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There is nothing to fear when Procurement & Correct Management is done well: Insights from the ANAO

Making the Australian National Audit Office (ANAO) or the National Anti-Corruption Commission (NACC) the procurement 'bogeyman' is not the answer to push for better procurement practices. Applying best practices to procurement, applying an ethical lense, declaring conflicts of interest, engaging in appropriate conduct and following agency procedures is!
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Healthy Performance Culture
14 June 2024
Saskia Keenan
3 minutes

Making the Australian National Audit Office (ANAO) or the National Anti-Corruption Commission (NACC) the procurement 'bogeyman' is not the answer to push for better procurement practices. Applying best practices to procurement, applying an ethical lense, declaring conflicts of interest, engaging in appropriate conduct and following agency procedures is!

There is really nothing to fear if you apply best practice to procurements to get the best outcome.

On 3 April 2023 the Australian National Audit Office (ANAO) released its audit insights into Procurement and Contract Management within the Australian Public Service (APS). We have reviewed these recent insights, along with the many others provided by organisations like the ANAO over the years and offer some key observations that appear thematically on matters relating to Government commercial activities, both now and in the past. Our observations are grouped into give key areas:

  1. The requirement of both commercial and subject matter specific expertise
  2. Governance and record keeping (or specifically the lack of)
  3. Processes and localised policy over Commonwealth Procurement Rules (CPRs) and Public Governance, Performance and Accountability (PGPA)
  4. Effective and ethical engagement with industry and
  5. Probity.

The ramifications of expertise drain, including in procurement and contract management expertise leaving the APS is evident. The cornerstone of procurement processes, and indeed the CPRs is Value for Money (VFM). However, this cannot be realised when procurements and contract management are not resourced, timed, or planned appropriately.

 

Expertise

Government procurement and subsequent management takes time, effort and considerable expertise. However, generally, we see procurement activities that are neither resourced, timed, or planned appropriately. External resources are often called in to "fix it". The reality is what externals are called on to fix could easily be remediated internally through frank conversation and planning of procurement activities.

Planning is essential. Early procurement planning could assist the APS to conduct procurements independently in line with the guidance provided by central procurement areas, The Department of Finance, and the Digital Transformation Agency. If indeed resources cannot be harnessed internally, that is when external management teams, can, and should, be called in to assist.

External resources can offer assistance across the suite of themes addressed by the ANAO, but should also assist the APS with knowledge transfer and information sharing to ensure officers are equipped to facilitate the commensurate procurements independently next time, where resourcing permits.

 

Governance and Record Keeping

"Playing with impact", is one of our company mottos, is just one of our points of difference. In living by this motto, we endeavour to work witht he APS to ensure appropriate and defensible governance processes are implemented, while at the same time recording decisions and the reasons for these implementations. Better allowing agencies to meet audit requirements.

 

Process and Policy

While there are experts in the CPRs, procurement connected policies and wider national and international requirements (such as Australian Industry Capability and International Trade and Arms Regulation) we come across many internal departmental policies and processes that, whilst intended to support procurement processes, often contribute to the proliferation of administrative burden and thus timeframes associated with any procurement activity. when these matters are apparent, we assist the APS to navigate this complex web. Working to introduce efficiencies, in line with LEAN principles, while working with the Delegate to differentiate between what is legally required and what is a 'nice to have'. Ultimately all procurement activities need to be commensurate with scale and scope, as provided by the CPRs.

The ANAO report also makes some reference to the utilisation of panel procurements. According to guidance provided by the Department of Finance, where a panel is available, a panel should be used. Procurements through any panel arrangement are, by their very nature, open approaches to market, and through the establishment of the panel (and the process required to be on the panel), VFM has been proven. We have come across many instances of where panels should, and can, be used more effectively.

 

Efficiency and Effectiveness

One advantage of pouring through panels is that there is no need to approach for any good of service. Sometimes you may also just need to go to a particular company, such as when you are continuing a license for facilitating sustainment of a good, where business areas may very well be best approaching only one supplier on the panel.

When we know what we need and what the outcomes of our procurement will be, then there is no reason why you can't just 'own' that decision, as opposed to placing an undue (and expensive) burden on industry to respond to a tender that they will not win. Frank and fearless advice is key here. The delegate, once presented with all the information required to make a decision, always has the option of directing a different course of action to be taken, should they deem a procurement process not to meet their strategic objectives.

 

Probity

Last, the theme of probity and conflict of interest management has been highlighted again. The management of probity is key in any commercial activity are best placed to engage a probity advisor who can work across the business area and its varying commercial activities. That allows that probity advisor to be cognisant of the business, nuances and processes of the agency and its desired outcomes, while providing an independent and objective probity focus that allows holistic management of conflicts of interests that are so often outlined in ANAO reports.

Procurement need not be complex; Contract Management need not be complex either. Engaging an effective partner to provide assistance, best practice guidance, and knowledge transfer to the APS allows agencies to comprehensively address the themes in this ANAO audit can be effective and ultimately lead to better procurements, more comprehensive contract management, and improving the likelihood of achieving the core of the Commonwealth Procurement Rules; Value for Money.

If you're interested in discussing your procurement or contract management activities with Synergy Group's Strategic Sourcing team, please feel free to reach out to Saskia Keenan at skeenan@synergygroup.net.au or Bobbi Campbell at bcampbell@synergygroup.net.au


References and useful resources:

Procurement and contract management | Australian National Audit Office (ANAO)

Procurement | Department of Finance

ICT procurement | Digital Transformation Agency (dta.gov.au)