegation and/or to a group email account. Finance advised the ANAO in August 2022:

The accountable authority of the relevant Commonwealth entity should ensure it has clear processes in place to receive written complaints made under section 18 of the GPJR Act (refer paragraph 28 of RMG 422). Should an official, who does not have the appropriate delegation, receive a written complaint under section 18 of the GPJR Act then internal procedures should be in place for the written complaint to be forwarded on to the relevant official who has the appropriate delegation to formally receive and assess the complaint. If it is unclear whether the complaint is intended to be a complaint under section 18 of the GPJR Act, the delegate should seek clarification from the supplier (refer paragraph 31 of RMG 422).

2.101 RMG 422 advises that entities ‘should ensure that the formal written complaint submitted by a supplier clearly references the relevant paragraph/s of the CPRs it considers have been contravened’. The website of one of the auditees (DISR), and 29 per cent of the comparator entities, suggests suppliers identify the CPRs they believe have been breached to assist in the timely resolution of their complaint. A further 10 per cent of comparator entity websites stated that identifying the relevant CPRs was a mandatory requirement. It is not evident that this is a requirement of the GPJR Act given, as RMG 422 states, ‘there are no formal requirements for making a supplier complaint other than it be made in writing to the accountable authority’.

2.102 Giving suppliers a list of the CPRs paragraphs applicable to the GPJR Act and/or a hyperlink to the CPRs, would not necessarily mean they are positioned to assess which paragraph their concern relates to. A supplier that had complained to one of the comparator entities expressed that it had been asked ‘to nominate those CPRs we believe were breached without the technical expertise to do so accurately … we do not believe that our business is appropriately qualified to nominate … those CPRs potentially breached for the purposes of an investigation’.

Meeting the time limit for applications for injunction

2.103 The court can grant an injunction only where it is satisfied that the application was made within 10 days of when the supplier became aware, or ought reasonably to have become aware, of the alleged contravention of the relevant CPRs affecting its interests.⁴⁷ That is, within 10 days of becoming aware of the matter of concern, the supplier is to have: lodged a complaint under section 18 to the accountable authority; attempted to resolve the complaint; and then made an application for an injunction.

2.104 The court may allow a longer period if it is satisfied that the supplier’s failure to make the application within the 10-day period is attributable to the applicant’s reasonable attempt to resolve the complaint or there are special circumstances that warrant allowing a longer period.⁴⁸ Barriers to supplier access therefore include suppliers not meeting the time limit due to lack of awareness.

2.105 All references to the time limit in the open ATMs tested used the wording from the Commonwealth Contracting Suite ATM template, being ‘Potential Suppliers are reminded that the GPJR Act places time limits on making applications under that Act’. This wording appeared in 39 per cent of the auditee sample and 23 per cent of the comparator sample.

• Of the four auditee websites, none explained the time limit while one website (ACMA’s) expressed a sense of urgency by advising that ‘complaints must be made in writing to the accountable authority immediately after becoming aware of the alleged breach of the relevant CPRs’.
• Of the 41 comparator websites, five per cent explained the 10-day time limit, two per cent advised ‘there are time limits for taking certain action’ and a further 12 per cent expressed a sense of urgency.

2.106 The report of a Senate inquiry into the provisions of the Government Procurement (Judicial Review) Bill 2017 noted that ‘several submissions expressed concern over the adequacy of the 10 day time limit in which a supplier must lodge an application for an injunction’. The report quoted Finance’s advice to the inquiry that:

The default timeframe of 10 days was chosen to encourage timely efforts, by both suppliers and the procuring entity, to resolve any concerns about the process. The choice of a 10 day default strikes an appropriate balance between the interests of both sides and minimises disruption to other parties involved in the same process.⁴⁹

2.107 There is no requirement for the entity to resolve the matter within 10 days of the accountable authority receiving the complaint.

Guidance for suppliers about the GPJR Act

2.110 The domestic review provisions of the Trans-Pacific Partnership Agreement (TPP) included that ‘The procedural rules for all complaints shall be in writing and made generally available’ and ‘Each Party shall make information on its complaint mechanisms generally available.’⁵⁰ RMG 422 is generally available on Finance’s website as guidance ‘relevant to accountable authorities and officials undertaking procurements’. The guidance does not therefore outline some of the procedural rules applicable to suppliers. For example, RMG 422 does not explain that:

• the supplier is not required to make a complaint to the accountable authority before making an application to the court for compensation; and
• the 10-day time limit does not apply to an application for compensation, which may be made independent of an application for an injunction.

2.111 There is no Australian Government guide on the GPJR Act tailored to suppliers. As evident from the quote below, Finance’s response to a question taken on notice during the Senate inquiry into the provisions of the Government Procurement (Judicial Review) Bill 2017 indicated that there would be guidance for suppliers. The question was asked in the context of submissions to the inquiry expressing concerns about the ability of small and medium sized business enterprises to utilise the courts as a complaint mechanism.⁵¹

Question 8

What is the expected impact on Small and Medium Enterprises (SMEs)?

a) Will there be any support to assist SMEs in challenging outcomes?

Response

The impact on SMEs is expected to be positive as they will have access to a more timely, effective and lower cost complaints mechanism for government procurement. Guidance and information on the new complaints mechanism will be available for suppliers to assist them with understanding how it will operate.⁵²

2.112 Finance developed, but did not finalise and publish, a supplier guide to the GPJR Act. The ANAO notes that the:

• January 2019 draft RMG 422, which was circulated to the Senior Procurement Officials Reference Group for comment, contained guidance for suppliers. This included an appendix titled ‘Reference guide for potential suppliers: Raising a complaint’. Finance removed the supplier guidance from subsequent versions of RMG 422;
• March 2019 briefing advised the Finance Minister that, ‘In addition to the updates to the CPRs, Finance is developing guidance and other relevant supplier information, which will be made publicly available prior to the commencement of the Judicial Review Act’;
• April 2019 publication of RMG 422 stated at paragraph 79 that ‘Information to assist suppliers with the processes and information required when raising a complaint under the Act is included in the Supplier Guide to the Government Procurement (Judicial Review) Act 2018, which is available on the Finance website’;
• May 2019 issue of Finance’s Procurement Bulletin advised that the ‘Supplier Guide … is currently being cleared, and entities will be notified once it has been published on the Finance website’; and
• August 2019 publication of RMG 422 amended paragraph 79 to remove the reference to the Supplier Guide as follows, ‘Information to assist suppliers with the processes and information required when raising a complaint is available on the Finance website’. This is the only paragraph that has been amended since the April 2019 release, as at December 2022.

2.113 Finance advised the ANAO in August 2022, in response to a request for ‘any records of a decision not to proceed with the proposed Supplier Guide’, that:

The ‘Supplier Guide to the Government Procurement (Judicial Review) Act 2018’ was being developed by the Department of Finance. A decision was made through the clearance process not to proceed with the development and release of the guidance, with information instead being included in RMG 422 and the Selling to Government webpage. Documentation regarding that decision is not available. Information was instead published on the ‘Selling to Government’ website advising on some of the complaint mechanisms available to suppliers (https://sellingtogov.finance.gov.au/guide/if-you-dont-win-a-contract).

2.114 The information published on Finance’s ‘Selling to Government’ website does not constitute supplier guidance on the GPJR Act. As at December 2022, the relevant section states, in full:

Additionally, for specific complaints that are subject to the requirements of the Government Procurement (Judicial Review) Act 2018 [hyperlink], there may be recourse through the Federal Circuit Court or the Federal Court of Australia.

2.115 Of the 45 entity websites examined by the ANAO in total, four per cent (being RBA’s and ACMA’s) referred suppliers to the ‘Selling to Government’ website and 33 per cent referred suppliers to RMG 422.

Access to complaint mechanisms for alleging breaches of probity

2.118 Probity is the evidence of ethical behaviour in procurement. It provides a level of assurance to suppliers that a procurement was conducted in a manner that is fair, equitable and defensible.⁵³ Further, procurement is vulnerable to corruption. Control measures suggested by various state anti-corruption bodies include ‘a complaints management process to deal with allegations about wrongdoing concerning procurement activities’ and ‘clear and easy to follow information about how to make a complaint if … suppliers suspect wrongdoing’.⁵⁴

2.119 The CPRs on ethical behaviour that relevant entities must comply with are CPRs 6.6, 6.7 and 6.8. The Australian Government has not declared these to be ‘relevant CPRs’. The GPJR Act mechanism is therefore not accessible to suppliers alleging a contravention of CPR 6.6, for example, which states that:

In particular, officials undertaking procurement must act ethically throughout the procurement. Ethical behaviour includes:

a. recognising and dealing with actual, potential and perceived conflicts of interest;

b. dealing with potential suppliers, tenderers and suppliers equitably, including by

1. seeking appropriate internal or external advice when probity issues arise, and
2. not accepting inappropriate gifts or hospitality; …

2.120 Finance’s records of the identification of the relevant CPRs for the purpose of the GPJR Act include the following with respect to CPR 6.6:

While “Ethical behaviour” is covered in Australia’s FTAs [free trade agreements], CPRs paragraph 6.6 pre-dates Australia’s FTAs with its inclusion in the Commonwealth Procurement Guidelines (CPGs) in 1998 and 2014. Refer to Part 3 of the 1998 CPGs and CPGs paragraph 5.21 of the 2004 CPGs.

Further, “Ethical behaviour” is addressed as part of the legislative environment: Public Service Act 1999, Public Governance, Performance and Accountability Act 2013 and the Crimes Act 1914.

2.121 Suppliers will therefore be largely reliant on entity complaint mechanisms in the first instance, if they have probity concerns.⁵⁵ An entity complaint mechanism that does not offer suppliers the option of complaining to an official who is independent of the procurement, is not well suited to allegations of probity breaches.

2.122 All 71 open ATMs across the auditee and comparator entity samples provided the email address of a ‘contact officer’ for the specific procurement. The ANAO checked whether suppliers also had access to a different email address they could use when making complaints. If not, then the ANAO checked whether the contact officer address was for a central procurement policy team, as this may increase supplier trust compared with raising allegations directly with an official undertaking the procurement.

2.123 The results of the ANAO’s analysis differed by auditee. Of the 28 ATMs in the auditee sample:

• RBA’s seven ATMs provided a different email address suppliers could use when making complaints;
• DISR provided a different email address in five of its ATMs, and directed suppliers to the contact officer for the procurement in the other two ATMs;
• ACMA’s seven ATMs did not provide a different email address, however that address was for the entity’s central procurement policy team; and
• Finance’s seven ATMs directed suppliers to the contact officer for the procurement.

2.124 Of the 43 ATMs in the comparator sample, 70 per cent offered suppliers a different email address that they could use when making complaints. For a further 12 per cent, the contact officer email address was that of the entity’s central procurement policy team.

2.125 The ANAO also identified that one of the 28 ATMs in the auditee sample had provided contact details specifically for the raising of probity concerns. (The ATM was by the RBA and the relevant text is included as ‘example 5’ in Appendix 6). In addition, three of the 43 ATMs in the comparator sample contained contact details for raising probity concerns, and another one identified the contact listed for GPJR Act complaints as being the entity’s probity adviser. The procurement complaints handling pages on the auditee and comparator entity websites examined did not provide advice specific to raising matters of probity.⁵⁶

Fear of retribution as a barrier to complaining

2.126 A survey of suppliers to a state government by an anti-corruption body revealed that the main barrier to their reporting corruption in procurement ‘was a fear that reporting would negatively impact their organisation’.⁵⁷ The Commonwealth Ombudsman has identified the ‘fear of retribution’ as a barrier to complaint more broadly.⁵⁸ Similarly, supplier input to this audit received through the ANAO’s citizen contribution facility included:

In my view as a supplier to government, the single largest issue with a procurement complaints mechanism is that there is a strong perception that any complaint will tarnish the supplier’s image in the eyes of its client and make winning any future work very difficult. Every supplier (especially those with knowledge of probity auditing and procurement rules) has a collection of stories that could be told where procurement guidelines weren’t appropriately followed, which would be exponentially more than the number of complaints actually received.

2.127 The Better Practice Complaint Handling Guide advises that ‘your publications and your staff should actively encourage complaints by making it clear that … there is no penalty for complaining’.⁵⁹ None of the four auditee websites explicitly made this clear. One of the 41 comparator websites examined contained an explicit statement, being ‘The initiation of a complaint won’t prejudice a supplier’s participation in future procurement processes’. Less directly, ACMA’s website and 13 comparator websites used the term ‘non-discriminatory’, ‘without discrimination’ or ‘without disadvantage’ when describing its approach to complaints handling. This usage reflects the CPRs requirement that entities apply ‘non-discriminatory complaint-handling procedures’.

2.128 None of the 28 ATMs in the auditee sample explicitly addressed the fear of retribution, while the complaints clause in one of DISR’s ATMs used the term ‘non-discriminatory’. Four of the ATMs in the comparator sample had addressed the fear of retribution by using wording reflective of the TPP and WTO GPA agreements, which state ‘the procuring entity shall accord impartial and timely consideration to the complaint in a manner that is not prejudicial to the supplier’s participation in ongoing or future procurement’.⁶⁰

Access to the Procurement Coordinator and Commonwealth Ombudsman complaint mechanisms

2.129 The Procurement Coordinator ‘Complaints Handling Charter’ on Finance’s website advises suppliers that if their issue has not been resolved by the procuring entity ‘and you consider it relates to the specifications of a particular tender that were such that you were prevented from preparing a competitive tender response you can refer a complaint to the Procurement Coordinator.’ This wording may discourage suppliers from accessing the complaint mechanism. The limitation is inconsistent with the Australian Government’s expectations that the Procurement Coordinator would ‘respond to concerns regarding procurement policy and its implementation’.⁶¹

2.130 The Office of the Commonwealth Ombudsman advised the ANAO in December 2021 that:

Under the Ombudsman Act 1976, the Office of the Commonwealth Ombudsman (the Office) handles complaints about matters of administration, which can include the way a department or agency dealt with a tender or procurement matter … The nature of the complaints about procurement matters received by the Office usually relate to one of the following:

• Parties who were unsuccessful in being awarded a tender.
• Parties who had previously been successful through a tender process, but were not invited to tender for a new process.
• Parties who held a current contract and submitted a tender for a new contract, but were not awarded the contract.

…

We do not usually take action on these complaints and have not commenced any formal investigations in the past 2 years into procurement complaints. This is usually for 2 reasons:

• If the person has not made a complaint to the department or agency before contacting the Office, then we encourage them to do so. The relevant department or agency is best placed to efficiently resolve their complaint or provide an explanation that addresses their grievance.
• There are other bodies more suitable to handle these complaints. If the complaint relates to the Defence portfolio, we refer the person to the Defence Procurement Complaints Scheme.⁶² Otherwise, we refer the person to complain to Procurement Coordinator in the Department of Finance.

2.131 The ANAO examined the extent to which the auditee and comparator entities were aiding supplier access to these complaint mechanisms through awareness raising. The ANAO also considered whether entities helped distinguish between the two, to avoid what the Better Practice Complaint Handling Guide calls the ‘referral roundabout’.⁶³

2.132 None of the 71 open ATMs tested across the 45 entities referred to the Office of the Commonwealth Ombudsman in the context of procurement complaints handling. Eleven per cent of ATMs in the auditee sample (all by DISR), and 12 per cent of the comparator sample, referred to the Procurement Coordinator. For only one of the 71 ATMs tested (a comparator entity ATM) was the reference to the Procurement Coordinator accompanied by an explanation of their role.

2.133 In addition to Finance’s website, which hosts the Procurement Coordinator information, the following was referenced on websites.

• One auditee (DISR) referred to both mechanisms on its complaints handling webpage, as follows:

If you are not happy with the outcome, you can raise it with the Australian Government procurement coordinator [hyperlink] or Commonwealth Ombudsman [hyperlink].

• 32 per cent of comparator websites also referred to both, with one of these websites explaining the mechanisms and the rest taking a similar approach to DISR.
• Two per cent of comparator websites referred to the Office of the Commonwealth Ombudsman mechanism only.

2.134 Complaints handling by the Procurement Coordinator is examined within Chapter 3, with an ANAO recommendation for Finance to improve accessibility at paragraph 3.64. The management of complaints by the Office of the Commonwealth Ombudsman was the subject of Auditor-General Report No. 41 2021–22.⁶⁴

3.1 A well-handled complaint can help generate supplier satisfaction and confidence in Australian Government procurement and administration. Having a suitable system in place will enhance the entity’s ability to manage procurement complaints in a consistent and responsive manner and to comply with legislative requirements.

3.2 The ANAO examined whether each of the four auditees had suitable systems in place for handling procurement complaints, including those made under the Government Procurement (Judicial Review) Act 2018 (GPJR Act) and, in respect of Finance, complaints made to the Procurement Coordinator. The system design principles outlined in the Better Practice Complaints Handling Guide include that ‘complaint handling should be supported by clear process guidance’ and ‘complaints should be recorded in an electronic system capable of producing complaint insights’. The guide also advises entities that ‘Regular reviews of your complaint handling system are an opportunity to ensure the system is up to date and able to meet new challenges and evolving better practice’.⁶⁵

3.3 The ANAO also examined whether the auditees had appropriately handled complaints that had been made by suppliers after 19 April 2019, which is when the GPJR Act commenced. The ANAO used the broad definitions of ‘complaint’ and ‘supplier’ that are outlined in paragraph 4 of Appendix 3.

Were suitable systems in place for handling procurement complaints?

Entity-specific guidance

3.4 The ANAO examined the procedural guidance that auditees had in place for staff handling general procurement complaints. In summary:

• ACMA and RBA had basic guidance, sufficient to support consistency in the context of having few complaints and centralised complaint handling;
• DISR had comprehensive guidance; and
• Finance did not have entity-specific internal guidance in place (an example of where such guidance would have been beneficial is at paragraph 3.31).

3.5 The ANAO also examined the procedural guidance in place to assist staff to handle complaints and issue Public Interest Certificates (PICs) under the GPJR Act.

• When ACMA received a complaint under the GPJR Act, it did not yet have guidance in place but noted in a briefing to its accountable authority that ‘the processes to be followed contained in RMG 422 are clear and have been taken into account in preparing this advice to you’. ACMA had comprehensive guidance in place from 2021 (see paragraph 3.17).
• DISR had training materials and basic guidance in place from 2019, with comprehensive guidance being in place by early 2022.
• Finance had basic guidance in place from 2019 comprising a flow chart for handling GPJR Act complaints, a flow chart for issuing PICs and a related PIC checklist. As the policy owner, Finance also had internal expertise on the GPJR Act and had produced the comprehensive, cross-entity guidance in RMG 422.
• RBA had comprehensive guidance in place from 2019.

3.6 Finance advised the ANAO in December 2022 that its ‘internal guidance is under re-development to provide more information and clarity to Finance staff on the process and roles in handling a procurement complaint’.

Procurement Coordinator

3.7 The Procurement Coordinator function resides in Finance with the First Assistant Secretary, Procurement and Insurance Division. The Procurement Coordinator Secretariat sits within a team of that Division. Finance had a public Complaints Handling Charter in place for the Procurement Coordinator function⁶⁶, which was supported by basic internal guidance and by a series of templates. At the time of this audit, Finance was in the process of updating its guidance materials and advised the ANAO that it was awaiting the learnings from the audit.

3.8 The guidance was insufficient for ensuring timely complaints-handling. While the publicly available Complaints Handling Charter included a three-day timeframe for acknowledging the receipt of complaints, the internal guidance did not set out any expectations in terms of timeliness. The Better Practice Complaint Handling Guide advises: ‘Timeliness benchmarks mitigate the risk of unnecessary delay in complaint handling … Complaints should be reviewed at established deadlines to see if they need extended timeframes and/or escalation’.⁶⁷ Shortcomings with timeliness are examined at paragraphs 3.58 to 3.63 and addressed by ANAO recommendation no. 4.

3.9 There is potential for the Procurement Coordinator to receive a complaint that gives rise to a conflict of interest, such as a complaint about a procurement undertaken by their Division. In July 2022, Finance’s accountable authority approved a process for managing such conflicts of interest. This initiative was not driven by a complaint but was a proactive measure.

Complaints register

3.10 DISR and RBA each maintained a register of procurement-related complaints in the form of a spreadsheet, which was supported by user guidance. Each entity directed supplier complaints to centralised email accounts and the ANAO verified the registers were complete.

3.11 ACMA did not maintain a register and advised the ANAO in July 2022 that there had been one procurement complaint. ACMA directs supplier complaints to a centralised email account and the ANAO verified it contained one complaint. Establishing a register for future complaint activity may help provide assurance to the entity’s governance.

3.12 Finance did not maintain a register of complaints made to it as a procurer of goods and services. The ANAO obtained verification that no complaints had been lodged via Finance’s GPJR Act webform. Finance did not have a system for providing assurance as to the number of procurement complaints lodged via other means.⁶⁸ The ANAO was therefore reliant on Finance’s assertions in this regard. Finance advised the ANAO in January 2023 that ‘to support and track complaints/submissions received through the general complaints form, the department has also established a Procurement Complaint Register’ and it provided a copy of the spreadsheet it will use for this purpose.

3.13 Finance did maintain a register of complaints made to the Procurement Coordinator, which was in the form of a spreadsheet. The ANAO verified the register was complete in respect to complaints accepted for consideration by the Procurement Coordinator (see paragraph 3.45). It was largely complete in respect to complaints that the Procurement Coordinator Secretariat had responded to directly, such as by suggesting the supplier seek a debriefing from the procuring entity in the first instance (see paragraph 3.43).

Implementing recommendations from reviews

3.14 Two of the auditees (Finance and ACMA) had undertaken reviews since April 2019 that made recommendations relevant to their procurement complaints handling systems.

3.15 Finance had established a taskforce in June 2020 to ‘examine the Department’s approach to procurement governance and assurance and how organisational values and behaviours are embedded into the work of individual teams’.⁶⁹ The recommendations in the resulting Assurance Taskforce Final Report of October 2020 included that Finance ‘Implement centralised procurement complaints handling to ensure a consistent approach to how procurement complaints are received and managed’. An Assurance Implementation Taskforce then commenced in December 2020 to lead implementation of the recommendations. An Assurance Implementation Steering Committee had oversight of the implementation, including endorsing closure of recommendations. Internal reporting stated that the recommendation to establish centralised procurement complaints handling was implemented in December 2020.

3.16 The procurement complaints to be handled centrally in Finance were to include ‘those of a general nature’. The ANAO found in 2022 that the handling of general procurement complaints had not been centralised.

3.17 ACMA undertook an internal audit of its 2021 procurement to establish the National Self Exclusion Register. At $14.4 million, this was the highest value tender that ACMA had conducted since its establishment of the Do Not Call Register in 2007. A recommendation in the internal audit’s Final Report of December 2021 was for ACMA to update its Procurement and Contract Management Guide to include, among other things, processes for managing complaints lodged under the GPJR Act. ACMA already had this work in train. A Procurement Complaints Handling Procedure had been in draft form since February 2021. It was approved in December 2021 along with an updated Procurement and Contract Management Guide.

Were supplier complaints to the procuring entities handled appropriately?

3.18 The ANAO examined in detail the handling of 15 complaints from suppliers about procurements undertaken by the auditees. These comprised one complaint received by ACMA, seven by DISR and seven by Finance. All except two related to ‘covered procurements’ for the purposes of the GPJR Act (these two complaints were received by DISR). The RBA had not received a complaint that fell within the scope of this audit.

Receiving complaints

3.19 The CPRs require entities to provide acknowledgement ‘soon after’ a complaint is received. As the term ‘soon after’ is not defined, the ANAO adopted a timeframe of three business days for audit analysis purposes.⁷⁰

3.20 All except one of the 15 complaints was acknowledged soon after receipt. That one had been submitted to Finance and, while it was not acknowledged within three business days, it was finalised within five business days of receipt.

Assessing if it is a GPJR Act complaint

3.21 When an accountable authority or official receives a procurement complaint, they should first assess if it meets the requirements of the GPJR Act and if it is intended to be a complaint made under the Act. Should this be unclear then, as RMG 422 states, ‘it is the responsibility of the accountable authority to seek immediate clarification from the supplier in order to assess what course of action is required and, in particular, whether the procurement must be suspended under section 20 of the Act’. The ANAO considers three of the 15 complaints warranted such clarification.

3.22 A complaint was made to the ACMA contact for an open request for tender (RFT) and then the supplier directed their complaint to the accountable authority. The complaint did not reference the GPJR Act or a contravention of the CPRs but, as it was a procurement-related complaint received by an accountable authority, ACMA sought clarification from the supplier. It was a GPJR Act complaint and the procurement was suspended (see also paragraph 2.52). The duration from receipt of the initial complaint to suspension of the procurement was five business days.

3.23 A complaint was made to the DISR contact for an open RFT. The supplier did not reference the GPJR Act but did allege a contravention of a relevant CPR. DISR sought clarification from the supplier, who confirmed it was a GPJR Act complaint, and the procurement was suspended (see also paragraph 2.52). The duration from receipt of the complaint to suspension of the procurement was one business day.

3.24 A complaint was made to the Finance contact for an open RFT. Two business days later, the supplier emailed their complaint to the accountable authority and referred to ‘the terms of the judicial review legislation’. Finance did not clarify the supplier’s intent and handled it as a general procurement complaint. Finance advised the ANAO in July 2022 that it ‘was not a complaint to the Accountable Authority made under the GPJR Act, as paragraph 7.4.6 of the RFT states that Any complaint relating to the RFT which is made under the Government Procurement (Judicial Review) Act 2018 (Cth) is to be lodged using the following link [to Finance’s GPJR Act complaints form]’ and the supplier ‘did not submit a complaint through this mechanism’. Finance’s position is inconsistent with its statement in RMG 422 that there are no formal requirements for making a GPJR Act complaint ‘other than it be made in writing to the accountable authority’.

Considering complaints

3.25 Two complaints were handled as GPJR Act complaints, being one by each of ACMA and DISR. Such complaints must be investigated. Subsection 19(1) the GPJR Act provides:

If a supplier makes a complaint under section 18 to the accountable authority of a relevant Commonwealth entity, the accountable authority must:

(a) investigate the conduct the subject of the complaint; and

(b) prepare a report of the investigation.

3.26 ACMA’s investigation process displayed independence, thoroughness and procedural fairness. ACMA engaged a law firm that had no prior involvement in the procurement to investigate the complaint and prepare the report. Both ACMA and the supplier provided input to the investigation and comments on the draft report. Both had maintained detailed records, including of their videoconference and telephone conversations, which aided the investigation.⁷¹ The content of the 27-page final report was consistent with the guidance provided in RMG 422.⁷²

3.27 The GPJR Act complaint received by DISR was investigated by a departmental procurement officer who ‘had not had substantive involvement in the procurement’ subject to complaint. The supplier’s complaint had included a matter not covered by the GPJR Act, which was dealt with through the same investigation for efficiency. Internal legal advice was obtained on the draft report of the investigation, which resulted in the six-page final report being consistent with the guidance provided in RMG 422.

3.28 Some general procurement complaints can be resolved early, with minimal further assessment being made, while others will require a formal investigation into the alleged matter. DISR and Finance applied a similar mix of these approaches. DISR’s complaint handling displayed more characteristics of independence than Finance’s.

3.29 All six of DISR’s general procurement complaints were handled by its central procurement team, which was independent of the matters subject to complaint.

• Two complaints were resolved early by the procurement officers explaining the applicable Commonwealth procurement rule.
• One complaint was resolved early, following internal legal advice, by DISR’s Chief Finance Officer offering the supplier a debriefing.⁷³
• Two complaints were investigated by the procurement officers, assisted by internal legal advice and by the probity advisor engaged for the tender process.
• One complaint was investigated by the procurement officers and then, as the supplier was not satisfied, a second investigation took place involving both internal and external legal advice.

3.30 Finance’s seven complaints related to three tenders, with the team managing the tender processes being involved to varying degrees in the handling of complaints. A firm was engaged as probity advisor to the three tenders.

• Two complaints were resolved early by the tender team providing detailed responses, with the draft responses having been reviewed by the probity advisor.
• The tender team sought to resolve another complaint but the supplier was not satisfied with the outcome. The supplier was advised they could ‘request an independent review by Finance’ and they requested the review (see paragraph 3.31).
• Two complaints were investigated by the probity advisor. The tender team sent one of the suppliers an accurate summary of the investigation findings and sent the other supplier a copy of the probity advisor’s report.
• Two complaints were investigated by the Chair of the tender evaluation team, with the draft letters of outcome reviewed by the probity advisor. One of the suppliers then requested an independent review by Finance (see paragraph 3.32).

3.31 Finance conducted a review in response to the first of the two requests for independent review. According to Finance’s records, the reviewer had ‘not been involved with the tender evaluation’ and their ‘assessment remained independent of direction from anyone who was involved in the process’. The Chair had sought guidance from the probity advisor and from the Procurement Agency Advice team within Finance, expressing to both that the independent review process requirements were unclear. The response from the probity advisor was that the reviewer met the criteria for an independent internal review.⁷⁴ Despite this, the reviewer’s supervisor was also the Chair of that tender’s evaluation team and was managing the complaint review process. This situation raises issues with the independence of the approach and highlights the potential benefits of Finance establishing entity-specific procedures for its staff (see paragraph 3.4).

3.32 The other supplier that requested an independent review by Finance had tendered to be a provider of two service subcategories on a coordinated procurement panel⁷⁵, and their complaint related to being unsuccessful against one of these. The tender team’s emailed response to the request discouraged such a review by stating:

Finance is of the view that adequate information has already been provided … If Finance, in its absolute discretion, determines that the independent review has identified a significant flaw in the evaluation process with respect to [the supplier’s] tender, and that the circumstances warrant the merits of the decision being reviewed, please be aware that there is no guarantee whatsoever that the outcome will change, or that any new decision will be in [the supplier’s] favour.

…

Please be aware, in particular, that the independent review could be adverse and, if Finance determines that the merits of the decision should also be reviewed as a result, this could result in [the supplier] being unsuccessful in both Service Subcategories. …

If you confirm that you would like to proceed with the independent review, to enable Finance to progress the matter, please … Acknowledge that you understand that, if Finance determines, in its absolute discretion, that the merits of the decision should be reviewed, there is a possibility that:

there will be no change to the outcome, or

any change to the outcome will be less favourable to [the supplier’s] tender and, for example, could result in [the supplier] being unsuccessful in both Service Subcategories.

3.33 Finance did not undertake a review in response to the second of the two requests. Finance advised the ANAO in September 2022 that the supplier had not replied to the above quoted email. Finance also advised in respect of the one service subcategory the supplier was successful against, that:

if an independent review was to be undertaken it was likely that the review would find that [the supplier] did not satisfy the evaluation criteria for this subcategory. In this case, there were inconsistencies with the way that the evaluation criteria was applied across the service subcategories, however, it was to [the supplier’s] advantage. [The probity advisor] was consulted and assisted with the drafting of the response to [the supplier] that inferred that it may not be in their best interests to request an independent review of their tender.

3.34 The Better Practice Complaints Handling Guide advises and that ‘the best complaint handlers … proactively invite people to access review and escalation options if they seem dissatisfied’.⁷⁶ Finance’s approach of discouraging a supplier from accessing the offered review option undermines procedural fairness. It is also questionable whether Finance, when considering the interests of the supplier, gave due consideration to the interests of the Australian Government entities required to use the resulting coordinated procurement panel.

Finalising complaints

3.35 The Better Practice Complaints Handling Guide advises that, ‘when communicating outcomes, you should include: a short summary of what the complaint was about; what actions were taken to assess and/or investigate each element of the complaint; what information and evidence you considered; reasons for any decisions, findings or conclusions; [and where applicable] any remedial action’.⁷⁷ ACMA’s, DISR’s and Finance’s communications with suppliers on the outcomes of the 15 complaints were consistent with this guidance.

3.36 One out of the 15 suppliers received a favourable outcome from their complaint, with the entity setting out remedial actions.

3.37 The CPRs require entities to apply ‘timely’ complaint-handling procedures. According to the Better Practice Complaint Handling Guide, the ‘timely actioning of complaints means that the time taken to complete the assessment, and if applicable the investigation, of a complaint is proportionate to the particular issue and the shortest timeframe possible while ensuring a proper outcome is delivered’.⁷⁸

3.38 ACMA’s handling of the GPJR Act complaint took 78 business days from receipt of the complaint to the outcome being sent to the supplier. The complaint was a complex matter and the procurement value was significant to ACMA’s overall funding levels. ACMA’s accountable authority wrote to the supplier advising that the investigation was complete and providing a copy of the final report. The report concluded that ACMA had not contravened the relevant CPRs.

3.39 DISR took 11 business days from receipt of its GPJR Act complaint to advising the supplier of the outcome. An authorised delegate had approved the advice. At the request of the supplier, a copy of the final report was subsequently provided and it concluded there was no contravention of the CPRs.

3.40 DISR and Finance were timely in their handling of the general procurement complaints. DISR took from two to nine business days, averaging six business days. DISR therefore achieved its published timeframe of seeking to resolve issues within 10 days. Finance took from two to 15 business days, averaging seven business days. Finance had not set an indicative timeframe for handling complaints.

3.41 The 15 complaints examined included one complaint to DISR about its procurement of delivery partners for the Entrepreneurs’ Programme. The scope of the ANAO’s examination did not extend to DISR’s complaint handling activities following the June 2022 publication of Auditor-General Report No. 42 of 2021–22 about the procurement of the delivery partners. During that audit the ANAO identified seven complaints from five tenderers, either made to DISR or to the ANAO through the citizens contribution facility on the ANAO website. The audit concluded, among other things, that the ‘design and conduct of the procurement did not comply with the Commonwealth Procurement Rules’.⁷⁹ In an overview of how it was addressing the audit findings, DISR advised the Joint Committee of Public Accounts and Audit in November 2022 that:

The department has written to all unsuccessful tenderers in the 2019 procurement in relation to the non-compliance issues identified in the ANAO audit report. Tenderers were also invited to a briefing with Senior Executives where the department outlined its response to the audit, listened to their concerns and answered questions.

The department is committed to act as a model litigant and has provided details to the tenderers on how to claim for compensation under the Government Procurement (Judicial Review) Act 2018 (Cth). The department is seeking to settle legitimate claims quickly and treat claimants fairly and consistently.⁸⁰

Were supplier complaints to the Procurement Coordinator handled appropriately?

3.42 If a supplier is not satisfied that their complaint was sufficiently addressed by the procuring entity, then they may seek review through other mechanisms. These include the Procurement Coordinator within Finance (background on the role is provided in paragraphs 1.9 to 1.10).

Receiving complaints

3.43 Where a supplier raises concerns with the Procurement Coordinator without evidencing they were first raised with the procuring entity, then Finance’s standard response includes:

We suggest you seek a debrief from the agency responsible for the procurement (if you have not already done so). The complaint handling charter (found at [hyperlink]) notes that complaints, in the first instance, should be referred to the agency managing the procurement process. This is due to the Commonwealth Procurement Framework being devolved by nature, meaning each agency and area is responsible for its own procurement processes and decisions in order to meet its business needs.

Following a debriefing, if you still have concerns, a complaint may be lodged with the Procurement Coordinator, using the Online Complaints Form referenced in the Complaints Handling Charter, requesting a review [of] the process.

3.44 Given few approaches are made to the Procurement Coordinator each year, there is opportunity for Finance to customise its responses to better assist suppliers. The Better Practice Complaint Handling Guide notes that ‘it can be hard for people to know where they should direct their complaint’ and agencies should ‘help people find the right complaint pathway and avoid people getting stuck, frustrated or lost on a referral roundabout’. The following sequence of events from late 2020 provide an example of a supplier who may have benefited from greater engagement by the Procurement Coordinator Secretariat.

• 9 September: The supplier emailed the Procurement Coordinator with concerns. The email included an extract of the reasons given by the procuring entity for the supplier’s tender being unsuccessful and a copy of the request for tender, which did not explain where to send complaints.
• 10 September: Finance replied, directing the supplier to seek a debrief from the procuring entity as per the standard wording quoted above in paragraph 3.43.
• 29 October: The supplier emailed its procurement concerns to the Office of the Commonwealth Ombudsman. The email did not mention these had been raised previously with the Procurement Coordinator.
• 17 November:
  • The Office replied, suggesting the supplier raise the issue with the Procurement Coordinator and providing a link to Finance’s Procurement Coordinator webpage; then
  • the supplier forwarded the email chain to the Procurement Coordinator mailbox.
• 27 November: Finance replied to the supplier, again directing them back to the procuring entity using the standard wording quoted above in paragraph 3.43.

Greater assistance was warranted in that instance and, while 80 days had passed since the supplier’s first email, Finance had received only one new matter in the mailbox during that time.

3.45 When a supplier’s complaint is accepted for consideration it is recorded in the Procurement Coordinator register as being an ‘official complaint’. There were seven ‘official complaints’ recorded in the register as having been both lodged and completed since 19 April 2019. Four out of the seven complaints related to ‘covered procurements’ for the purposes of the GPJR Act.

Official complaints

3.46 Finance requires that official complaints be lodged using an online complaint form. The Complaints Handling Charter on Finance’s website advises suppliers that the details they need to provide via that form include: ‘copies of any documents relating to your complaint; and a copy of the entity response to your complaint’.

3.47 The online complaint form is not fit for this purpose because the form does not let suppliers upload documents. The form contains fields for suppliers to enter their contact details and the tender details, and then a free-text field for outlining the issues they wish to raise.

3.48 When an online complaint form is lodged, the system sends the supplier a confirmation of receipt. The system is also to send a copy of the form to the Procurement Coordinator mailbox. The Complaints Handling Charter advises suppliers that they will receive acknowledgement from the Procurement Coordinator Secretariat within three business days of lodgement.

3.49 On 2 November 2021, a supplier phoned and then emailed Finance to advise they had not received acknowledgement of a recently submitted complaint. The Procurement Coordinator Secretariat was unaware of the complaint and investigated why. On 3 November 2021, Finance identified that submitted forms were no longer being sent to a mailbox. There were five complaint forms awaiting attention.

3.50 The oldest of the five complaint forms had been lodged 17 months prior, on 11 June 2020. A further three weeks after identifying this complaint, Finance spoke to the supplier on 24 November 2021 to apologise for the delay in responding. The supplier advised they had concurrently raised their concerns with the procuring entity and its Minister, and the matter was resolved. The conversation was followed up with an emailed apology from the Procurement Coordinator. This complaint did not require further consideration by Finance.

3.51 The second oldest of the five complaint forms had been lodged more than 10 months prior. The supplier had emailed the Procurement Coordinator mailbox on 15 December 2020 to ask how to upload the required documents with the complaint form. After not having received a response for five days, the supplier lodged a complaint form and emailed its documentation to the Procurement Coordinator mailbox on 20 December 2020. Finance had accepted and registered it as an ‘official complaint’ on the basis of email exchanges.

3.52 The other three complaint forms had been awaiting attention for three, 13 and 46 business days respectively. Finance emailed the three suppliers on 3 November 2021 to apologise for the delay in confirming receipt and it registered their complaints as ‘official complaints’ for further consideration.

3.53 To help ensure that complaint forms lodged in the future were sent to the Procurement Coordinator mailbox, Finance updated its draft procedural guidance to include regular testing of the online form. Finance also amended the form itself, and the Complaints Handling Charter, to advise suppliers that: ‘If receipt of your complaint has not been acknowledged after three business days, please email ProcurementCoordinator@finance.gov.au’.

3.54 Two complaint forms were lodged by suppliers after the system issue had been addressed (one in December 2021 and one in February 2022). The system sent these to the Procurement Coordinator mailbox as intended and the Secretariat registered them as ‘official complaints’.

Considering and finalising complaints

3.55 The ANAO examined the handling of the six ‘official complaints’ that required further consideration by Finance. Finance’s considerations included liaison with relevant Australian Government entities. Cooperating with Finance on procurement complaint and compliance matters is in keeping with the obligation on accountable authorities of non-corporate Commonwealth entities to govern their entities in a way that is not inconsistent with the policies of the Australian Government.⁸¹ The CPRs incorporate government policy in procurement and the Procurement Coordinator role was established by government policy (see paragraph 1.9).

3.56 As a result of Finance’s liaison activities, three out of the six complaints were not progressed for investigation by the Procurement Coordinator. This was because:

• in one case, the complaint did not relate to a procurement undertaken by an Australian Government entity and so fell outside the scope of the Procurement Coordinator (see case study 1 in Appendix 7); and
• in two cases, the procuring entities had not completed their own investigations. Both suppliers were informed that they could re-submit their complaint to the Procurement Coordinator following a response from the procuring entity, if they wished.

3.57 Finance undertook a comprehensive investigation of the other three complaints. This involved reviewing the process for the procurement referenced in the complaint, focusing on the requirements under the Commonwealth Procurement Rules and, where applicable, the shadow economy procurement connected policy.⁸² Finance provided each supplier a detailed letter of outcome. The letters ranged from four to six pages and outlined: the role of the Procurement Coordinator; the details of the complaint; Finance’s engagement with other entities; a timeline of the relevant facts of the procurement process; Australian Government policy considerations; and the Procurement Coordinator’s response to the complaint. For all three the Procurement Coordinator was of the view that the requirements of the Commonwealth Procurement Rules, as they relate specifically to the complaint, had been met. Finance also advised the procuring entities of the outcome of the complaints.

3.58 For each of the six official complaints, the ANAO calculated the number of business days between the date the supplier lodged their complaint and the date Finance informed them of the outcome. ‘Business days’ can better represent work effort and potential for time-efficiency savings. The time taken to consider each of the three complaints that the Procurement Coordinator did not accept for investigation was: six, 28 and 141 business days. While the time taken for each of the three complaints formally investigated was: 41, 61 and 198 business days.

3.59 The ANAO analysis indicates the elapsed time taken to handle the six complaints (475 business days) was attributable to the following factors: 13 per cent to the IT system issue with the online complaint form; 0.2 per cent to liaison with the supplier; nine per cent to liaison with other entities; and 78 per cent to other handling activities by Finance. The results of the ANAO’s analysis per complaint are outlined in Figure 3.1. Case studies of Finance’s handling of two of the complaints are provided in Appendix 7.

Figure 3.1: Time taken to consider six complaints to the Procurement Coordinator

Source: ANAO analysis of Finance records.

3.60 As was noted at paragraph 3.8, Finance did not set target or indicative timeframes for resolving complaints that could be used to measure timeliness. The timeframes for most complaints, however, appeared excessive and inconsistent with the Better Practice Complaint Handling Guide’s definition of the ‘timely actioning of complaints’ (see paragraph 3.37).

3.61 Finance did not keep suppliers adequately informed of progress. The updates on progress that were given tended to be in response to supplier requests rather than proactive. According to the records examined, there was no contact made with the supplier that waited 41 business days for an outcome, other than the initial acknowledgement of receipt. In respect of the complaint that took 197 business days to finalise, there was no contact with the supplier recorded throughout the last 153 business days (see case study 2 in Appendix 7).

3.62 Finance advised the ANAO in September 2022 that:

Finance intends to refresh our internal guidance as to how complaints will be dealt with in future, including how suppliers lodging a complaint are kept informed of the progress of their complaint. In addition, we will give consideration to placing performance indicators around response timeframes to the initial complaints. We have started to look into the appropriateness of a Customer Relationship Management system to manage and monitor complaints being submitted for the consideration of the Procurement Coordinator. We will use the preliminary audit findings, when they are available, to help continue to address the shortcomings identified in the management to date.

3.63 It is questionable if the complaints handling function, as currently promoted and operated by Finance, is delivering on the policy decision taken over 13 years ago to ‘establish a Procurement Coordinator to advise on the procurement framework and respond to concerns regarding procurement policy and its implementation’.⁸³ In its roles as Procurement Coordinator and as steward over Australian Government procurement systems and policies, Finance should demonstrate better practice in procurement complaints handling.

Appendix 1 Entity responses

Appendix 2 Improvements observed by the ANAO

1. The existence of independent external audit, and the accompanying potential for scrutiny, improves performance. Improvements in administrative and management practices usually occur: in anticipation of ANAO audit activity; during an audit engagement; as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts. The ANAO’s 2021–22 Corporate Plan states that the ANAO’ s annual performance statements will provide a narrative that will consider, amongst other matters, analysis of key improvements made by entities during a performance audit process based on information included in tabled performance audit reports.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• introducing or revising policies, strategies, guidelines or administrative processes; and
• initiating reviews or investigations.

4. In this context, the below actions were observed by the ANAO during the course of the audit. It is not clear whether these actions and/or the timing of these actions were planned in response to proposed or actual audit activity. The ANAO has not sought to obtain assurance over the source of these actions or whether they have been appropriately implemented.

Australian Communications and Media Authority (ACMA)

5. ACMA advised the ANAO in November 2022 that it was working with the Department of Finance to enable the AusTender reporting of contracts entered for the purposes of the eSafety Commissioner since 23 January 2022, when the Online Safety Act 2021 commenced (see paragraph 2 of Appendix 3). ACMA had been relying on advice (obtained in 2015 when eSafety started operations and confirmed in March 2022) that the AusTender reporting arrangements at paragraph 7.18 of the Commonwealth Procurement Rules (CPRs) did not apply to the eSafety procurements. As CPR 7.18 is a relevant CPR for the purposes of the Government Procurement (Judicial Review) Act 2018, this advice was questioned during the conduct of the audit. ACMA updated the ANAO in December 2022, advising that it had signed a Memorandum of Agreement with the Department of Finance to have eSafety created as a reporting entity in AusTender and was in the process of quality assuring the bulk upload of contracts. (See also updated information in ACMA’s summary response to the proposed audit report at paragraph 20.)

Department of Finance (Finance)

6. Finance had put in place a process for dealing with potential complaints to the Procurement Coordinator that give rise to a conflict of interest (see paragraph 3.9) and had commenced updating its procedural documentation for the handling of Procurement Coordinator complaints (see paragraph 3.7). Finance advised the ANAO in September 2022 that it was giving consideration to response timeframes and how suppliers lodging a complaint to the Procurement Coordinator are kept informed of progress (see paragraph 3.62).

7. Finance advised the ANAO in July 2022 that it was:

• in the planning stage of a review of Resource Management Guide 422 (RMG 422)—Handling complaints under the Government Procurement (Judicial Review) Act 2018:
  

  The review will consider how the guidance has been used in practice, and given entities experience in receiving/dealing with complaints, how the guidance could be strengthened in light of that experience.

  …

  In conducting the review Finance will consult and seek feedback from Commonwealth entities subject to the Act, as well as Industry, on their experience with the Act and RMG 422, including managing complaints under the Act and issuing of Public Interest Certificates. Finance will also consider previous queries for clarification and feedback that has been received from entities in the review. The update of RMG 422 will not include changes to legislation or Australia’s international obligations.

  Following the consultation period, Finance will review the feedback received and identify relevant changes that could be made to improve RMG 422. Further consultation may be undertaken with entities based on the responses received and any changes that are proposed.

• establishing a Procurement Complaints Reference Group that will:
  

  provide a forum for members to engage openly and collaboratively on the procurement complaints management processes implemented by their respective entities. The Reference Group will focus on:

  • entity processes for managing, tracking and responding to procurement complaints
  • best practice procurement and lessons learnt to reduce future procurement complaints
  • guidance available or required to support entities to successfully manage procurement complaints
  • challenges entities may encounter with regards to procurement complaints

  Membership is proposed to be made up of procuring officials from approximately twelve entity central procurement teams. Terms of reference are being finalised and invitations to entities are expected to be sent out in the next fortnight.

8. Finance updated the ANAO in December 2022 on its progress with reviewing the complaints handling guidance on the Finance website, as well as its internal processes and guidance for handling Finance procurement complaints:

the Procurement Quality Review Team (PQRT) and Legal teams have collaborated to develop a range of initiatives to assist suppliers and Finance staff in handling procurement complaints:

1. The GPJR complaints online form has been amended to workflow to both PQRT and Legal team’s inboxes to ensure prompt receipt and processing of complaints. This was completed in October 2022 and Finance has since received and processed GPJR complaints from suppliers;

2. Working with Procurement and Insurance Division to delineate between advice on the Finance website regarding Whole-of-Australian-Government (WoAG) advice on procurement complaints and procurement complaints directed to Finance as an entity. The WoAG advice has been published (links below), and the Finance specific content is under review and pending approval for publication;

1. https://www.finance.gov.au/business/procurement/procurement-complaints-business
2. https://www.finance.gov.au/government/procurement/buying-australian-government/handling-procurement-complaints
3. https://www.finance.gov.au/business/procurement/procurement-coordinator-complaints-handling-charter

3. Subject to outward-facing content being approved and published, internal guidance is under re-development to provide more information and clarity to Finance staff on the process and roles in handling a procurement complaint; and

4. A central procurement complaints register is under development, pending upgrade of Finance software infrastructure. (See also updated information at paragraph 3.12.)

Appendix 3 ANAO audit methodology

1. The audit methodology included engagement with officials of the entities subject to audit, being the Department of Finance, the Department of Industry, Science and Resources, the Australian Communications and Media Authority (ACMA) and the Reserve Bank of Australia. The methodology also included the examination of entity records and websites.

2. Procurement is one of the corporate support services that ACMA provides to eSafety, which is an independent statutory office. The eSafety Commissioner is an official of ACMA for the purposes of the finance law within the meaning of the Public Governance, Performance and Accountability Act 2013, as per section 170 of the Online Safety Act 2021. ACMA’s policies and procedures apply to the ACMA and eSafety procurements equally and therefore the ANAO’s audit methodology does not distinguish between them.

3. The authoritative publications and legislation the ANAO referred to in the conduct of this audit included:

• Australian Standard AS 10002:2022, Guidelines for complaint management in organizations, March 2022;
• Office of the Commonwealth Ombudsman, Better Practice Complaint Handling Guide, February 2021⁸⁴;
• Government Procurement (Judicial Review) Act 2018 and related explanatory memorandum for the Government Procurement (Judicial Review) Bill 2017;
• Department of Finance, Resource Management Guide No. 422: Handling complaints under the Government Procurement (Judicial Review) Act 2018; and the
• Department of Finance, Commonwealth Procurement Rules, with all paragraph references in this audit report pertaining to the 1 July 2022 version unless otherwise specified.

4. The ANAO adopted the Better Practice Complaint Handling Guide definition of ‘complaint’, which is ‘an implied or express statement of dissatisfaction where a response is sought, reasonable to expect or legally required’.⁸⁵ The inclusion of ‘implied’ complaints is consistent with Australian Public Service Commission advice that, ‘It is good practice to be alert to communications that might constitute a complaint, even when the word “complaint” is not used’.⁸⁶ The ANAO also adopted the GPJR Act definition of ‘supplier’, being a person, partnership or other group ‘that supplies, or could supply, goods or services’. This encompasses the CPR definitions of ‘potential supplier’, ‘supplier’ and ‘tenderer’.

5. The ANAO did not engage with the complainants, and they have not been identified in the audit findings. Suppliers and other members of the public were welcomed to contribute via the ‘Contribute to this audit’ facility on the ANAO website.

Sampling method

6. The audit methodology included examining the procurement complaints information provided on entity websites and in a sample of approaches to market (such as in request for tender documentation). For each of the four entities subject to audit, the sampling method involved randomly selecting five covered procurements conducted by open tender, and three by limited tender, between 19 April 2019 and 16 February 2022. To ensure currency, two procurements that were open for tender during July to November 2022 were included in the sample for each entity.

7. The ANAO also produced comparator data by testing the complaints information that a sample of other Australian Government entities provided on their websites and in their request for tender documentation. The sampling method involved selecting every entity that had a tender open on 9 November 2021, 24 March 2022 and/or 4 August 2022.⁸⁷ This resulted in a sample size of 41 entities. The ANAO randomly selected three of the Department of Defence’s open tenders for testing (one from each of three Groups within Defence) and one open tender from each of the other 40 entities. As the ANAO downloaded the request for tender documentation from AusTender and did not engage with the 41 entities, they are not identified in the audit findings.

8. The 45 entities tested (being the four auditees and the 41 comparators) accounted for 84 per cent of contracts reported on AusTender in 2021–22 by number or 95 per cent by value.

Appendix 4 Extent of coverage of the GPJR Act provided through the Commonwealth Procurement Rules

1. The ANAO examined the extent of coverage by the Government Procurement (Judicial Review) Act 2018 (GPJR Act) that has been provided through the Commonwealth Procurement Rules (CPRs), including whether it was consistent with the scope of recommendation 11 of the July 2014 Senate Report and with meeting international obligations on government procurement. This Appendix 4 provides further detail on the audit findings summarised in paragraphs 2.76 to 2.87. A related ANAO recommendation is at paragraph 2.88.

Relevant CPRs

2. The CPRs incorporate the requirements of Australia’s international trade obligations and government policy in procurement into a set of rules, which apply to procurement conducted by relevant Commonwealth entities (see paragraph 1.2). The ‘relevant CPRs’ are defined in section 4 of the GPJR Act as:

(a) a provision of Division 1 of the Commonwealth Procurement Rules that is declared by those rules to be a relevant provision for the purposes of this paragraph; or

(b) Division 2 of the Commonwealth Procurement Rules.

3. The CPRs are non-disallowable legislative instruments issued by the Minister for Finance under section 105B(1) of the Public Governance, Performance and Accountability Act 2013. Changes introduced in the CPRs issued 20 April 2019 included adding paragraph 6.9 to declare the relevant provisions of Division 1 for the purposes of the GPJR Act definition above. As per Finance advice of March 2019 to the Minister, the provisions selected from Division 1 were ‘limited to those that reflect our international obligations’. The March 2019 advice also informed the Minister that:

The Office of Trade Negotiations and the Trade and Investment Law Branch in DFAT, and the Office of International Law in AGD were consulted and have provided legal advice to ensure the revised language in the CPRs is consistent with Australia’s international obligations. AGS provided advice on the operation of the CPRs and the Judicial Review Act.

4. The resulting relevant CPRs are outlined in Table A.1 below.

Table A.1: Relevant CPRs for the purposes of the GPJR Act

Source: ANAO analysis of section 4 ‘Definitions’, Government Procurement (Judicial Review) Act 2018, and of paragraph 6.9 of the Commonwealth Procurement Rules.

5. Finance also advised the Minister in March 2019 that if certain other changes were not made then ‘the scope of potential supplier complaints would be broader than what is required by Australia’s international obligations’. The proposed changes were included in the 20 April 2019 CPRs and involved narrowing the definition of ‘procurement’ so as to ‘reduce the risk of a complaint on matters that are not required by our international obligations’ (see further at paragraph 1.8) and moving three paragraphs that reflected Australian Government policy out of Division 2 and into Division 1. Specifically, paragraphs 10.32, 10.33 and 10.39 from Division 2 of the 1 January 2019 CPRs were moved to paragraphs 4.7, 4.8 and 7.26 in Division 1 of the 20 April 2019 CPRs:

• ‘to ensure broader benefits to the Australian economy is not caught by the GPJR Act’; and
• ‘to ensure contract management and standard verification is not caught by the GPJR Act’.

6. Other provisions that relevant entities ‘must’ comply with⁸⁸ that were not declared relevant CPRs for the purposes of coverage by the GPJR Act include paragraphs:

• 4.4 and 4.5 — officials must consider the relevant financial and non-financial costs and benefits of each submission and must be satisfied that the procurement achieves a value for money outcome;
• 4.9 — entities must comply with applicable procurement-connected policies;
• 4.12 — non-corporate Commonwealth entities must use coordinated procurements;
• 4.14 and 4.15 — entities joining an existing contract must ensure, among other things, that the goods and services being procured are the same as provided for within the contract and that the terms and conditions are not being materially altered;
• 6.6 — officials must act ethically throughout the procurement (see further at paragraphs 2.119 to 2.120);
• 6.7 — entities must not seek to benefit from supplier practices that may be dishonest, unethical or unsafe; and
• 6.8 — entities must apply timely, equitable and non-discriminatory complaint-handling procedures.

Covered procurement

7. Section 5 of the GPJR Act provides that a procurement is a ‘covered procurement’ if the rules in Divisions 1 and 2 of the CPRs apply and it is not included in a class of procurements specified in a determination made by the Finance Minister by legislative instrument.⁸⁹ There were no determinations made for this purpose on the Federal Register of Legislation as at 31 December 2022.

8. Division 1 of the CPRs applies to all procurement by non-corporate Commonwealth entities regardless of value, and to procurement by prescribed corporate Commonwealth entities when the expected value is at or above the relevant procurement threshold.⁹⁰ Division 2 applies if the expected value of the procurement is at, or above, the relevant procurement threshold.⁹¹ Exemptions are set out in paragraph 2.6 and Appendix A of the CPRs, which were amended by the Australian Government in the context of the GPJR Act commencing, as outlined below.

9. Paragraph 2.6 provides for the application of measures determined to be necessary in specified situations, such as for the ‘restoration of international peace and security’ or ‘to protect human health’. For the 20 April 2019 CPRs:

• the beginning of paragraph 2.6 was changed from ‘Nothing in any part of these CPRs prevents an official from applying measures…’ to ‘These CPRs do not apply to the extent that an official applies measures …’ and
• a footnote was added stating, ‘Where such measures are applied, because Divisions 1 and 2 do not apply in full to the procurement, this has the effect that the procurement is not a covered procurement …’

10. Appendix A, and related paragraphs 3.5, 3.6 and 3.9, were amended for the 20 April 2019 CPRs so that procurement of the kinds of goods and services listed in Appendix A⁹² would be exempt from the rules of Division 2 (and therefore would not be covered procurement) regardless of whether the entity chose to utilise the exemption. For example, paragraph 3.9 in the:

• 1 January 2019 CPRs commenced, ‘When an Appendix A exemption applies, and the relevant entity chooses to utilise the exemption, the procurement is exempt from the additional rules for procurements at or above the relevant procurement threshold (Division 2) …’
• 20 April 2019 CPRs commenced, ‘When an Appendix A exemption applies, the additional rules of Division 2 for procurements at or above the relevant procurement threshold do not apply to the procurement …’

11. Relevant entities must report contracts on AusTender valued at or above the reporting threshold.⁹³ AusTender does not record whether a contract award was by covered procurement. To get an indication of the extent of coverage, the ANAO estimated the proportion of reported contracts that were not covered by the GPJR Act during the three financial-years following its establishment (the AusTender data better supports the identification of procurement excluded from coverage than included).

• There were 193,871 parent contracts valued at $120.3 billion reported to start between 1 July 2019 and 30 June 2022 on AusTender.⁹⁴
• The ANAO removed all contracts that entities reported as having one or more characteristics that excluded them from coverage by the GPJR Act.⁹⁵ This left 20,576 contracts valued at $45.2 billion remaining.
• Therefore, suppliers were not provided access to the GPJR Act complaint mechanism for at least 89 per cent of contracts (173,295 contracts valued at $75.1 billion).

12. The above figure of 89 per cent will be an underestimation because it cannot be determined with confidence which of the remaining 11 per cent are or are not covered. For example, AusTender does not have an identifier for ‘construction services’ and so the remaining 11 per cent will include some construction services contracts valued below the $7.5 million threshold that are not covered by the GPJR Act.

Panel procurement is not covered

13. Panels are a tool for the procurement of goods or services regularly acquired by entities. The process to establish a panel will generally be subject to Divisions 1 and 2 and therefore be a covered procurement under the GPJR Act. Finance guidance to entities on procuring from panels includes:

Once a panel has been established, an entity may then purchase directly from the panel by approaching one or more suppliers. Each purchase from a panel represents a separate procurement process … A contract (often referred to as a Work Order or an Official Order) is formed under a Panel each time an entity purchases goods or services under the panel arrangement.

14. Changes introduced in the 1 January 2019 CPRs included specifying in paragraph 9.12 that ‘procurements from an existing standing offer are not subject to the rules in Division 2’. RMG 422 advises that procurements from standing offers under panel arrangements are not covered procurements for the purposes of the GPJR Act ‘as paragraph 9.12 of the CPRs indicates that these procurements are not subject to Division 2 of the CPRs’.

15. The exclusion of panel procurement substantially limits supplier access to the GPJR Act. The proportion of the number of reported contracts associated with a ‘standing offer notice’ on AusTender increased from 28 per cent in 2012–13 to 50 per cent in 2021–22. The largest of these panels contained 3,273 suppliers.⁹⁶ Panels established since 2021–22 include two new coordinated procurement panels, which are mandatory for use by non-corporate Commonwealth entities. As at 31 January 2023, 413 suppliers had been appointed to the new Management Advisory Services panel (to procure services commonly known as consultancies) and 84 suppliers appointed in the first of three phases of the new People Panel.

16. Finance’s records indicated that, to comply with Australia’s international obligations, suppliers with a complaint about an entity’s compliance with CPRs 5.4, 7.2 and 7.16–18 in relation to a procurement from a panel arrangement should be able to access the GPJR Act mechanism. CPR 5.4 requires that all potential suppliers to government be treated equitably. ANAO analysis has identified that for seven out of the top 10 panels by total value, at least 80 per cent of the panel’s total value was awarded to 20 per cent or less of the suppliers represented on the panel.⁹⁷ To achieve a value for money outcome, procurement should encourage competition and be non-discriminatory.

17. Excluding panel supplier access to the GPJR Act mechanisms does not sit comfortably with implementation of recommendation 11 of the Senate inquiry report. The report outlined a need for ‘some mechanism, beyond a complaint to the agency or the procurement coordinator, available to aggrieved parties’ and recommended that ‘Finance establish an independent and effective complaints mechanism for procurement processes’. Given most procurement by relevant entities is not ‘covered procurement’, and several mandatory provisions reflective of Australian Government policy are not ‘relevant CPRs’, the coverage of the GPJR Act is not sufficient to fully implement recommendation 11.

Appendix 5 Flow chart of the process established by the GPJR Act

1. The following is a high-level flow chart of the process established by the Government Procurement (Judicial Review) Act 2018 from Finance’s Resource Management Guide No. 422.⁹⁸

Appendix 6 Examples of complaint-related clauses in approach to market documentation

1. This appendix contains examples of some of the complaint-related clauses observed during this audit from sampled approach to market documentation covering 45 relevant entities. The intent is to present a range of examples that may be of interest to entities when reviewing their own documentation and is not to endorse the use of these clauses. Paragraph numbering has been simplified and so may not reflect the original.

Example 1: A complaints clause from a request for tender (RFT)

Example 2: A complaints clause from a request for tender template

Example 3: Simple clauses that refer suppliers to the entity’s website

Example 4: A detailed GPJR Act complaints clause

Example 5: A contact for probity issues in a Request for Proposal (RFP)

Appendix 7 Case studies of the handling of complaints to the Procurement Coordinator

1. This appendix contains case studies of the Department of Finance’s (Finance’s) handling of two complaints made to the Procurement Coordinator. These complaints took longer to resolve than was warranted in the circumstances and suppliers were rarely given a proactive update on progress. The handling of supplier complaints to the Procurement Coordinator is examined in Chapter 3, paragraphs 3.42 to 3.63.

Case study 1

2. The supplier lodged a complaint on 30 August 2021 and was advised of the outcome on 22 March 2022. The complaint was not accepted for investigation because it was not about an Australian Government procurement.

Source: ANAO analysis of Finance records.

Case study 2

3. The supplier lodged a complaint on 20 December 2020 about an active tender process and was advised of the outcome of the Procurement Coordinator’s investigation on 3 November 2021.

Source: ANAO analysis of Finance records.