Bills Digest No. 26, 2018–19
PDF version [380KB]
Juli Tomaras
Law and Bills Digest Section
17
September 2018
Contents
Purpose
of the Bill
Structure of the Bill
Background
Committee consideration
Policy position of non-government
parties/independent
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Part 1—Preliminary
Part 4—Complaints, investigation and
suspension of procurement process
Remedies
Part 2—Injunctions
Part 3—Compensation
Part 5—Miscellaneous
Date introduced: 25
May 2017
House: House of Representatives
Portfolio: Finance
Commencement: The earlier of a single day to
be fixed by Proclamation or six months after Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
September 2018.
Purpose of the Bill
The Government Procurement (Judicial Review) Bill 2017
(the Bill) proposes to fill a gap in the current arrangements in administrative
law relating to Commonwealth procurement, and to address obligations under
relevant free trade agreements,[1]
by creating new rules for making and investigating complaints in relation to
the contravention of relevant Commonwealth Procurement Rules (CPRs).[2]
Specifically, the Bill:
- provides
domestic and foreign tenders/suppliers with a statutory basis to challenge an actual
or apprehended Commonwealth procurement decision for a contravention of
relevant parts of the CPRs by providing the Federal Court, and the Federal
Circuit Court (the Courts) the power to deal with particular procurement
disputes (relating to ‘covered procurements’), and grant injunctions or order
compensation to aggrieved suppliers for a breach of the relevant CPRs[3]
- makes
it mandatory for the aggrieved supplier at first instance, to refer the
complaint for investigation by the accountable authority for the relevant
Commonwealth entity, before the supplier can bring a complaint before the
Courts and
- requires
the accountable authority to suspend the procurement while the complaint is
being investigated, unless the secretary of that authority has issued a ‘public
interest certificate’ for that procurement.
Structure of the Bill
The Bill comprises five parts:
Part
1 (items 1–7)
contains definitions of key terms used throughout the Bill, and a provision
about the application of the Bill.
Part
2 (items 8–14)
confers jurisdiction on the Courts to hear government procurement complaints
where the relevant CPRs are breached and to grant an injunction in relation to
the contravention, where the supplier has first taken genuine steps to resolve
the complaint. There is a ten day time limit for raising the complaint with the
court, however this may be extended.
Part
3 (items 15-16) confers jurisdiction on the Courts to order the payment of compensation where
there has been a contravention of the relevant CPRs. The ten day time limit
does not apply to an application for compensation.
Part
4 (items 17–20) contains provisions enabling an aggrieved supplier to make a complaint
to the accountable authority of a relevant Commonwealth entity, triggering an
investigation of the complaint. This step must
be taken before an application is made with the Courts. The power of the ‘accountable authority’ to suspend a procurement pending
the resolution of the complaint is described by this Part.
Part
5 (items 21–25) contains miscellaneous provisions most notably relating to the issuing
of a public interest certificate, a clarification that a contravention of the
CPRs does not affect the validity of a contract, and a transitional provision
relating to contraventions of CPRs that occurred before the commencement of the
Act.
Background
The Public Governance,
Performance and Accountability Act 2013 (the PGPA Act) creates a
framework dealing with issues of governance, accountability, performance and
the use of resources across Commonwealth bodies. The PGPA Act imposes a
number of duties on ‘accountable authorities’[4]
of Commonwealth entities.
Most relevant to the subject matter of this Bill, accountable
authorities of all Commonwealth entities must govern the entity in a way that
promotes proper use and management of public resources, where ‘proper’ means
efficient, effective, economical and ethical.[5]
Accountable authorities of non-corporate Commonwealth entities must govern that
entity in a way that is not inconsistent with the policies of the Australian
Government.[6]
Consistent with this duty, an accountable authority can establish controls to
ensure that officials consider the proper use (i.e. efficient, effective,
economical and ethical use) of public resources.
Procurement is not simply about purchasing goods and/or
services for an entity. Procurement is often nuanced and intertwined with
several core functions and deliverables of an entity, which may in turn impact
on considerations used to undertake a procurement. Procurement involves a
series of activities and processes that are necessary for an entity to make
inquiries, source, identify, communicate with and strategically vet suppliers, negotiate
and establish terms for acquiring goods, services or works vital to an entity’s
operations, often via a tendering process.[7]
The Commonwealth Procurement Rules (CPRs)
are the linchpin of the procurement framework and set out the rules for
procuring goods and services for non-corporate Commonwealth entities (such as
departments) and prescribed corporate Commonwealth entities listed in section
30 of the Public
Governance, Performance and Accountability Rule 2014 (PGPA Rule). These
entities are referred to in the CPRs as relevant entities. The CPRs incorporate relevant obligations from Australia's free trade
agreements as well as reflecting Australian policy on those rules. The CPRs are
in the form of a legislative instrument which is not subject to disallowance
motions of either house.[8]
The current CPRs were issued under section 105B of the PGPA Act and came into effect on 1 January 2018. Chapter 9 of the CPRs
provides that Australian Government procurement is conducted by one of three
methods—open tender, prequalified tender or limited tender. The CPRs require
officials to maintain appropriate documentation for each procurement
commensurate with the scale, scope and risk of the procurement. That
documentation is required to provide accurate and concise information on the
requirements for the procurement, the process that was followed, how value for
money was considered and achieved, relevant decisions that were made and the
bases for those decisions.
Current legal
remedies for tenderers
Currently, suppliers can make complaints to the procuring
entity, the Procurement Coordinator within the Department of Finance, the
Commonwealth Ombudsman, and the Federal Court.[9] The new arrangement will
enable complaints to be made to the Federal Circuit Court (FCC).
Federal Court—Judicial review of procurement decisions
A breach of the CPRs does not on its own give rise to a
‘private’ right of action under which the tenderer could seek damages. A
tenderer may challenge the tender process under administrative law, seeking
judicial review of a procurement decision, although procurement decisions may
also be challenged on common law administrative law principles.
The Administrative Decisions (Judicial Review) Act 1977
(Cth) (the ADJR Act) sets out a framework for judicial review by the
Federal Court of administrative decisions made under Commonwealth legislation. In simple terms, judicial review operates as a practical mechanism for
resolving disputes between citizens and government by allowing ‘persons
aggrieved’ by a decision (in this case a procurement decision) made by a
government official, to have that decision scrutinised by an independent
reviewer. However for an application to succeed under the ADJR Act,
the tenderer must firstly show that the procurement decision was a decision of
an administrative character made, proposed to be made, or required to be made,
under an enactment (whether or not in the exercise of a discretion).[10]
This requires two things: the empowering Act (in this case, the PGPA Act)
authorises or requires the making of the particular procurement decision,
and the Act must also govern the validity of the contract.
The seminal case on the first limb of the reviewability
test is Griffith University v Tang (2005)
221 CLR 99, in which the High Court clarified and settled earlier confusion
about the proper construction of the phrase ‘under an enactment’ in the ADJR
Act. The ADJR Act defines the term ‘enactment’ in terms which
include Acts of Parliament and extends to instruments such as rules,
regulations or by-laws made under an Act or ordinance. Tendering and
contracting decisions made by a Commonwealth department do not satisfy this
test because in normal case of government procurement, the decision to award
the contract cannot be said to have been made 'under an enactment'. So
generally neither section 61 (which deals with executive power[11])
of Commonwealth Constitution or PGPA Act and its regulations will
apply. The accepted view is that contracts made by Commonwealth departments are
made under general executive power rather than legislative power.[12]
However, in some circumstances, there will be a statutory
basis for the particular tendering or contracting action so that it can be said
that the action concerned was taken under an enactment. This may be the case
where the action is taken by a statutory authority. Unlike Departments,
statutory authorities are creations of statute and they draw all their powers
from statute. However, the problem still exists that while the empowering
statute authorises or requires the making or a particular procurement decision,
it is typically the case that the validity and effect of the contract is
actually governed by the ordinary laws of contract, thus the fact that the
legislation empowers the relevant entity to enter into contracts, is unlikely
to be sufficient.
In short, the current laws provide limited
recourse for aggrieved tenderers and would not satisfy Australia’s obligations
under the WTO’s GPA or TPP-11.
While procurement has been an evolving area, the changes
proposed in this Bill are significant as they provide a statutory basis for
suppliers to challenge a tender decision for non-compliance with the relevant
CPRs.[13]
However, introducing a statutory mechanism for suppliers to challenge government
tenders for breach of procurement rules is not novel. For example, in the USA,
the Government Accountability Office which was established to provide an
adjudicative process for the ‘objective, independent, and impartial forum for the
resolution of [bid] disputes concerning the awards of federal contracts’, first
published a bid protest decision that a solicitation was unlawful in 1926.[14]
Basis for
proposed amendments
The proposed changes have arisen from three main sources:[15]
2014 Senate
Committee report into Commonwealth Procurement Procedures
The Bill has been drafted partly in response to the 2014
recommendation by the Senate Finance and Public Administration Committee
arising out of its inquiry into Commonwealth
Procurement Procedures. Recommendation
11 of that inquiry proposed that ‘following consultation with stakeholders, the
Department of Finance establish an independent and effective complaints
mechanism for procurement processes.’[16]
The recommendation was initially rejected by the Coalition Government. In the
Government Senators’ minority report, it was stated that in view of the avenues
and opportunities available to suppliers to lodge complaints, and the low
number of complaints received in relation to procurement processes, there did
not appear to be sufficient evidence to make the case for ‘the urgent need for
a new complaints mechanism to be developed.’[17]
Government Senators therefore did not support recommendation 11.[18]
On 30 April 2015, the Government tabled its response to
the report and recommendations made by the Senate Committee. The Government
stated that it did not support recommendation 11 and that there was an
‘existing framework for suppliers to raise complaints regarding procurement processes.’[19]
Since then, the Government has changed its position.
International
obligations from the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (TPP-11) and WTO Agreement on Government Procurement
(GPA)
TPP-11
The Bill
also aims to make Australia compliant with our international obligations under Article
15.19 of the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (TPP-11) which, once it enters into force,
will require Australia to provide an impartial administrative or judicial
authority (review authority) that is independent of its procuring entities to
review, in a non-discriminatory, timely, transparent and effective manner, a
challenge or complaint by a supplier that there has been a breach of the CPRs
arising in the context of a covered procurement, in which the supplier has, or
had, an interest. There is also a requirement for the procedural rules for all
complaints to be in writing and made generally available.
GPA
The Bill would also place Australia in a better position
for likely accession to the World Trade Organisation’s Agreement
on Government Procurement (GPA), which has as one of its requirements a
transparent dispute review process.[20]
The WTO’s GPA is a plurilateral deal among 19 parties
which covers ‘47 WTO members (counting the European Union and its 28 member
states, all of which are covered by the Agreement, as one party)’.[21]
The basic aim of the GPA ‘is to mutually open government procurement markets
among its parties’.[22]
Stated in practical terms, becoming party to the GPA will mean that Australian
suppliers will have the opportunity to access the government procurement
markets of all member states, which include the 28 members of the European
Union and the USA.[23]
In turn, overseas suppliers will be able to sell goods and services generally to
all levels of Australian government on the same basis as Australian suppliers.
The GPA commits parties to open, fair, transparent and non-discriminatory
conditions of competition in awarding public procurement contracts, thus treating
bids by suppliers from GPA parties and local providers on an equal footing and
requiring an independent transparent dispute review process.[24]
Negotiations for the GPA commenced in 1981 and the
original version of the GPA entered into force in 1996; it has since been
expanded and renegotiated with the most recent revision entering into force in
2014. For years Australian Governments did not pursue becoming a party to the
GPA. In November 2014 Australia announced a change to its position, following
the revisions to the GPA in April 2014, which were considered to bring its
content and terms into closer alignment ‘with the principles underlying
Australia’s Government procurement regime and making GPA accession more
beneficial’.[25]
The substantive changes of interest to Australia included expanding the
objectives of the Agreement to place an emphasis on value for money and
encouraging greater accountability. The revisions also extended the coverage to
include additional government entities, along with additional goods and
services, while adding new provisions with a focus on anti-corruption. A
general exception to the non-discrimination principle was inserted for
circumstances where it is deemed ‘necessary to protect human, animal or plant
life or health’, as well as international aid projects. It also provided for
governments to be able to apply technical specifications for environmental
protection. Changes to Australia’s procurement practices overtime have also put
it in a position where it is already mostly compliant.[26]
Timeline of Australia’s GPA
accession
2015: Australia launched
negotiations to accede to the GPA.
2015: Australia submitted its
first offer of accession to the WTO Committee on GPA.
2017: After feedback and
questions, Australia presented its revised offer to the WTO Committee on GPA.
2018: Following further
feedback and questions, Australia presented its final offer to the WTO
Committee on GPA, with the offer discussed during the 12-14 March meeting of
the GPA Committee.
June 2018: Australia receives
notice support for its bid join the World Trade Organization Agreement on
Government Procurement (GPA).[27] |
Committee consideration
Senate
Finance and Public Administration Committee
The Bill was referred to the Senate Finance and Public
Administration Committee for inquiry in June 2017. Details can be found at the inquiry
homepage. The Committee tabled its report on 4 August 2017, concluding
that the Bill should be passed in its current form as a necessary next step for
Australia to meet its expected international obligations.[28]
In particular, the Committee noted there is a lack of an independent, timely,
effective complaints process for government procurement.[29]
Labor Senators issued Additional Comments, raising concern
about prematurely passing such a Bill before negotiations and details for
accession to the GPA are finalised. Postponing the passage of this Bill would
provide the Parliament with the appropriate and necessary time to properly
consider the GPA in full. The Labor Senators concluded by stating the ALP’s
commitment to ‘improving Australia’s access to international markets in
Australia's national interest.’[30]
The Greens Senators also issued a Dissenting Report in
which they stated that they considered the legislation to be unnecessary as the
Government has not yet acceded to the GPA. However, if the Government decided
to pursue the passage of this Bill prior to negotiations for accession to the
GPA being concluded, the Greens recommended that the ten day limit on bringing
proceedings for an injunction be extended so as to avoid the courts being
potentially inundated with applications for a waiver of this time limit.
Finally the Greens emphasised that they supported a procurement regime that is
transparent, easily comprehensible and advances the goal of expanding jobs in
Australia.[31]
The concerns raised in the stakeholder submissions are
discussed below under the relevant key issues.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
reported on the Bill on 14 June 2017.[32]
The Committee raised two particular concerns to which the Minister provided a
response to the Committees concerns on 19 July 2017, which the Committee
responded to on 9 August 2017.[33]
Broad Instrument-making power
The Committee raised particular concern about the broad
instrument-making power conferred on the Minister for Finance to determine, by
way of legislative instrument, additional procurements which may be exempted
from the definition of a ‘covered procurement’, without making transparent the
criteria which may inform such a determination.[34]
The Committee sought advice from the Minister as to the necessity of this broad
power and also, if it is:
... appropriate for the bill to be amended to ensure that
additional procurements could only be exempted from the definition if there are
such provisions in Australia's free trade agreements (if this is the intention
of the provision).[35]
Minister’s response
The Minister stated that Australia is party to a large
number of free trade agreements (FTAs), where the specific obligations under
those FTAs may vary. The CPRs are intended to embody Australia’s obligations
under those FTAs as well as reflect Australian policy. Because ‘government
functions and entities can change from time to time’, such a provision provides
the flexibility to adjust to such change, and to do so consistent with our FTA
obligations. The Minister stated that this power is not expected to be used
often.[36]
Committee response to the Minister
The Committee noted the Minister’s reasoning and requested:
... the key information provided by the Minister be included in
the explanatory memorandum, noting the importance of these documents as a point
of access to understanding the law and, if needed, as extrinsic material to
assist with interpretation.[37]
Because the instrument will be subject to disallowance,
the Committee made no further comment.[38]
Review rights
The Committee noted clause 23 of the Bill provides
that a contravention of the CPRs does not affect the validity of a contract,
regardless of whether the contravention occurred before, at or after the
commencement of the Act. The Committee raised concern and sought clarification
as to whether the provision is intended to extinguish rights that an affected
person might otherwise have to challenge the validity of a contract in
circumstances where the CPRs are contravened. The uncertainty arises because clause
14 of the Bill provides that the new powers conferred on the courts are in
addition to, and not instead of, any other powers. Thus the Committee suggested
the interaction between clause 14 and clause 23 appears to be in
need of clarification.[39]
Minister’s response
The Minister responded that the ‘intention of the clause
is to provide certainty to both suppliers and the officials of relevant
entities on the validity of contracts awarded following a procurement process’
without being concerned that the contract would be rendered invalid. The
Minister also stated that he had been advised a breach of the CPRs would be
unlikely to affect the validity of a contract.[40]
Committee response to the Minister
The Committee stated that it did not consider that this
information responds directly and relevantly to the specific concern raised by
the Committee, namely:
... whether clause 23 (which states that it is immaterial
whether the contravention occurred before the commencement of the Act) could
operate to extinguish existing legal rights relating to impugning the validity
of a contract by way of proceedings brought under this legislation.[41]
The Committee reiterated its concern that:
... it would appear that the bill could extinguish existing
legal rights, notwithstanding that it is considered 'unlikely' that the courts
would view breach of the CPRs as affecting the validity of a contract.[42]
Policy position of non-government parties/independent
As discussed in the Additional Comments to the Senate
Committee’s report, the ALP and the Greens do not support the passage of the
Bill at this time, stating that it is more appropriate for the Bill to be
considered when negotiations for the GPA are concluded.[43]
Position of major interest groups
The views of major interest groups are set out in their
submissions and evidence provided to the Senate Finance and Public
Administration Committee’s inquiry into the Bill, which received 9 submissions.
Those views are summarised below under thematic headings in the Key Issues
and Provisions part of this Digest.
Financial implications
The Explanatory Memorandum states that the Government is
committing $2.9 million over four years for the Federal Circuit Court, with
concurrent jurisdiction with the Federal Court to hear government procurement
complaints. Funding is expected to be provided on an ongoing basis as efforts
at cost recovery (through court filing fees) are not anticipated to be
sufficient.[44]
Comment
In its submission to the Senate inquiry into the Bill, the
Department of Defence has raised the concern of the potential for an increase
in individual department and thus budgetary costs from both delays in the
procurement process due to a suspension of the process, and the impact of one
successful claim for compensation inspiring additional claims for that
particular breach event.[45]
Statement of Compatibility
with Human Rights
A Statement of Compatibility with Human Rights was not
provided for this Bill in the accompanying Explanatory Memorandum.
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[46]
Key issues and provisions
Part 1—Preliminary
Key definitions
Clauses 4 and 5 provide definitions of key
terms used throughout the Bill. These include:
A procurement is a covered procurement, and therefore
subject to the review scheme established by the Bill, if:
- the
rules in Divisions 1 and 2 of the CPRs apply to the procurement and
- the
procurement is not included in a class of procurements specified in a
determination by the Minister for Finance.
Under the CPRs, Division 1 and 2 rules only apply when the
value of the procurement is above a certain threshold. For non-corporate
Commonwealth entities, this is $80,000 and for prescribed corporate
Commonwealth entities the threshold is $400,000. For all relevant entities, the
procurement threshold for construction services is $7.5 million. This means the
Bill’s measures will not apply to procurements where the value is below these
thresholds.
The Bill will also not apply to procurements which are
exempted from all, or part, of the Division 1 and 2 rules. This includes, for
example, procurements involving the leasing of land or buildings; the
procurement of goods or services from another government entity; procurements
funded by grants from non-Commonwealth entities; or procurements where an
official applies measures determined by their accountable authority to be necessary
to maintain or restore international peace and security or to protect human
health, essential security interests or national treasures of artistic,
historic or archaeological value.
Comment
This is a very broad definition of ‘procurement’ and seems
to include all stages of a procurement, including the ongoing operation of a
contract. In this case it may be possible to suspend an ongoing operational
contract if no public interest certificate is in force.[47]
The Explanatory Memorandum offers no guidance as to what happens when there are
parallel procurements involving many contracts. Is it the case that the
suspension of one affects or is intended to affect other related contracts?
Relevant
Commonwealth entity means:
(a) a non-corporate Commonwealth
entity; or
(b) a corporate Commonwealth entity
prescribed by rules made for the purposes of paragraph 105B(1)(b) of the Public
Governance, Performance and Accountability Act 2013.[48]
Relevant
Commonwealth Procurement Rules means:
(a)
a provision of Division 1 of the Commonwealth Procurement Rules that is
declared by those rules to be a relevant CPR for the purposes of this
paragraph; or
(b)
all of Division 2 of the Commonwealth Procurement Rules.
Comment
Division 2 rules are rather straightforward,
relating to conditions for limited tender,[49]
time limits for lodging tender submissions and so forth. It would be rather
easy to establish as to whether an entity has complied with the requirements
under Division 2 as this would be evident from the request documentation
itself. In contrast, the provisions in Division 1 are arguably more imprecise
and relate to probity-type issues such as the ethical behaviour requirement[50] which may be more
difficult to ascertain. There has not been any indication as to which
provisions the Government intends to include from Division 1 of the CPRs.
The WTO GPA makes it a requirement that the signatories to
the Agreement provide a list of
sub-central government entities that are going to be bound by the GPA.[51]
This means state governments and possibly statutory corporations. However clause
6 of the Bill states that the legislation binds the Crown in each of its
capacities. This does not seem of relevance in terms of binding the states
because the target of the legislation is breaches of the CPRs. In this respect
it is unclear as to whether this drafting will satisfy the WTO requirements or
whether there will be a side letter drawn up.
Part 4—Complaints, investigation and suspension of
procurement process
Legal standing:
who may make a complaint?
A ‘supplier’ can make a written complaint to the
accountable authority if the supplier has reason to believe (and this is a subjective
formulation) that the relevant commonwealth entity has engaged or is proposing
to engage in conduct in breach of the relevant CPRs (so far as those rules
related to a covered procurement), and the ‘interests of the supplier are
affected’ by that conduct (clause 18(1)). The Bill defines a supplier as a person, partnership or
other group who supplies, or could supply, goods or services.[52]
Perhaps problematically, when a supplier’s interests will
be affected by the conduct (that is, a breach of the relevant CPRs) is left
undefined in the Bill, and the Explanatory Memorandum also does not provide any
guidance.[53]
This may therefore pose problems in using the legislation in terms of standing
and causation. For example, the relevant entity may be able to argue that even
though they have not complied with the CPRs, the applicant’s interests are not
affected because they would not have won the tender in any event.
Nonetheless the potential scope of who can complain is
broad and could include for example, an activist group who object to some
aspect of the procurement, as long as they do or could provide goods or
services and can show that their interests are affected by the breach.
Comment
Professor Nick Seddon noted that the drafting in the GPA
and AUSFTA is made in the context of a ‘procurement in which the supplier has,
or has had, an interest’, whereas the drafting in the Bill refers to a supplier
‘whose interests are affected’ by the conduct.[54]
This therefore makes the test for standing (who may make a complaint) stricter
by raising the problem of causation.[55]
In its report the Senate Finance and Public Administration
Committee responded by saying that they considered the test for standing to be
appropriate as it avoids spurious applications by confining applications for
review to those suppliers who ‘have a direct and meaningful interest in a procurement
process’ without requiring them to show that they would have been awarded the
contract. Demonstration of a breach of the CPRs is sufficient.[56]
The Australian Small Business and Family Enterprise
Ombudsman (ASBFEO) and the Defence Teaming Centre (DTC) both expressed the view
that the scope of the term ‘supplier’ needed clarification. In particular,
clarification was sought as to whether subcontractor suppliers may be able to
apply for an injunction against a prime contractor for a breach of CPRs, with
the DTC arguing that this should be permitted.[57]
In answers to questions taken on notice, the Department of
Finance clarified that a complaint of a breach of the relevant CPRs by a
sub-contractor needs to be made to the responsible authority.[58]
It also confirmed that 'the supplier does not need to demonstrate that they
would have been awarded the contract had the breach not occurred'.[59]
They only need to demonstrate that their interests are affected by the alleged
breach, and this is intended to apply to both contractors and subcontractors.[60]
Meaningful access to justice for small
and medium size business enterprises
It is notable that the Bill will provide regional
suppliers and small and medium enterprises (SMEs) with easier, timely access to
raise complaints about breaches of CPRs and seek remedies without the need to
attend major cities. This is because the FCC is the only court at the federal
level which has a continuous presence outside major capital cities. However,
access to justice is not simply about geographical proximity. Six of the
submissions received by the Senate Committee Inquiry into the Bill raised
concern about issues of cost associated with a formal judicial process in terms
of preparation of relevant documentation and the necessity for sufficient legal
resources. The proposed arrangement may therefore discourage small and medium
enterprises from applying for tenders or challenging them. The net result may
be to undermine competition by having a process which favours large suppliers.[61]
In order to address the cost-access challenge for small
and medium businesses, a few of the submissions proposed the addition of other
less costly steps in the process. Submitters contended that SME suppliers
should have access to an ombudsman,[62]
or an alternative dispute resolution mechanism as a step in the process,[63]
or an industry advocate.[64]
Alternatively, jurisdiction should vest with a lower court or tribunal such as
the Administrative Appeals Tribunal rather than the FCC.[65]
In answers to questions on notice, the Department of
Finance argued that the FCC is the most appropriate forum for handling
complaints in a timely manner and highlighted the fact that it is the only
court with an ongoing presence outside major cities, thus providing regional
areas with greater geographical access. It is stated that the cost of the FCC
is around only half the cost of an option like the FCA.[66]
Investigation
by accountable authority
If a complaint is made, then the accountable authority is
under an obligation to investigate the complaint and must prepare a report into
the investigation (subclause 19(1)). This is not dissimilar to the
current complaints handling procedures.[67]
Discontinuation
of investigation
Subclause 19(2) provides that the accountable
authority may discontinue the investigation if one of the following
circumstances applies:
- the
supplier withdraws the complaint
- the
supplier informs the authority that the complaint has been resolved or
- the
Court makes either of the following findings:
- the
conduct was in contravention of the CPRs (so far as those rules related to a
covered procurement) or
- the
conduct was not in contravention of the CPRs (so far as those rules related to
a covered procurement).
Suspension
of procurement
As part of the complaints procedure, there requirement
that the accountable authority ‘suspend’ the procurement process on receipt of
the complaint (if there is no public interest certificate in force)[68]
until the earliest of the following times:
- the
time at which the supplier informs the accountable authority that they consider
the complaint to be resolved[69]
- the
time at which the supplier withdraws the complaint[70]
- the
time at which the accountable authority issues a public interest certificate
in relation to the procurement[71]
or
- the
time at which the Court makes either of the following findings:
-
the
conduct was in contravention of the CPRs (so far as those rules related to a
covered procurement)[72]
or
- the
conduct was not in contravention of the CPRs (so far as those rules related to
a covered procurement).[73]
Comment
Neither the Bill nor the Explanatory Memorandum articulate
what is meant by ‘suspending’ the procurement process. It would seem to mean
that a contract cannot be awarded during a suspension of the procurement
process, but it is unclear as to whether it means that other bids cannot be
considered and that the whole process grinds to a halt.
Remedies
The Bill provides for two types of remedies, a statutory
injunction or compensation. A claim for compensation can be made in conjunction
with an application for an injunction or each application can be made
separately.
Part 2—Injunctions
Clause 9 provides that the Court may grant an
injunction in relation to a contravention of the relevant CPRs, so far as those
rules relate to a covered procurement. Two types of injunctions are available:
a restraining injunction or a performance injunction. The Explanatory
Memorandum states that injunctions provide the courts with ‘a corrective
measure to ensure that the procuring entity complies with the relevant CPRs’.[74]
Subclause 9(1) provides that a restraining
injunction may be granted in circumstances where there has been, or there
is proposed to be, conduct which will amount to a contravention of the CPRs (so
far as those rules related to a covered procurement). In these circumstances
the court may, on the application of the supplier ‘whose interests are affected
by the conduct’, grant an injunction:
- restraining
the entity or official from engaging in the conduct and
- if,
in the Court’s opinion it is desirable to do so—requiring the entity or
official to do something.
Subclause 9(2) provides that a performance
injunction may be granted in circumstances where a relevant Commonwealth
entity or an official of that entity has refused or failed, or is refusing or
failing, or is proposing to refuse or failed to do an act or thing which will
amount to a contravention of the CPRs (so far as those rules related to a
covered procurement). In these circumstances the court may, on the application
of the supplier ‘whose interests are affected by the conduct’, grant an
injunction requiring the entity or official to do that act or thing.
Availability
of alternative remedy of compensation
Clause 10 basically provides a court with the
discretion to refuse to grant an injunction where a public interest certificate
has been issued, and the court considers that the granting of compensation
would be a more appropriate remedy given the circumstances. According to the
Explanatory Memorandum, this is intended to provide for ‘the balance of
interests being in favour of compensatory remedies rather than disruption to
the procurement process.’[75]
Where:
- an
application has been made to the court for an injunction in relation to a
contravention of the relevant CPRs (paragraph 10(1)(a)) and
- the
supplier/tenderer has made an application to the court for compensation (paragraph
10(1)(b)) and
- a
public interest certificate has been issued in relation to the procurement (paragraph
10(1)(c)) and
- the
procurement concerned has not reached the stage where a contract has been
entered into with the supplier (paragraph 10(1)(d))
then:
paragraph 10(1)(e) requires the court to consider whether
the granting of an injunction would result in significant delay/disruption to
the procurement, and if the granting of compensation would thus be a more
appropriate remedy. If so, then the court may refuse to grant an injunction (paragraphs
10(1)(f)(i) and(ii)).
Subclause 10(2) clarifies that this does
not limit or confine the power of a court to refuse to grant an injunction to
those considerations in subclause 10(1). The grant of an injunction is
therefore discretionary and other possible examples of considerations which the
court may take into account in deciding whether to grant an injunction include
the conduct of the supplier and also the nature and degree of the
contravention.
Procedural
limits on power to grant an injunction
Requirement to first lodge a
complaint with the accountable authority
Clause 11 imposes certain limits on the court’s
power to grant an injunction in relation to a contravention or proposed
contravention of the CPRs.
Paragraphs 11(1)(a) and (b) provide that the
court must not grant an injunction in relation to a contravention or proposed
contravention of the CPRs by a relevant Commonwealth entity or an official of
that entity, unless:
- the
court is satisfied that the applicant for the injunction has made a complaint
under clause 18 to the relevant authority (paragraph 11(1)(c))
and
- if
the court considers that it would have been reasonable for the applicant for
the injunction to have attempted to resolve the complaint, the court is
satisfied that the applicant has made a reasonable attempt to resolve the
complaint (paragraph 11(1)(d)).
Comment
This is consistent with Articles
15.19(2)-(3) of TPP-11 which encourage the supplier and procuring entity to
seek a resolution to the complaint at first instance, and where this fails then
the supplier may seek redress through a review authority which is independent
of the procuring entity that is the subject of the complaint.
10 day limit for Application
The Bill provides that the Court must not grant an
injunction in relation to either a:
- contravention
that has occurred[76]
- contravention
that is occurring[77]
or
- proposed
contravention[78]
by a relevant Commonwealth entity or an official of that
entity, unless the court is satisfied that the application for the injunction
was made within ten days, either of the contravention (or proposed
contravention) occurring or the supplier becoming aware/or reasonably aware of
the contravention (or proposed contravention).
The Court has discretion to allow a longer period for the
application to have been made.[79]
Subclause 11(5) provides that the court must not allow a longer period
of time for the application of an injunction unless the court is satisfied that
the reason for the delay relates to:
- the
applicant’s failure to make the application within the ten day period being due
to the applicant’s reasonable attempt to resolve the complaint (paragraph
11(5)(b)) or
- there
are special circumstances that warrant allowing a longer period to lodge an
complaint and thus injunction (paragraph 11(5)(a)).
Comment
In the case where an attempt at settlement has been made
but no resolution has been reached in ten days and this has caused the delay in
applying for an injunction, the Court would grant an extension of time. In this
case, an extension of time will probably be granted in the majority of cases as
it is unlikely that complaints will be resolved in a ten day period. Indeed, a
number of submissions to the Senate Inquiry into this Bill expressed concern
and dissatisfaction about the adequacy of the ten day time limit for seeking an
application for an injunction, especially in complex procurement processes.[80]
Dr Seddon proposed that ten day time limit should instead
commence from the time it is clear that efforts to resolve a complaint have
failed, or that a complainant be required to submit a complaint within ten days
of the announcement of a contract being awarded.[81]
An alternative suggestion was that if the ten day limit
was to apply to the lodgement of an application by an aggrieved supplier, then
a time limit for responding to a complaint should also be imposed on a
procuring entity.[82]
It seems that the ten day time limit requirement may have
been informed by the norms relating to provisions dealing with procurements set
out in FTAs which require there to be a timely complaints handling process in
place.
Discharge
or variation of an injunction
Clause 12 provides that that the Court may discharge
or vary an injunction granted by it, thus suggesting that this allows for final
and interlocutory injunctions to be granted.
Certain
limits on granting injunctions not to apply
Restraining
injunctions
Paragraphs 13(1)(a) and (b) provide that a
court may grant an injunction restraining a relevant Commonwealth entity or an
official of that entity from engaging in a conduct of a particular kind:
- if
the court is satisfied that the entity or official of the entity has
engaged in conduct of that kind, regardless of whether it appears the entity
intends to engage again, or continue to engage in that conduct (paragraph 13(1)(c))
or
- where
it appears that if an injunction is not granted, it is likely that the entity
or official will engage in conduct of that kind: regardless of whether the
entity has previously engaged in that kind of conduct, and regardless of
whether there is any imminent danger of substantial damage to any person if the
entity or official engages in conduct of that kind (paragraph 13(1)(d)).
Performance
injunctions
Paragraphs 13(2)(a) and (b) provide that a
court may grant an injunction requiring a relevant Commonwealth entity or an
official to do an act or thing:
- if
the court is satisfied that the entity or official has refused or failed
to do that act or thing—whether or not it appears to the court that the entity
or official intends to refuse or fail again, or to continue to refuse or fail,
to do that act or thing (paragraph 13(2)(c)) or
- if
it appears to the court that, if an injunction is not granted, it is likely that
the entity or official has previously refused or failed to do that act or
thing, and regardless of whether there is any imminent danger of substantial
damage to any person if the entity or official refuses or fails to do that act
or thing (paragraph 13(2)(d)).
Comment
Given that action for an injunction may be taken in
respect of the action or failure to act by an official in the relevant entity,
it may not be unreasonable to expect that the relevant part (Appendix E) of the
Legal Services
Directions 2017 would be come into play and that the official would be
provided with support and indemnity.[83]
However, the Explanatory Memorandum does not raise this issue.
Clause 14 provides that the powers conferred on the
courts under Part 2 are in addition to, and not instead of, any other powers of
the court. It is arguable that clause 14 is intended to convey that the
proposed amendments are an adjunct to and do not displace other existing forms
of review, even though those avenues are rather weak.
Part 3—Compensation
The Courts may order payment of compensation to a supplier
whose interests are affected by the contravention of the relevant CPRs (so
far as those rules related to a covered procurement). The power to grant
compensation is limited in scope to reasonable expenditure incurred by the
supplier in preparing for the tender, making a complaint to the relevant
authority, and in making a reasonable attempt to resolve the complaint. Thus
the power to grant compensation notably does not extend to the loss of profit
or opportunity on the part of the supplier.
Clause 16 provides that if a relevant Commonwealth
entity or an official of that entity has contravened, is contravening or is
proposing to contravene the relevant CPRs (so far as those rules related to a
covered procurement), the courts may, on the application of a supplier whose
interests are affected by the contravention or proposed contravention, make
whichever of the following orders is applicable:
- in
the case of a non-corporate Commonwealth entity, an order directing the
Commonwealth to pay the supplier compensation[84]
or
- in
the case of a corporate Commonwealth entity, an order directing the
entity to pay the supplier compensation.[85]
In either case, the compensation amount must not exceed
the sum of the reasonable expenditure incurred by the supplier in connection
with: preparing a tender for the procurement; making a complaint to the
accountable authority of the relevant Commonwealth entity; and making a
reasonable attempt to resolve such a complaint.[86]
The parameters around the ward compensation are consistent
with Article
15.19(4) of TPP-11. The scope of the compensation clause does not
explicitly mention legal costs, but it is arguable that if a tenderer had to
engage a lawyer to assist them, then such costs may be recoverable.
Pre-requisites to apply for compensation
Unlike the ten day time limit for a supplier to make an
application for an injunction, there is no mention in the Bill or Explanatory
Memorandum of a ten day time limit applicable to lodging a claim for
compensation. There is also no mention of a requirement that the applicant must
have tried to settle or resolve the issue with the relevant Commonwealth
entity.
Part 5—Miscellaneous
An
exception to the suspension requirement—Public interest certificate
An obligation to suspend the procurement process under
Part 2 while applications for an injunction are being considered, or while
complaints under clause 18 are being investigated, does not apply if a public
interest certificate has been issued by the secretary or other accountable
authority of a relevant Commonwealth entity (subclause 22(1)).[87]
The public interest certificate is an administrative law
overlay that has been introduced into the procurement process as a result of
the changes made by the Bill. It is designed as a counter to balance out the
‘real adverse consequences’ of a suspension of the procurement process which
can occur when a complaint is made and is being investigated, or when an
application for an injunction is made. The Explanatory Memorandum states that a
public interest certificate is designed to allow for particular circumstances
where a procurement process should be allowed to continue despite the Bill’s
proposed amendments, which would otherwise require the process to be suspended,
because ‘it is not in the public interest for that procurement to be delayed.’[88]
Thus, a complaint is made and a public interest certificate can be issued at
that point to allow the procurement process to continue, while the application
or complaint is being considered.[89]
The Explanatory Memorandum does not provide further
discussion or elaboration on the test for issuing a public interest
certificate. However it is stated that ‘procuring entities will receive
guidance on the circumstances where a public interest certificate can be issued.’[90]
Comment
The Department of Defence suggested that consideration be
given to allowing certain special categories of procurements with a particular
public interest at stake, to issue blanket public interest certificates, or for
the procurement to be suspended.[91]
What might ‘in the public interest
to be suspended’ mean?
Generally, when looking at a public interest, the courts
have said that it is a matter of discretionary value judgement on the part of
the decision-maker and that the parameters of ‘public interest’ is really
determined by the confines of the Act in which that public interest test is
situated.[92]
Some of the considerations may involve consideration of what
is the nature and purpose of the procurement. For example:
- does
the procurement involve a national security issue?
- is
there some particular urgency in relation to what is being procured?
- what
is the nature of the complaint being made and how serious is the complaint?
- is
the complaint broad in its effect, extending to many suppliers or is it limited
to one particular supplier? and
- generally,
the purpose for which the Bill is being introduced, .i.e., to respond to
international obligations.
The abovementioned factors are possible considerations in
relation to whether a public interest certificate is issued. However because it
is a discretionary value judgement, much will turn on the particular
circumstances of the case. Each circumstance may therefore give rise to its own
considerations.
Timing for
issuing a public interest certificate
Although the Bill seems to contemplate the issuance of a
public interest certificate when the particular issue or grievance arises,
consideration may be given to at least in some particular types of procurement
processes (for example, relating to national security or urgent circumstances)
of having the certificate issued at the start of the procurement process.
Scope of
the public interest certificate?
The Bill is silent as to what the scope of the public
interest certificate might be. It is unclear as to whether it is intended to
apply to any complaint or injunction raised in relation to procurement process,
or whether it is to be confined to particular complaints or issues, or can be
made to apply to only a certain complaint.
It is notable that while the issuance of a public interest
certificate is an administrative decision, the Explanatory Memorandum states
that ‘it is not intended that the decision would be subject to a merits review’
in the Administrative Appeals Tribunal.[93]
However, there does not appear to be anything in the Bill excluding the
possibility of judicial review under the Administrative Decisions Judicial
Review Act (ADJR Act), or review under section 39B of the Judiciary
Act and section 75(v) of the Constitution.[94]
As the issuance of a public interest certificate appears to be reviewable under
the ADJR Act, section 13 allows an aggrieved person of a decision to
seek a statement of reasons.
In the case of review under the ADJR Act, the court
may form their own views about relevant considerations in issuing a public
interest certificate and also procedural fairness. It is notable that ‘public
interest’ is a flexible concept that can deal with a range of different
situations and some circumstances where it is an urgency about the procurement
process continuing, there may be no requirement for procedural fairness
continuing, but at least some consideration may need to be given as to whether
a person who is affected by the decision, should have an opportunity to comment
on whether a PIC should be issued.
Thus although a public interest certificate is intended to
provide a counter to the complaint process, it seems that there may be a number
of issues to work through.
Contravention of CPRs does not
affect validity of a contract
Clause 23 provides that a breach of the CPRs does
not affect the validity of a contract, regardless of whether the contravention
occurred before or after the commencement of this Bill.
Comment
As mentioned above, the operation of this clause attracted
the attention of the Scrutiny of Bills Committee. This clause may be
interpreted as meaning that an injunction cannot be granted once a contract has
been awarded. If this is the case, then this provision may be in breach of
Article 15.11(4) of the Australia-US
Free Trade Agreement which states that the setting aside of an awarded
contract is one of the remedies in the Agreement. However, this would be
consistent with the WTO GPA which does not include such a requirement.
This is arguably not an insignificant point as at least in
some cases, the tenderer will not be in a position to be aware that there has
been a breach of the CPRs until after the contract has been awarded and there
is a debriefing session in which this may come to light. An applicant in that
situation would be able to apply for compensation. However, they may still face
the problem of standing and causation mentioned earlier if the matter went to
court.
No retrospective application
Clause 25 provides that the Bill does not apply to
contraventions of the CPRs which occur before the Act commences. However, it is
arguable that there is the potential for it to apply to a procurement process
which is midstream for breaches of the relevant CPRs after the Bill does come
into effect.
[1]. Appeal
mechanisms currently in place are adequate to satisfy Australia's obligations
under existing bilateral Free Trade Agreements. However, they are insufficient
to satisfy the requirements of particular future international trade agreements
such as the World
Trade Organisation Agreement on Government Procurement (GPA), or the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (TPP-11). In challenging
procurement decisions, the GPA emphasises that party states are obliged to
provide for a review and appeal mechanism to be available before ‘an impartial
administrative or judicial authority that is independent of the [relevant]
procuring entity.’ The TPP-11 has similar requirements in relation to a transparent
timely dispute review process. The proposed changes enable Australia to satisfy
its obligations under the TPP-11 and as a proposed party to the GPA.
[2]. The
CPRs are the linchpin of the Commonwealth procurement framework and set out the
rules for procuring goods and services for non-corporate Commonwealth entities
(government departments) and prescribed corporate Commonwealth entities listed
in section 30 of the Public
Governance, Performance and Accountability Rule 2014 (PGPA Rule). These
entities are referred to in the CPRs as ‘relevant entities’.
[3]. The
'relevant CPRs' or ‘covered procurements’ are Division 2 of the CPRs (i.e., procurements over specified monetary thresholds) and a
provision of Division 1 that is declared by the CPRs to be relevant. The proposed amendments do not apply to procurements that are exempt
from Division 2 of the CPRs. It is notable that while this Bill makes reference
to ‘covered procurements’ this term was deleted in the 2012 CPRs which were
released on 10 April 2012 and came into effect on
1 July 2012, replacing the Commonwealth Procurement Guidelines. The current
CPRs came into effect on 1 January 2018.
[4]. An
accountable authority of an entity is the person or body
responsible for managing the entity. The accountable authority of a department
of State and a parliamentary department will be the secretary. The accountable
authorities of non-corporate Commonwealth entities that are listed entities
will be prescribed by the rules: Public Governance,
Performance and Accountability Act 2013 (PGPA Act), subsection
12(2).
[5]. PGPA
Act, sections 15 to 19.
[6]. Ibid.,
section 21.
[7]. Such
goods, services or works that are procured may include for example, office
equipment, uniforms, vehicles, furniture and facilities, technical equipment
and support, telecommunications, contingent worker recruitment, testing and
training, and travel-related services.
[8]. Under
subsection 105B(2) of the PGPA Act, the Rules are not subject to section
42 (disallowance) of the Legislative Instruments Act 2003.
[9]. It
is also possible to make a claim on the basis of breach of contract to the
extent that it can be argued the tender documents constitute a ‘process
contract’. However the Request for Tender documentation routinely excludes this
possibility by inserting a clause purporting to exclude the possibility of a
‘process contract’ as there is no offer and no intention to create legally
binding relations. As long as such clauses are drafted properly, they have
legal force. Another possible basis is misleading or deceptive conduct during
the procurement process. The relevant legislation in this regard would be the Competition
and Consumer Act 2010 (Cth). However section 2A of this legislation
provides that it only binds the Crown in so far as it carries on a business.
The case law since Hughes Aircraft Systems International v Airservices
Australia
[1997]
FCA 558
has held that procurement processes by government do not amount
to carrying on a business but are part of the ordinary government business.
There is also the possibility of raising negligent misrepresentation and
estoppel arguments, but these would be very difficult arguments to run.
[10]. Administrative
Decisions (Judicial Review) Act 1977 (Cth), sections 3, 5.
[11]. Section 61 of the Commonwealth Constitution
provides that:
The
executive power of the Commonwealth is vested in the Queen and is exercisable
by the Governor-General as the Queen's representative, and extends to the
execution and maintenance of this Constitution, and of the laws of the Commonwealth.
[12]. See
Dardak v Minister for Regional
Services, Territories and Local Government (2002) 65 ALD 451 at 461.
[13]. The
evolution of law in the procurement space is not confined to the changes
proposed by this Bill. A couple of other notable changes to legislation and
processes that will have an impact on the development of procurement are: the Treasury
Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015
and the increasing use being made of Market Led Proposals (MLPs) for projects. A
MLP is an unsolicited proposal or initiative from the private sector seeking an
exclusive commercial arrangement with government to deliver a service or
infrastructure to meet a community need. This is seen as an alternative to
traditional government procurement. The Unfair Contract Terms legislation has
been extended and now applies to a small category of business contracts. Unfair
contract terms provisions apply to contracts with a Commonwealth, state or
territory body to the extent that it is carrying on a business. A government
body that engages in day to day procurement activities, but is not carrying on
a business, is not subject to these laws.
[14]. Office
of General Counsel, Bid
Protests at GAO: A Descriptive Guide, United States Government
Accountability Office, ninth edn, 2009, p. 3.
[15]. M
McCormack, ‘Second
reading speech: Government Procurement (Judicial Review) Bill 2017’, House
of Representatives, Debates, 25 May 2017, p. 5136.
[16]. Senate
Finance and Public Administration References Committee, Commonwealth
procurement procedures, The Senate, Canberra, July 2014, p. 53.
[17]. Ibid.,
p. 87.
[18]. Ibid.
[19]. Australian
Government response to the Senate Finance and Public Administration
References Committee report: Commonwealth procurement procedures, April
2015, p. 8.
[20]. Implementation
of the GPA will also require Australia to make a number of other adjustments to
current procurement practices at the time of implementation, including having
in place appropriate review procedures, making changes to procedures for
pre-qualification and limited tendering.
[21]. World
Trade Organisation (WTO), ‘Agreement of
Government Procurement: Parties, observers and accessions’, WTO website.
[22]. WTO,
‘Agreement
on Government Procurement’, WTO website.
[23]. Australia
already has an FTA with the USA which enables Australia suppliers to access the
US Government procurement market. See chapter 15 of Australia-United
States Free Trade Agreement.
[24]. WTO,
‘Agreement
on Government Procurement’, op. cit.
[25]. Department
of Foreign Affairs and Trade (DFAT), ‘Agreement
on Government Procurement’, DFAT website.
[26]. Ibid.
[27]. S
Ciobo (Minister for Trade) WTO Government Procurement Agreement accession, media release, 28 June 2018.
[28]. Senate
Finance and Public Administration Committee, Government
Procurement (Judicial Review) Bill 2017 [provisions], The Senate,
Canberra, August 2017, p. 13.
[29]. Ibid.
[30]. Australian
Labor Party Senators, Additional Comments, Senate Finance and Public
Administration Committee, Government
Procurement (Judicial Review) Bill 2017 [provisions], The Senate,
Canberra, August 2017, p. 15.
[31]. Australian
Greens, Dissenting Report, Senate Finance and Public Administration Committee, Government
Procurement (Judicial Review) Bill 2017 [provisions], The Senate,
Canberra, August 2017, p. 17.
[32]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2017, The Senate, 14 June 2017, pp. 27–8.
[33]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, The Senate, 9 August 2017, p. 70.
[34]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2017, op. cit., pp. 27–8.
[35]. Ibid.
[36]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, op. cit., p. 70.
[37]. Ibid.,
p. 71.
[38]. Ibid.
[39]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2017, op. cit., p. 28.
[40]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, op. cit., pp. 71–72.
[41]. Ibid.,
p. 72.
[42]. Ibid.
[43]. Senate
Finance and Public Administration Committee, Government
Procurement (Judicial Review) Bill 2017 [provisions], op. cit.,
pp. 15 and 17 respectively.
[44]. Explanatory
Memorandum, Government Procurement (Judicial Review) Bill 2017, p. 1.
[45]. Department
of Defence, Submission to Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 6], July 2017, p. 2.
[46]. Parliamentary
Joint Committee on Human Rights, Human
Rights Scrutiny Report, 5, 2017, Canberra, 14 June 2017, p. 49.
[47]. ‘Public
interest certificates’ are created by subclause 22(1)—see discussion below.
[48]. The
list of those entities can be found at Rule 30 (Procurement by corporate
Commonwealth entities) in the PGPA Rules 2014.
[49]. A
limited tender involves an agency approaching one or more potential suppliers
to make submissions where the process does not meet the rules for open tender
or prequalified tender. Chapter 9 of the CPRs provides that Australian
Government procurement is conducted by one of three methods – open tender,
prequalified tender or limited tender.
[50]. CPR,
Division 1, rules
6.6 -6.8, Department of Finance website.
[51]. World
Trade Organization (WTO), WTO GPA,
Article 1(1) provides that the Agreement only covers procurement by entities
covered by the Agreement, as specified in Annexes 1-3 of Appendix I, relating
respectively to central government entities, sub-central government entities...
[52]. Clause
4.
[53]. Parts
2 and 3 of the Bill make use of the phrase a supplier ‘whose interests are
affected’ and in those parts there is also no corresponding guidance as to what
this phrase may mean.
[54]. Professor
Nick Seddon is an Adjunct Professor at the ANU College of Law and a leading
authority on government contracts: federal state and local.
[55]. Professor
N Seddon, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, op. cit., p. 2.
[56]. Senate
Finance and Public Administration Committee, Government
Procurement (Judicial Review) Bill 2017 [provisions], op. cit., p.
14.
[57]. Australian
Small Business and Family Enterprise Ombudsman (ASBFEO), Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 3], 7 July 2017, p. 2; Defence
Teaming Centre, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017 , [submission no. 8], 12 July 2017, p. 2.
[58]. Answers
to questions on notice taken on 18 July 2017 from the Department of Finance,
received 2 August 2017, p. 3.
[59]. Ibid.,
p. 2.
[60]. Ibid.,
p. 3.
[61]. See
in particular: Australian Chamber of Commerce and Industry, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017 , [submission no. 4],
7 July 2017, p. 1; Australian Fair Trade and Investment Network Ltd, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 7],
p. 3, n.d; Australian Council of Trade Unions, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 9], 14 July 2017, p. 3; Australian
Manufacturing Workers' Union, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 5], 7 July 2017, p. 2; ASBFEO, op cit.,
p. 3; Chamber of Commerce and Industry Queensland, Submission to the Senate Standing Committee on Finance and
Public Administration, Inquiry into the Government Procurement (Judicial
Review) Bill 2017, [submission no. 2], July 2017, pp. 2–3.
[62]. Australian
Fair Trade and Investment Network Ltd, op cit., pp. 2–3; Chamber of
Commerce and Industry Queensland, op. cit., p. 2; Defence Teaming Centre, op.
cit., p. 1.
[63]. ASBFEO,
op. cit., p. 3.
[64]. Australian
Manufacturing Workers' Union, op. cit., p. 2; ASBFEO, op. cit., p. 3.
[65]. Australian
Manufacturing Workers' Union, op. cit., p. 2.
[66]. Senate
Standing Committee on Finance and Public Administration, ‘Answers
to questions taken on notice on 22 June 2017’, Department of Finance, Inquiry
into the Government Procurement (Judicial Review) Bill 2017, 13 July 2017,
p. 2.
[67]. See
heading ‘Current remedies for tenderers’ on page 5 of this Bills Digest.
[68]. This
requirement is introduced by paragraphs 20(a) and (b). Clause
22 of the Bill provides that the accountable authority of the relevant commonwealth
entity may issue a public interest certificate in relation to a specified
procurement.
[69]. Paragraph
20(c).
[70]. Paragraph
20(d).
[71]. Paragraph
20(e).
[72]. Paragraph
20(f)(i).
[73]. Paragraph
20(f)(ii).
[74]. Explanatory
Memorandum, op. cit., p. 6.
[75]. Ibid.
[76]. Paragraph
11(2)(a).
[77]. Paragraph
11(3)(a).
[78]. Paragraph
11(4)(a).
[79]. Paragraphs
11(2)(b), 11(3)(b) and 11(4)(b).
[80]. See
for example, Australian Chamber of Commerce and Industry, op. cit., p. 1; Chamber
of Commerce and Industry Queensland, op. cit., p. 2; Australian
Manufacturers Workers Union, op. cit., p. 2.
[81]. Dr
Seddon, op. cit., p. 2.
[82]. Australian
Manufacturing Workers' Union, op. cit., p. 2.
[83]. The
Legal Services
Directions 2017 are a set of binding rules issued by the
Attorney-General setting out requirements for the provision of legal services
to Commonwealth or Australian Government agencies. Appendix E makes provision
and outlines the criteria for Assistance to Commonwealth employees for legal
proceedings.
[84]. Subclause
16(c).
[85]. Subclause
16(d).
[86]. Paragraphs
16(c)(i)–(iii), 16(d)(i)–(iii).
[87]. A
delegation is also provided under clause 24, so officials within the
relevant agency may also be empowered to issue a public interest certificate.
[88]. Explanatory
Memorandum, op. cit., p. 9.
[89]. Ibid.,
p. 10.
[90]. Ibid.
[91]. Department
of Defence, Submission to the Senate Standing Committee on Finance and
Public Administration, op. cit., p. 2.
[92]. In
general statement of principle the High Court has said:
Indeed, the
expression "in the public interest", when used in a statute,
classically imports a discretionary value judgment to be made by reference to
undefined factual matters, confined only "in so far as the subject matter
and the scope and purpose of the statutory enactments may enable...”
See O'Sullivan v Farrer [1989]
HCA 61.
[93]. Explanatory
Memorandum, op. cit., p. 10.
[94]. Section
75(v) of the Commonwealth Constitution provides the High Court
with original jurisdiction to hear all matters ‘in which a writ of Mandamus or
prohibition or an injunction is sought against an officer of the Commonwealth’.
The High Court’s jurisdiction cannot be removed by legislation. The Judiciary Act 1903
confers on the Federal Court the same original jurisdiction as the High
Court under section 75(v).
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