Chair's Preface
This important inquiry has explored the operation and
effectiveness of the Commonwealth Procurement Rules (CPRs), set out the rules
for government procurement as well as procurement related policies, as they
relate to the participation of Australian companies and businesses. The inquiry
has also explored the impact of Australia’s international obligations arising
from bilateral free trade agreements on procurement policies.
The committee has formed the view that government
procurement policies, as part of the value-for-money assessment, should take
into account the impact of the government’s procurement decisions on communities
and on the broader economy.
Throughout this inquiry, witnesses made clear to the committee
that the value-for-money proposition is not only a matter of comparing prices,
it is a matter of assessing the broader benefit, as well as the costs, of the
available options. Hence the urgent need for a stronger methodology to assess
whole-of-life costs within the value-for-money assessment part of the
procurement decision-making process.
The committee has also formed the view that with the
consideration of the broad economic benefits of procurement as part of a
comprehensive value-for-money assessment, the effective application of the
range of procurement-related policies, combined with scrutiny and
accountability measures, procurement outcomes for Australian companies would be
considerably improved without impacting on our international obligations.
For example, it may be that increased employment, enhancing
the skills base of the economy and boosting tax revenue will vastly outweigh
what might have been gained from an initial procurement decision based on price
alone.
Further, the application of the non-discrimination principle
was cited throughout the inquiry as having the potential for inadvertently
discriminating against Australian manufacturers. The committee is strongly of
the view that effective procurement policy must ensure that Australian firms
have at least an equal opportunity to compete, tender and win contracts.
The committee is also gravely concerned for the future of
the Australian Industry Participation (AIP) programs and policies – which
include AIP Plans in government procurement, Enterprise Solutions Program,
Supplier Advocates and the Buy Australia at Home and Abroad Initiative. These
programs were cut in the 2014 Federal Budget. The committee calls for these
programs to be continued.
These programs were introduced by the previous Labor
Government to support Australian Industry and provide innovative solutions for
government. The $82.3 million cut from these programs in the present government’s
budget will act as a brake on Australia’s economic growth and diversity.
The principles guiding that policy enshrined in the Australian
Jobs Act 2013 should continue to be followed, and government procurement
decisions should be subject to regular review, heightened scrutiny and
transparency by the Australian National Audit Office.
The committee supports the intent of bilateral free trade
agreements, yet notes that evidence suggested that the Australian Government
could do more to ensure local industries and locally manufactured content is
enabled to participate fully, is not discriminated against (inadvertently or
otherwise) by fully capitalising on exemptions provided for in those agreements
– as it was heard is the case in other countries.
Government procurement decisions may well be a significant
determinant of the social and economic health of many Australian communities
and regions. As a result, great care needs to be taken in the policy, practice
and operation of the Commonwealth Government procurement rules if they are to
operate in the interests of the Australian people.
Senator Kate Lundy
Chair
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