1. Introduction

Referral and conduct of the Inquiry

The Joint Select Committee on Government Procurement was established by a resolution of appointment passed by the Senate and the House of Representatives on 1 December 2016. The Committee was established to inquire and report on the Commonwealth Procurement Framework, particularly the new Commonwealth Procurement Rules. The Committee was asked to report by 31 May 2017. The Senate on 10 May 2017 and the House of Representatives on 11 May 2017 passed a resolution to extend the reporting date to 30 June 2017.
Details of the Inquiry were made available on 21 February 2017 on the Parliament of Australia’s website, including a call for written submissions. The Inquiry was also promoted through a mail out to interested parties; including peak bodies, organisations and relevant government departments. The Chair and Deputy Chair created a short video encouraging participation in the Inquiry process.
Over the course of the Inquiry, the Committee received 53 submissions. A list of submissions is at Appendix A.
In addition, the Committee undertook three public hearings, in Canberra on 29 March 2017 and 8 May 2017 and in Melbourne on 19 April 2017. Details of the public hearings, including a list of witnesses can be found in Appendix B.

Scope of the Inquiry

The terms of reference require the Committee to inquire and report on matters relating to the Commonwealth Procurement Framework, including:
consideration of the revised Commonwealth Procurement Rules, which came into effect on 1 March 2017; and
the extent to which the revised Commonwealth Procurement Rules and related procurement instruments can be affected by trade agreements including the World Trade Organization (WTO) Government Procurement Agreement (GPA).
The Committee focused on the interpretation and implementation of the revised Commonwealth Procurement Rules.

Structure of the Report

Chapter 2 provides background information on Australia’s Commonwealth Procurement Framework, including statistics on government procurement, the role of procurement and an overview of policies and guidelines which shape procurement decisions.
Chapter 3 examines the new clauses in the revised Commonwealth Procurement Rules, setting out the text of the clauses and providing a brief analysis of the changes and their benefits.
Chapter 4 examines concerns raised over the implementation process for the procurement system prior to the introduction of the amended Commonwealth Procurement Rules. The Chapter also explores the risks which may result from the concerns identified and concludes with a case study that demonstrates the issues discussed in the Chapter.
Chapter 5 discusses suggested revisions to the new clauses before focussing on the guidelines and training required to address some of the implementation issues raised in Chapter 4. It also examines suggestions to reinstate a number of procurement connected policies.
Chapter 6 looks at a range of further issues to be considered to ensure efficient implementation of the new clauses including: cultural change, weighting, applying Australian standards, transparency, design and innovation, contract management and accession to the WTO GPA.
Chapter 7 considers international best practice in procurement with a particular focus on practices which may be applicable to the Australian context.
Chapter 8 considers the examples of procurement practice from Victoria and South Australia which could be useful in refining the Commonwealth system.
Chapter 9 provides the Committee’s conclusions and recommendations.

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