Major changes are needed to procurement committing tens of billions of dollars every year, a new report by the Joint Committee of Public Accounts and Audit (JCPAA) has recommended.

Media release issue date: Wednesday, 9 August 2023

Major changes are needed to procurement committing tens of billions of dollars every year, a new report by the Joint Committee of Public Accounts and Audit (JCPAA) has recommended. Procurement is big business: over $80 billion in 2021-22, awarding more than 90,000 contracts to more than 12,000 businesses. Yet agencies systemically fail to comply with the rules and demonstrate value for money, lack compliance with ethical requirements, and demonstrate poor record keeping and contract management. The Chair of the JCPAA, Mr Julian Hill MP, said “Put plainly, the Commonwealth has serious commitment issues with respect to procurement. Public servants need to get far more comfortable and skilled in sharpening their pencils on suppliers, even if this leads to difficult conversations and rejection. “Action is needed to ensure that taxpayer dollars are not being wasted as a consequence of poor public sector procurement practices.” Mr Hill said that “when departments and agencies conduct procurements using taxpayer money, they should be able to demonstrate that money was spent effectively and appropriately”. Big winners from limited competition include the five biggest consulting firms (Accenture, KPMG, Deloitte, PWC and Ernst & Young) which secured nearly $2 billion in government contracts in the 2021-22 financial year, comprising more than $1.6 billion in new contracts as well as more than $300 million in contract variations or extensions. The report makes 19 recommendations to the audited entities and to the Department of Finance, aimed at improving procurement standards in the public service, and also improving Finance’s ability as a regulator. These include: Panels are stifling competition and value for money: A growing share of procurement is occurring from suppliers listed on Panels. Yet too often Panels are limiting competition and value for money, particularly advantaging the ‘Big Five’ consulting firms. Rules should make clear that: sole sourcing is not cool and multiple quotes should be obtained; a separate value for money assessment must still be undertaken; and panels should be refreshed more often. Fixing up AusTender: It should be made clear how many quotes were sought, even when procuring from a Panel, and why a contract was amended or varied. Take a broader view: Procurement is more than a ‘conveyor belt moving Commonwealth money out and goods and services in’. Modern professional practices are needed – more active management of key supply chains and markets to maximise value for money. Value for money always: Things may be urgent – but value for money and record keeping requirements still apply. Internal scrutiny: Internal Audit Committees should increase their scrutiny of procurement controls, and provide more assurance over major, complex or risky procurements. One rule for all: All Commonwealth Corporate entities should be subject to the CPRs, reversing the current onus which sees entities like the NDIA excluded. Re-professionalising procurement: Finance must address the lack of procurement expertise and capability within the Australian Public Service (APS) by prioritising the development of a procurement professional stream in the APS, and by updating the procurement framework to match the development the procurement profession has undergone outside the public sector in recent years. Finance needs to lead: Finance is the system steward and regulator. To be effective, Finance needs to know what’s happening in the system. The audit reports inquired into by the Committee are linked below: No. 6 (2021-22) Management of the Civil Maritime Surveillance Services Contract No. 15 (2021-22) Department of Defence’s Procurement of Six Evolved Cape Class Patrol Boats No. 30 (2021-22) Procurement of the National Capital Authority No. 42 (2021-22) Procurement of Delivery Partners for the Entrepreneurs’ Programme No. 5 (2022-23) Digital Transformation Agency’s Procurement of ICT Related Services The report is available on the Committee’s website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office). For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track this Committee’ button in the bottom right-hand corner of the page.

The Joint Committee of Public Accounts and Audit (JCPAA) will hold a public hearing on Friday 14 April to examine the findings of the Independent Review of Services Australia and NDIA Procurement and Contracting led by Dr Ian Watt AC (the Watt review), as part of its ongoing inquiry into Commonwealth procurement.

Media release issue date: Thursday, 13 April 2023

The Joint Committee of Public Accounts and Audit (JCPAA) will hold a public hearing on Friday 14 April to examine the findings of the Independent Review of Services Australia and NDIA Procurement and Contracting led by Dr Ian Watt AC (the Watt review), as part of its ongoing inquiry into Commonwealth procurement. The Watt review examined 95 procurements undertaken by Services Australia and NDIA from 2015–16 to the present, and found that 19 procurements with an approximate value of $374 million showed inconsistencies with the Commonwealth Procurement Rules or did not show good practice. Mr Julian Hill MP, the Chair of the Committee, noted that Dr Watt’s findings closely mirrored the issues that had been raised by the Australian National Audit Office during the Committee’s procurement inquiry. “The Watt review flagged five of the 95 procurements as being of lower standard than comparable procurements undertaken by the agencies,” Mr Hill stated. “The Committee is keen to question the key parties involved in the procurement process to gain an understanding of where the issues lie and how they have been addressed.” The Committee will be hearing from Dr Ian Watt AC, followed by the two agencies subject of the review, as well as representatives from a number of companies who were awarded contracts identified as being of particular concern in the Watt review including Infosys Pty Ltd, Portland, Synergy 360 / Milo Consulting and Australian Property Reserve Pty Ltd. Following the session on procurement, the JCPAA will continue its program of public hearings for its inquiry into Commonwealth Financial Statements hearing from the NDIA. Details for the public hearings are: Friday 14 April 2023 Inquiry into Commonwealth procurement Time: 10.00am – 4.00pm AEST Venue: Committee Room 2R1, Parliament House, Canberra Inquiry into Commonwealth Financial Statements Time: 4.15pm – 6.00pm AEST Venue: Committee Room 2R1, Parliament House, Canberra Further information about the inquiries is available on the Committee website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office). For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track Committee’ button in the bottom right-hand corner of the page.

The Joint Committee of Public Accounts and Audit (JCPAA) will hold public hearings this week for its inquiries into Commonwealth procurement, Commonwealth Grants Administration and the Commonwealth Financial Statements 2021-22.

Media release issue date: Wednesday, 29 March 2023

The Joint Committee of Public Accounts and Audit (JCPAA) will hold public hearings this week for its inquiries into Commonwealth procurement, Commonwealth Grants Administration and the Commonwealth Financial Statements 2021-22. THURSDAY: Procurement Inquiry wrapping up Thursday 30 March 2023 Time: 08.00am – 09.00am Venue: Committee Room 2R1, Parliament House, Canberra The Australian National Audit Office (ANAO) and the Community and Public Sector Union will appear before the JCPAA to further discuss concerns about contract management by the Department of Home Affairs. This hearing will allow the Committee to sum up the broader evidence received throughout the inquiry in what is likely to be the last hearing. FRIDAY: Grants Administration Inquiry continues Friday 31 March 2023 Time: 08.30am – 10.00am Venue: Committee Room 2R1, Parliament House, Canberra On Friday, JCPAA will welcome the Department of Finance and the ANAO for the final hearing for the inquiry into Commonwealth Grants Administration. The Committee will consider questions on the effectiveness of the Commonwealth Grants Rules and Guidelines and best practice in the administration of grants programs. FRIDAY: Commonwealth Financial Statements Inquiry kicks off Friday 31 March 2023 Time: 10:15am – 12:30pm Venue: Committee Room 2R1, Parliament House, Canberra Also on Friday, the JCPAA will commence public hearings for its inquiry into the Commonwealth Financial Statements. Key themes to be explored include: ANAO concerns regarding Defence’s use of appropriations Financial sustainability of government departments, in the context of media reports that the Department of Agriculture, Fisheries and Forestry is “on the cusp of requiring a financial bailout”, and concerns regarding the Department of Home Affairs. The Committee Chair, Mr Julian Hill MP, noted that these themes were just two of many matters raised in the ANAO’s audit findings from its review of the financial statements. ‘The Committee has a particular interest in understanding how Commonwealth entities are managing their financial resources to meet their present and future funding commitments,’ Mr Hill said. Further information about the inquiries is available on the Committee website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office). For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track Committee’ button in the bottom right-hand corner of the page.

The Joint Committee of Public Accounts and Audit (JCPAA) will hold a public hearing to hear from the Secretary of the Department of Home Affairs, Mr Michael Pezzullo AO, along with Australian Border Force Commissioner Michael Outram for the Committee’s inquiry into Commonwealth procurement.

Media release issue date: Friday, 10 February 2023

The Joint Committee of Public Accounts and Audit (JCPAA) will hold a public hearing at 9.00am this morning to hear from the Secretary of the Department of Home Affairs, Mr Michael Pezzullo AO, along with Australian Border Force Commissioner Michael Outram for the Committee’s inquiry into Commonwealth procurement. The hearing will focus on Home Affairs’ management of the Civil Maritime Surveillance contract. Committee Chair Mr Julian Hill MP noted that the audit of the contract by the Australian National Audit Office (ANAO) had shown significant deficiencies in contract management by Home Affairs. ‘The key principle of the Commonwealth Procurement Rules is that agencies should get good value for money from their procurement spend, and contract management represents a significant part of that effort’ Mr Hill said. ‘It is deeply concerning to see the extent of problems identified by the ANAO in this audit.’ Following Home Affairs’ appearance, the JCPAA will commence its program of public hearings for its Inquiry into Commonwealth grants administration. Details for the public hearings are: Friday 10 February 2023 Time: 09.00am – 12.00pm Venue: Committee Room 2R1, Parliament House, Canberra Inquiry into Commonwealth Procurement Inquiry into Commonwealth Grants Administration Further information about the inquiries is available on the Committee website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office). For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track Committee’ button in the bottom right-hand corner of the page.

The Joint Committee of Public Accounts and Audit will hold public hearings on 14 and 16 December for its inquiries into Commonwealth procurement and into overseas crisis management by the Department of Foreign Affairs and Trade (DFAT).

Media release issue date: Tuesday, 13 December 2022

The Joint Committee of Public Accounts and Audit will hold public hearings on 14 and 16 December for its inquiries into Commonwealth procurement and into overseas crisis management by the Department of Foreign Affairs and Trade (DFAT). The procurement inquiry is considering audits of policies and practices at Commonwealth agencies including the Department of Industry, Science and Resources, the Department of Home Affairs, Defence, the Digital Transformation Agency and the National Capital Authority. Committee Chair Mr Julian Hill MP noted that the audits by the Australian National Audit Office (ANAO) have shown that the Commonwealth Procurement Rules (CPRs) set by the Minister for Finance are not being followed. ‘The key principle of the CPRs is that agencies should get good value for money when spending taxpayers money on goods and services,’ Mr Hill said. ‘Yet the Auditor-General found a disturbing level of consistent non-compliance. Of particular concern is the number of audits where ethical concerns were raised. ‘The Committee will interrogate what changes these agencies are making to address the problems uncovered by the audit office and what else needs to be done’. The inquiry into overseas crisis management looks at DFAT’s efforts to facilitate the return of Australian citizens during the COVID-19 pandemic, based on Auditor-General Report No. 39 (2021-22). 'The Auditor-General found weaknesses in DFAT’s response to the pandemic including a lack of preparation,’ Mr Hill said. ‘The Committee is keen to hear about changes DFAT is making to ensure it is well placed to respond to large-scale international crises in the future’. Details for the public hearings are: Wednesday 14 December 2022 Time: 11.00am – 4.30pm AEDT Venue: Committee Room 1R3, Parliament House, Canberra Inquiry into Commonwealth Procurement Friday 16 December 2022 Time: 8.30am – 1.00pm AEDT Venue: Committee Room 1R3, Parliament House, Canberra Inquiry into Commonwealth Procurement (continued) Inquiry into the Department of Foreign Affairs and Trade’s crisis management arrangements Further information about the inquiries is available on the Committee website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office) or via Phillip Danh 0469 646 998. For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track this Committee’ button in the bottom right-hand corner of the page.

A new Parliamentary inquiry will examine Commonwealth Procurement, focusing on five recent reviews of procurement practices at Commonwealth agencies.

Media release issue date: Tuesday, 4 October 2022

A new Parliamentary inquiry will examine Commonwealth Procurement, focusing on five recent reviews of procurement practices at Commonwealth agencies. The inquiry, to be conducted by the Joint Committee of Public Accounts and Audit (JCPAA) will examine ways to improve transparency, efficiency, and value for money in Commonwealth procurement.    The Chair of the JCPAA, Mr Julian Hill MP, said that “in recent years the Australian National Audit Office has too often found that Commonwealth agencies have failed to follow both the letter and the spirit of the Commonwealth Procurement Rules. The Procurement Rules are to ensure value for money as well as encourage competition, efficiency and accountability in the expenditure of public money. “There appears a concerning pattern of agencies cutting corners or interpreting the rules to suit themselves and make life easier for themselves, rather than apply the Rules and let more people and firms bid for Commonwealth work. Maintaining efficient, effective, economical and ethical procurement practices will always be a challenge for governments”, Mr Hill said, “and the Committee hopes to identify how Commonwealth procurement practices can be improved to deliver better value for money for Australian taxpayers.” The five Auditor-General Reports that will form the starting point for the Committee’s inquiry are: No. 6 (2021-22) Management of the Civil Maritime Surveillance Services Contract No. 15 (2021-22) Department of Defence’s Procurement of Six Evolved Cape Class Patrol Boats No. 30 (2021-22) Procurement of the National Capital Authority No. 42 (2021-22) Procurement of Delivery Partners for the Entrepreneurs’ Programme No. 5 (2022-23) Digital Transformation Agency’s Procurement of ICT Related Services The Committee invites submissions to the inquiry addressing the terms of reference to be received by Friday, 11 November 2022. Details of the inquiry – including the terms of reference and public hearings – will be made available on the Committee website. Media inquiries Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit on (03) 9791 7770 (Electorate Office) or via Phillip Danh 0469 646 998. For background information Committee Secretariat 02 6277 4615 jcpaa@aph.gov.au For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track Committee’ button in the bottom right-hand corner of the page.