Improving Procurement Performance

Wednesday, September 21st, 2016

The Australian National Audit Office (ANAO) published, in September 2016, a report related to offshore processing centres in Nauru and Papua New Guinea. It is very timely and informative for the UK Government, given the Brexit outcome. The Australian Government was anxious to avoid asylum seekers risking their lives on boat journeys to Australia, hence the procurement that was subjected to audit (Report No 16 2016-17). The audit formed serious flaws in procurement. There are serious lessons to be learnt.

The following are extracts from the report:

  • Management of procurement activity has fallen well short of the effective procurement practice
  • This audit has identified serious and persistent deficiencies in the three phases of procurement activity undertaken since 2012 to: establish the centres; consolidate contracts; and achieve savings through an open tender process
  • The department user approaches which reduced competitive pressure and significantly increased the price of the services without government authority to do so
  • The conduct and outcomes of the tender process highlight procurement and capability gaps amongst departments personnel at all levels
  • The department was unable to demonstrate the achievement of value for money in three of the four procurement processes
  • The department did not require Transfield (a service provider) to provide a proposal specifying services to be delivered and a price
  • Service requirements and prices were not settled until contracts were entered into
  • There is no available record of specific conflict of interest declarations having been made by departmental officers who were responsible for the procurement
  • Individual assessor records were incomplete and there were missing documents in relation to various aspects of the process