Recommendation 1

9.10

The Committee recommends that the Department of Finance revise clause 10.9(c) of the Commonwealth Procurement Rules to require all goods purchased by the Australian Government to comply with Australian standards unless none are applicable.

Recommendation 2

9.16

The Committee recommends that the Attorney-General’s Department oversee the introduction and application of a procurement connected policy requiring Commonwealth agencies to evaluate suppliers’ compliance with human rights regulation.

Recommendation 3

9.20

The Committee recommends that the Department of Environment oversee the introduction and application of a procurement connected policy requiring Commonwealth agencies to evaluate the whole-of-life environmental sustainability of goods and services to be procured.

Recommendation 4

9.23

The Committee recommends that the Department of Industry, Innovation and Science enhance the procurement connected policy for Australian Industry Participation Plans, requiring that good procurement practices are implemented down through the supply chain so that both prime and subcontractors:

implement best practice terms and conditions; and

are contractually obligated to report on those terms and conditions.

Recommendation 5

9.34

The Committee recommends that all Commonwealth contracts contain a similar clause to Commonwealth Contracting Suite clause 10, ensuring that the obligations of prime contractors apply to all sub-contractors.

Recommendation 6

9.38

The Committee recommends that rural and regional small and medium businesses be added to the list of exemptions under Appendix A: Exemptions from Division 2 of the Commonwealth Procurement Rules.

Recommendation 7

9.40

The Committee recommends that the Department of Finance and the Department of Industry, Innovation and Science jointly develop and implement a framework to collect relevant data on the degree of Commonwealth procurement that is supplied by Australia-owned businesses, contains Australian-manufactured goods, or uses Australian-based services.

Recommendation 8

9.45

The Committee recommends that, in negotiating future trade or World Trade Organisation agreements, Australia not enter into any commitments that undermine the Australian government’s ability to support Australian businesses.

Recommendation 9

9.50

The Committee recommends that the Department of Finance, or the proposed Australian Industry Advocate, publish comprehensive implementation guidelines for the new Commonwealth Procurement Rules as a matter of priority. The guidelines should:

explicitly define what constitutes economic benefit;

prescribe a minimum 15 per cent weighting across a tender in accordance with the economic benefit criteria;

procuring agency or Minister to retain discretion to increase weighting to leverage economic benefit;

encourage maximisation of economic opportunities and benefits when assessing a tender for the degree of local content and participation;

outline how rubrics or weighted criteria may be used to compare the unique economic benefits offered by different suppliers and in assessing economic benefit as part of the overall tender evaluation;

describe techniques for assessing the veracity of suppliers’ claims of economic benefit and for ensuring these benefits are delivered; and

encourage the consideration of innovative solutions during the scoping and design stage of procurement projects.

Recommendation 10

9.52

The Committee recommends that, in order to limit discretionary decision-making, promote consistency and safeguard transparency, the guidelines prohibit the use of qualitative assessments across whole tenders.

Recommendation 11

9.54

The Committee recommends that the guidelines specifically require that, for all procurements over $4 million, a record is created including:

the reason for the tender approach chosen;

the reason for the selection of the preferred tenderer; and

details of the economic benefit score.

Recommendation 12

9.56

The Committee recommends that the Department of Finance design and deliver a public service wide training program to support the effective implementation of the new Commonwealth Procurement Rules in line with new guidance material.

Recommendation 13

9.57

The Committee recommends that the Australian government ensures that all departments and agencies must ensure that an individual has successfully undergone procurement training before that individual can be delegated a procurement authority.

Recommendation 14

9.64

The Committee recommends that the Australian Government legislate as a statutory authority under the responsibility of the Minister for Industry, Innovation and Science an Australian Industry Advocate to:

aid Commonwealth agencies to design procurement processes which maximise benefits to the Australian economy and increase opportunities for SME participation;

support Australian businesses to access Commonwealth procurement by promoting opportunities and assisting businesses to promote the economic benefits they can offer;

provide independent, transparent and consistent evaluation of the unique economic benefits offered by different suppliers;

guide Commonwealth agencies’ application of weighted criteria and assessment rubrics to overall procurement evaluations; and

monitor suppliers’ delivery of contracted economic benefits.

Recommendation 15

9.67

The Committee recommends that the Department of Finance incorporate supplier feedback, including on the rewording of clauses identified in this report, into its 12 month review of the new Commonwealth Procurement Rules. It also recommends that the findings of the review are made public.

Recommendation 16

9.71

The Committee recommends that a Parliamentary inquiry is established by March 2018 to evaluate:

supplier feedback, including on the rewording of clauses identified in this report;

interaction with the Anti-dumping framework and the tax system; and;

recent changes to the Australian Industry Participation Plan policy.

The inquiry should report by the end of 2018.

List of Recommendations