18 May 2026

Dr Caralee McLiesh PSM
38 Sydney Ave
FORREST ACT 2603
By email: caralee.mcliesh@anao.gov.au

Dear Auditor-General,

Re: Proposed inclusion in the 2026–27 Annual Audit Work Program - further Commonwealth procurement reporting and analysis of CPR paragraph 2.6

I write to propose that the Australian National Audit Office include a performance audit on Commonwealth procurement in the 2026–27 Annual Audit Work Program, building on the ANAO’s series of procurement information reports and with a particular focus on the use of paragraph 2.6 exemptions under the Commonwealth Procurement Rules (CPRs).

I note that a similar proposal relating to Commonwealth procurement is referenced at the end of the 2026-27 draft Annual Audit Work Program, and this letter is intended to support and add context to that suggested area of work.

The ANAO’s previous procurement-wide information reports have made a significant contribution to Parliamentary oversight and public transparency. The most recent update, Australian Government Procurement Contract Report – 2022 Update, covering procurement activity to 30 June 2022, highlighted the scale and growth of procurement conducted outside standard open tendering arrangements, including extensive reliance on CPR paragraph 2.6 exemptions and limited tendering provisions.

That report identified that, between 2018–19 and 2021–22, 4,135 contracts invoking paragraph 2.6 exemptions were entered into, with a reported value of approximately $29.7 billion. This represents a substantial proportion of Commonwealth procurement expenditure conducted entirely outside the CPR framework.

Paragraph 2.6 operates to remove the application of the CPRs entirely where an accountable authority determines that exemptions are necessary for specified purposes, such as national security, human health or international peace and security. Where paragraph 2.6 is applied, procurement activities are generally not required to be reported on AusTender, substantially limiting visibility of these arrangements for the Parliament and the public.

Given the value and volume of contracts invoking paragraph 2.6 in recent years, there remains limited whole-of-government analysis of how these exemptions are being applied in practice, the extent to which value for money is demonstrated and documented, and whether current governance and oversight arrangements provide adequate assurance in the absence of the CPR framework.

Against this background, I respectfully suggest that the ANAO consider a performance audit on procurement trends between 30 June 2022 to now, including targeted audit or assurance work examining the use of CPR paragraph 2.6 exemptions.

Such work would support informed Parliamentary scrutiny of public expenditure conducted outside the standard CPR framework and assist in assessing whether existing policy settings and accountability mechanisms remain fit for purpose.

I appreciate the Auditor-General’s independence in determining the content of the Annual Audit Work Program and offer this proposal for consideration as part of that process.

Your sincerely,

Dr Monique Ryan MP