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Guidance on Complying with Policies of the Commonwealth in Procurement - FMG 10
Published November 2010
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Table of Contents
1. Purpose and Scope
1.1 The Commonwealth Procurement Guidelines (CPGs) identify the legal requirement to comply with all relevant policies of the Commonwealth that interact with procurement under Regulation 9 of the Financial Management and Accountability Regulations 1997.
1.2 FMA Regulation 9 provides that an approver must not approve a spending proposal unless the approver is satisfied, after reasonable inquiries, that giving effect to the spending proposal would be a proper use of Commonwealth resources. Proper use is defined in section 44(3) of the Financial Management and Accountability Act 1997 (FMA Act) as the efficient, effective and ethical use of Commonwealth resources that is not inconsistent with the policies of the Commonwealth.
1.3 The purpose of this guidance is to assist agencies subject to the FMA Act to comply with policies of the Commonwealth in procurement. It does not apply to Commonwealth Authorities and Companies Regulations 1997 bodies which are to refer to General Policy Orders.
1.4 This guidance focuses on policies of the Commonwealth as they relate to procurement. It includes a core list of policies that interact with procurement which does not preclude officials applying other policies of the Commonwealth that are to be complied within a specific procurement process.
1.5 Financial Management Guidance No. 10, Guidance on Complying with Government Policy in Procurement – June 2010 is replaced by this guidance.
2 Interacting Policy Table
2.1 The Interacting Policy Table (Table 1) provides a core list of policies of the Commonwealth that interact with procurement through FMA Regulation 9.
2.2 Policy Departments are responsible for administering all aspects of their policy (or policies) listed in Table 1.
2.3 Officials are responsible for informing themselves of the policies that apply to a specific procurement. They should refer to their agency’s Chief Executive’s Instructions for guidance and, if needed, approach the relevant Policy Department for further information on a specific policy.
2.4 Table 1 provides details of each policy including:
- the name of the policy or guidance with a website link;
- a summary of each policy;
- the name of the Policy Department;
- a contact point for further information; and
- information on the application and/or minimum threshold for the policy.
| Policy / Policy Guidance | Policy Description | Policy Department | Contact Point | Application / Threshold |
|---|---|---|---|---|
| Australian Industry Participation | ||||
Australian Industry Participation Plans for Government Procurement [
|
The Australian Industry Participation (AIP) National Framework applies to major Commonwealth Government procurements (generally above A$20 million). Tenderers for certain Commonwealth procurements are required to prepare and implement an AIP Plan. |
DIISR |
aip |
Applicable to large Commonwealth tenders generally above A$20 million. |
| Coordinated Procurement | ||||
Whole-of-government procurement arrangements are being put in place for some goods and services. Their use is mandatory for FMA Act agencies. |
Finance |
No minimum threshold. | ||
| Employment and Workplace Relations | ||||
|
The Fair Work Principles require Commonwealth entities to obtain information from tenderers about their compliance with their obligation to ensure fair, cooperative and productive workplaces, and precludes Commonwealth entities from contracting with suppliers in defined circumstances. |
DEEWR |
fairworkprinciples |
Applies to all covered procurements.
|
The National Code of Practice for the Construction Industry and Implementation Guidelines [
|
Applies to all Commonwealth construction projects, and indirectly funded projects where the Australian Government’s contribution is:
|
DEEWR |
building |
No minimum threshold for Commonwealth-funded construction projects. |
| Environment | ||||
Energy Efficiency in Government Operations [ |
The policy aims to reduce the energy consumption of Australian Government operations with particular emphasis on building energy efficiency. It commits to a progressive improvement of overall agency energy performance through annual energy intensity reporting, the use of Green Lease Schedules, and minimum efficiency requirements. |
DCCEE |
govoperations@climatechange.gov.au Government Energy Efficiency Team02 6159 3123 |
No minimum threshold. |
The Australian Government is committed to the National Packaging Covenant and is actively participating in its development and implementation. The Covenant was signed by the Australian Government in November 2005. It aims to reduce waste generation and environmental impacts of packaging. |
DSEWPaC |
No minimum threshold. | ||
The National Waste Policy aims to avoid the generation of waste; reduce the amount of waste (including hazardous waste) for disposal; manage waste as a resource, ensure that waste treatment, disposal, recovery and reuse is undertaken in a safe and environmentally sound manner; and contribute to broader economic, environmental and social goals. |
DSEWPaC |
No minimum threshold. |
||
Australian Government ICT Sustainability Plan 2010-2015 [ ] |
The Plan requires agencies to adopt mandatory environmental standards for ICT acquisitions and to strengthen management processes for environmental risks and issues such as managing ICT energy use, carbon emissions and waste. There are also agency performance measures and targets to drive environmental performance and sustainability improvement across the Australian Government. | DSEWPaC | sustainableICT@environment.gov.au Government ICT Sustainability Team |
Applicable to ICT procurements. |
| Financial Framework | ||||
The Commonwealth Fraud Control Guidelines provide national minimum standards to assist agencies in carrying out their responsibilities to combat fraud against their programs including outsourced functions and programs. |
AG |
fraud |
No minimum threshold. | |
Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort |
These guidelines advise officials of their responsibilities when considering entering into arrangements involving issuing indemnities, guarantees, warranties or letters of comfort on behalf of the Commonwealth. They also reinforce the importance of risk management strategies and awareness regarding the use of such instruments. |
Finance |
No minimum threshold. | |
Procurement 30 Day Payment Policy for Small Business
|
Agencies must pay small businesses within 30 days of receipt of a correctly rendered invoice for payments up to A$5 million (GST inclusive). Agencies are to provide for late interest payment for overdue invoices relating to new procurement contracts up to A$1 million (GST inclusive). |
Finance |
Applies to small businesses for:
|
|
Australian Government Foreign Exchange Risk Management Guidelines and Finance Circular |
These guidelines articulate government policy on foreign exchange risk management where payments are made in currencies other than Australian dollars. |
Finance |
No minimum threshold. | |
National Public Private Partnership Policy Framework and Guidelines [ |
Public Private Partnership principles must be considered when developing procurement proposals which scope the use of private financing and assessment, and approval processes for such proposals. |
Infrastructure Australia |
Procurements with capital valued above A$50 million. May apply to procurements below the threshold if suitable. |
|
Competitive neutrality requires that significant Government business activities should not enjoy net competitive advantages over their private sector competitors simply by virtue of public sector ownership. |
Finance and Treasury |
No minimum threshold. | ||
| Information, Communications and Technology | ||||
Limited Liability in Information and Communications Technology Contracts |
This Finance Circular provides guidance on the capping of liability when entering into Information and Communications Technology (ICT) contracts. |
Finance |
No minimum threshold. | |
The SME Participation Procurement Policy outlines requirements for Australian Government ICT contracts valued at A$20 million and above to include, as a general rule, a minimum level of SME participation of 10 per cent of the contract value for ICT hardware procurements, and 20 per cent of the contract value for ICT services procurements. |
DIISR |
Applicable to ICT procurements from SMEs valued at or above A$20 million. | ||
| International Obligations | ||||
On rare occasions trade sanctions may apply to goods that an agency may wish to procure. |
DFAT |
No minimum threshold. | ||
| Legal | ||||
|
Legal Services Directions (LSDs) establish the framework within which government legal services must be delivered. Paragraph 9A.1 and Appendix F of the Legal Services Directions 2005 set out the rules and obligations Commonwealth agencies must adhere to when procuring legal services. This includes using a common form tender package (including a standard Request for Tender and Deed of Standing Offer) when tendering for legal services. |
AG |
No minimum threshold. | |
Intellectual Property Principles for Australian Government Agencies [ |
The Statement of IP Principles sets out a policy for management of intellectual property (IP) by Australian Government agencies. The IP Principles cover a full range of issues relevant to effective management of IP, including procurement, record keeping, industry development and broader innovation policy, and public access. |
AG |
Commonwealth. |
No minimum threshold. |
| Security | ||||
Agency heads are responsible for ensuring official resources, especially classified information, are secured from unacceptable risk, including when services are delivered by external service providers. The Protective Security Core Policy and mandatory requirements direct agencies to ensure that contracted service providers comply with the Protective Security Policy framework. |
AG |
No minimum threshold. | ||
Australian Government Information, Communications and Information Systems Security Manual [ |
ACSI 33 sets access control standard for In-Confidence information. It recommends use of Secure Socket Layer to protect transmission of information over any network, but particularly the Internet. |
DSD |
No minimum threshold. | |
| Social Inclusion | ||||
The Commonwealth Disability Strategy was introduced to assist Government agencies meeting their obligations under the Disability Discrimination Act 1992. Its purpose is to make sure that people with disabilities have the same level of access to all Australian Government policies, programs and services as other members of the Australian community. |
FaHCSIA |
No minimum threshold. | ||
Equal Opportunity for Women in the Workplace – Contract Compliance Policy [
|
The Contract Compliance Policy promotes gender equality in the workplace by: (1) educating smaller employers; and (2) requiring larger employers to put in place and report on a program for removing systemic barriers to equality for men and women. |
EOWA |
EOWA’s Compliance |
No minimum threshold. |
| Indigenous Opportunities Policy [] |
Tenders, where the expenditure is over A$5 million (A$6 million for construction) in a region with a significant Indigenous population, are required to develop an Indigenous Training, Employment and Supplier Plan as part of their application. Agencies are required to consult with DEEWR when planning a procurement activity that exceeds the policy threshold. | DEEWR | IEPNP@deewr.gov.au | Applies to procurements over A$5 million (A$6 million for construction). |
3. Other Obligations in Procurement
3.1 The CPGs refer to important obligations in procurement. These are not policies that interact with procurement through FMA Regulation 9 but are nonetheless to be considered in procurement processes.
3.2 Some obligations must be complied with after a spending proposal has been approved. For example, mandatory reporting obligations require the reporting of certain contracts after a contract has been entered into. In such cases, it would be sufficient under FMA Regulation 9 for the approver to be satisfied that adequate procedures are in place to ensure compliance. Other obligations, such as obligations under international agreements, become important when implementing government policies that interact with procurement.
3.3 Table 2 lists obligations in procurement that procurement officials are to comply with. It provides details of each obligation, including:
- the name of the policy or guidance with a website link;
- a summary of each policy;
- the name of the Policy Department; and
- a contact point for further information.
| Policy / Policy Guidance | Policy Description | Policy Department | Contact Point |
|---|---|---|---|
| International Obligations | |||
Obligations under International Agreements in Government Procurement |
Obligations under Australia’s Free Trade Agreements are incorporated into, and will be met by following, the CPGs. An example of an international obligation is the Mandatory Procurement Procedures. |
Finance and DFAT |
|
| Transparency | |||
Standard Contract Clauses to Provide ANAO Access to Contractors´ Information
|
Agencies must consider including a provision in contracts that enable access to contractors’ records and premises by the Australian National Audit Office. Model access clauses are provided. |
Finance |
|
Mandatory Publishing Obligations for Procurement Activities (FMG 15) |
Agencies are to:
|
Finance |
|
Requirements for Annual Reports for Departments, Executive Agencies [ |
A core set of information is required in annual reports to ensure that accountability requirements are met and to provide consistency for readers. |
PM&C |
|
Government Guidelines for Official Witnesses before Parliamentary Committees and Related Matters [ |
Public servants are required to assist Ministers to fulfil their accountability obligations by providing full and accurate information to the Parliament about the factual and technical background to policies and their administration. |
PM&C |
|
| Privacy | |||
Privacy Obligations for Commonwealth Contracts[
|
The Privacy Act 1988 (s95B) imposes obligations on Commonwealth agencies when entering into contracts to provide services to or on behalf of the agency to apply the information privacy principles (IPPs). The information sheet provides a link to model contract clauses for the protection of personal information. |
OPC |
privacy@privacy.gov.au |
| Records Management | |||
Agencies contracting out the provision of services must, under the Archives Act 1983, ensure the arrangements include records management practices which meet Australian Government standards and requirements. Records Issues for Outsourcing provides guidelines for agencies about their responsibilities when employing contractors. It includes GDA 25 authorising the transfer of relevant agency records to service providers. |
NAA |
||
Record Requirements for Agencies |
To understand what records should be created during procurement processes and how they should be managed, the Archives Act 1983 requires that you consider making and keeping records as evidence of business activity, business-related risks, and other factors. These policies and guidelines provide advice on managing the records created during procurement: |
NAA |
|
| Confidentiality | |||
Guidance on Confidentiality in Procurement (FMG 3)
|
To identify and manage confidential information whilst ensuring an accountable and transparent procurement process. | Finance | procurementagencyadvice@finance.gov.au |
4. Further Information
For further information and advice on policies that interact with procurement, consult the relevant Policy Department (refer to the relevant website links in the first instance).
For information and advice on the approval process for modifying or proposing new policies that interact with procurement, contact procurementagencyadvice@finance.gov.au.Appendix 1
Table 3 lists the full titles of agencies that have responsibility for policies that interact with procurement.
| AG | Attorney General’s Department |
| ANAO | Australian National Audit Office |
| APSC | Australian Public Service Commission |
| DBCDE | Department of Broadband, Communications and the Digital Economy |
| DSEWPaC | Department of Sustainability, Environment, Water, Population and Communities |
| DEEWR | Department of Education, Employment and Workplace Relations |
| DFAT | Department of Foreign Affairs and Trade |
| DIISR | Department of Innovation, Industry, Science and Research |
| DSD | Defence Signals Directorate |
| EOWA | Equal Opportunity for Women in the Workplace Agency |
| FAHCSIA | Department of Families, Housing, Community Services and Indigenous Affairs |
| Finance | Department of Finance and Deregulation |
| NAA | National Archives of Australia |
| OPC | Office of the Privacy Commissioner |
| PM&C | Department of the Prime Minister and Cabinet |
| Treasury | Department of the Treasury |
Copyright Notice
© Commonwealth of Australia 2010
This work is copyright. You may download, display, print and reproduce this material in unaltered form only (retaining this notice) for your personal, non-commercial use or use within your organisation. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. Requests and inquiries concerning reproduction and rights should be addressed to Commonwealth Copyright Administration, Attorney General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca []
Contact for information on this page: Procurement Agency Advice
5 September, 2011