Appendix 6: Procurement activities
The Commonwealth purchasing policy framework is outlined in the Commonwealth Procurement Guidelines — January 2005 (the Guidelines).
Performance against core purchasing policies
The ANAO’s purchasing activities in 2006–07 have been undertaken in adherence with the objectives set out in the Guidelines, particularly in the contracting out of financial statement audits and its internal administration. Open tender processes were conducted to seek high quality services that provided value-for-money solutions for the ANAO.
To ensure that we meet the objectives and mandatory requirements set out in the Guidelines, the Auditor-General’s Procurement Instructions and associated Procedural Rules are periodically updated, essentially to take account of the mandatory requirements of the Guidelines. In some areas, we have established panels of contractors and consultants with particular capabilities to meet ongoing needs. The performance of these outsourced arrangements is outlined in the ‘Management and Accountability’ section of this report.
Our Annual Procurement Plan for 2006–07 was published in Austender in June 2006.
We continue to consider a range of factors to ensure that our processes are fair and equitable and that all potential suppliers have opportunities to compete for our business.
Policy on the selection and engagement of consultants
We use consultants on a needs basis for a variety of tasks. The most common uses of contracted-in consultants include the application of expert professional skills to:
- investigate or diagnose a defined issue or problem;
- carry out defined research reviews or evaluations;
- provide independent advice, information or creative solutions; or
- provide specialised services, including assistance with the development and/or implementation of purpose-built IT systems and with legal advice.
Using an open tender process, we have selected and maintained a panel of consultants for audit-related work. In addition, consultancies for larger activities (audit or non-audit related) are put out to tender when required.
A suite of standard form contracts has been developed for use by our staff in setting up consultancies. Where necessary, these standard form documents can be readily adapted by our staff to suit individual circumstances.
When consultants are contracted in to provide services under the Auditor-General Act 1997, each must sign a Deed of Confidentiality to ensure they are aware of their legal commitment to the relevant confidentiality and secrecy provisions under that Act. Consultants may exercise those powers only in respect to the services for which they are contracted.
Summary of consultancy information
Table A6–1 lists the consultancies valued at $10 000 or more that were let in 2006–07. The total figure refers to total value of the contracts let, irrespective of the period of the contract, noting that some contracts are let for periods in excess of one year.
Table A6-1: List of consultancy contracts let in 2006-07 valued at $10 000 or more
| Note 1. | Explanation of selection process terms drawn from the Commonwealth Procurement Guidelines (January 2005): Open Tender. A procurement procedure in which a request for tender is published inviting all businesses that satisfy the conditions for participation to submit tenders. Select Tender. A procurement procedure in which the procuring agency selects which potential suppliers are invited to submit tenders in accordance with the mandatory procurement procedures. Direct Sourcing. A procurement process, available only under certain defined circumstances, in which an agency may contact a single potential supplier or suppliers of its choice and for which conditions for direct sourcing apply under the mandatory procurement procedures. Panel. An arrangement under which a number of suppliers, usually selected through a single procurement process, may each supply property or services to an agency as specified in the panel arrangements. |
| Note 2. | Justification for decision to use consultancy: A—skills currently unavailable within agency. B—need for specialised or professional skills. C—need for independent research or assessment. |
A comparison of the total value of consultancy contracts valued at $10 000 or more over the years 2004–05 to 2006–07 is set out below.
Table A6–2: Consultancy contracts valued at $10 000 or more 2003–04 to 2006–07
29 Each of the four listings for Applied Financial Diagnostics, were separate contracts for analysis of different funded projects. Each contract involved payment of a daily fee up to a fixed financial cap. In each case, the consultants took more days than was budgeted, at no additional cost to the ANAO.