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Commonwealth Procurement Guidelines

July 2009

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The Australian Government is one of the largest purchasers of goods and services in Australia, procuring goods and services of around $24 billion annually. Australian-based goods and services represent $16.5 billion (69%) of this total.

As a result, the Government has firm guidelines around procurement processes for its agencies and departments. The Commonwealth Procurement Guidelines represent the policy framework under which agencies govern and undertake their own procurement. Chief Executives are responsible for the management of the individual agencies, however they are also required to manage within the context of the Government’s policy framework. The Guidelines also inform departments and agencies about the Government’s policy for new Coordinated Procurement Contracting Arrangements.

Changes updating the Commonwealth Procurement Guidelines were made in October 2008, taking effect on 1 December 2008. The revised guidelines focus on achieving improved value for money through the negotiation of whole-of-government procurement contracts.

“The Government awards contracts totaling about $30 billion a year to procure goods and services. Improved value for money will be achieved through aggregation of government demand and negotiating whole-of-government procurement contracts in variety of core government areas, such as IT, professional services and travel.”

Where the Government establishes coordinated procurement contracting for a particular property or service, agencies must use the contract established for that property or service unless an exemption has been provided. These arrangements will reduce duplication between agencies in meeting common procurement requirements and provide the ability for the Government to use its combined purchasing power to improve value for money.

The Rudd Government is also committed to implementing measures to assist Australian small businesses to gain access to the Australian Government procurement market.

“Where it is sensible to do so, we will be looking to standardise procurement documents to ensure consistency in format, content, application and contracts. These documents will make it easier for small businesses to sell their goods and services to the Australian Government. My Department has already developed Source IT contract templates for Australian Government agencies for a range of simple ICT procurements.”

Agencies will also be required to review operations with a focus on simplifying procurement processes, particularly examining potential to reduce burdens for SMEs participating in tenders.

Mr Tanner also noted that in order to enhance transparency, agencies must make available on request, the names of any sub-contractor engaged by a contractor in respect of a Commonwealth contract for procurement.

Summary of Key Changes

The following is a summary of the main changes to the guidelines in October 2008:

The Commonwealth Procurement Guidelines are available at http://www.finance.gov.au/publications/fmg-series/procurement-guidelines/index.html.

The Minister’s media release (10 October 2008) is available at http://www.financeminister.gov.au/media/2008/mr_312008.html.

Update – Procurement Statement

On 28 July 2009 the Government released the Australian Government Procurement Statement – a package of reforms to further improve and foster greater transparency in government purchasing.

The Minister for Finance and Deregulation, the Hon. Lindsay Tanner, said the Government was committed to opening up the tendering processes of government to ensure improved accountability and to help firms to compete for government contracts.

A key component of the statement is the appointment of a Procurement Coordinator who will have oversight of Commonwealth procurement practices and policies.

The Minister for Finance and Deregulation’s media release (28 July 2009)is available at http://www.alp.org.au/media/0709/msfind280.php.

The Australian Government Procurement Statement is available at Procurement\Australian Government Procurement Statement July 2009.PDF.

Further information about procurement is available at the Department of Finance and Deregulation website at http://www.finance.gov.au/procurement/index.html.

Update – Funding boost

On 28 July 2009 the Minister for Innovation, Industry, Science and Research, the Hon. Kim Carr, announced a range of measures totaling $19.1 million to enhance the ability of Australian industry and workers to win government contracts.

The Industry Capability Network (ICN) will receive an extra $8.5 million over four years through the Suppplier Access to Major Projects (SAMP) program to give Australian companies a better chance of securing government work.

Eminent business specialists will be appointed as Supplier Advocates to champion Australian industry in the government marketplace and improve competitiveness ($8.2 million over four years).

Tenderers will be required to submit Australian industry participation plans that give local business a fair chance at winning major Commonwealth contracts and work on Commonwealth-funded infrastructure projects, including projects supported by the Building Australia Fund ($2.5 million over four years).

The Minister for Innovation, Industry, Science and Research’s media release (28 July 2009) is available here.

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