1. Executive Summary

The Joint Committee of Public Accounts and Audit (JCPAA) inquiry into Commonwealth procurement was based on the following Auditor-General reports:
Management of the Contract for the Telephone Universal Service Obligations, No. 12 (2017-18)—administered by the Department of Communications and the Arts (DCA)
Management of the Pre-construction Phase of the Inland Rail Programme, No. 9 (2017-18)—administered by the Australian Rail Track Corporation (ARTC)
Procurement of the National Cancer Screening Register, No. 61 (2016-17)—administered by the Department of Health (Health)
Procurement is an integral part of the way the Australian Government conducts business and provides services, and is therefore core business for Commonwealth entities.
Procurement by most Commonwealth entities is governed by the Commonwealth Procurement Rules (CPRs), issued under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The CPRs combine Australia’s international obligations and good practice, and enable agencies to design processes that are robust and transparent. Compliance with the CPRs is mandatory for all non-corporate Commonwealth entities and some prescribed corporate Commonwealth entities.
Achieving value for money is expected to be a central consideration of Commonwealth procurement activities. Competition in procurement is important for a number of reasons, including the benefits that competitive pressure brings to demonstrating probity and value for money outcomes.
By taking a thematic approach to some of its Commonwealth public sector inquiries, the Committee seeks to encourage improvements and shared learning in key areas of public administration. Effective Commonwealth procurement will continue to be a strong focus of the JCPAA in its role in scrutinising the governance, performance and accountability of Commonwealth agencies.
Chapters 2-4 of this report set out the review of evidence, and the Committee conclusions and recommendations, as follows:
Chapter 2—Management of the contract for the Telephone Universal Service Obligations
Chapter 3—Management of the Pre-construction Phase of the Inland Rail Programme
Chapter 4—Procurement of the National Cancer Screening Register (NCSR)
The Committee has recommended action on a range of matters, as set out in Chapters 2-4, including:
that DCA report back: on whether it will be utilising flexibility mechanisms under the Telstra Universal Service Obligation Performance Agreement (TUSOPA) to improve value for money outcomes; with a time estimate for location of other possible records relevant to Audit Report No. 12; on how the department’s TUSOPA contract performance reporting verification and assurance processes have been strengthened; and on the transition from TUSOPA to the new Universal Service Guarantee
that ARTC: report back on actions taken to develop an appropriate risk management system for both the Corporation and the Inland Rail program; and provide the Committee with a copy of the procurement rules and/or guidelines used for the Inland Rail project to demonstrate that Corporation staff have adequate procurement guidance
that the Parliamentary Budget Office consider how information in the Budget papers could be augmented to enhance parliamentary scrutiny of the expected rates of drawdown for investments and value of commitments without compromising commercially sensitive information
that Health report back on: how it will improve consideration of risk during future procurement planning; whether the Auditor-General had access to all of the departmental records relevant to Audit Report No. 61; how it is improving procurement documentation and record keeping; how, for future procurements, it is ensuring full implementation of the approach set out in the Tender Evaluation Plan; the objectives and planned performance information for the NCSR; and how it is proactively managing the NCSR contract and monitoring progress to ensure value for money
that Health further report back on whether, in the circumstances of serious underperformance by Telstra Health, it may be in the Commonwealth’s interests to terminate the contract and pursue other options for either or both registers; and advice as to what penalties the Commonwealth could consider seeking from Telstra Health, given the significant extra costs incurred as a result of this delay
that Health provide the Committee with six monthly updates on: the implementation status of the national bowel cancer screening register and national cervical cancer screening register transition under the NCSR; and participation rates, by quarter, under the new national cervical cancer screening program
that Health also provide an update on its compliance with conflict of interest requirements; and seek advice from the Australian Public Service Commission (APSC) as to the adequacy of its response to a senior departmental officer having voted for a company as a preferred tenderer while owning undeclared shares of that company, and provide further advice to the Committee on this matter and the additional steps it will take to ensure such actions do not occur in the future
that the Department of Finance, together with the APSC, write to all Commonwealth entities reminding them of their obligations as regards full compliance with conflict of interest requirements

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