Purpose
To provide guidance on the involvement of ministers during the conduct of a procurement process.
Commonwealth Procurement Rules (CPRs) 3.2:
Except where required by law, it is the government’s policy position that ministers will not4:
- be involved in the conduct of procurement processes; or
- direct officials about the conduct of procurement processes.
CPRs 3.3:
Where ministers are required to have a role in a procurement process that role and any decisions arising from that role should be appropriately documented and these CPRs must be applied by officials to the maximum extent practicable.
- With specific regard to where a procurement is a covered procurement under the Government Procurement (Judicial Review) Act 2018, all relevant CPR paragraphs (as identified in 6.10 and Division 2) must be applied.
4 Consistent with section 19 of the PGPA Act, an Accountable Authority may keep the minister informed about the conduct of procurement processes.
Context
The Independent Review of Services Australia and the National Disability Insurance Agency Procurement and Contracting conducted by Dr Ian Watt AC in March 2023 (Watt Review), recommended ‘that the CPRs be amended to explain the deterministic role of officials and that they preclude ministers, ministerial advisers and senior officials from directing officials in relation to procurements’ (Recommendation 12a.)
Procurement is an administrative function of government and the CPRs are directed at officials from relevant entities. They must be adhered to when procuring goods and services. The relevant entity’s Accountable Authority Instructions (AAIs) (or equivalent) must also be applied. In accordance with the APS Values and Code of Conduct, officials must also act ethically at all times. This includes in relation to the application of the CPRs when administering a procurement process.
For officials to conduct procurements in a manner consistent with the CPRs, ministers must not direct officials (other than where the minister is required by law to have a role).
Policy decisions contrasted with procurement decisions
The Government’s policy position that ministers will not be involved in the conduct of procurement processes is not intended to limit the Government’s capacity to make policy decisions.
Instances may arise where a minister or Government makes a policy decision that would appear to direct the undertaking of a procurement process. For example, Government may decide to fund an initiative which can only be delivered by one or a small number of suppliers or require implementation of a proposal within a certain timeframe.
These Government policy decisions do not extend to making decisions related to the conduct of a procurement process such as determining the method of procurement (e.g. limited or open tender), selecting the suppliers invited to respond, or determining the evaluation criteria.
Typically, a Government policy decision would not preclude an official from making decisions at any stage of the procurement process. For example, if the implementation of a Government decision requires the purchase of a good that is only available from a single supplier, should the official conclude that a limited tender approach is most appropriate method (instead of testing the market for a comparable good, for instance), the official should document their decision, including the reasons for doing so.
When a minister is legally required to be involved in procurement
Procurement is an administrative function of government, however there are limited circumstances in which a minister is legally required to be involved in procurement. For example, some prescribed Corporate Commonwealth Entities (CCEs) have enabling legislation that stipulates the relevant minister’s involvement in approving the commitment of funds over a certain value.
Where ministerial involvement is required, officials must ensure that the minister is appropriately briefed on the legal requirements and their role in the procurement. Any decisions made by a minister should be clearly documented and consistent with the legal requirement. Officials must ensure that the CPRs are applied to all other parts of the procurement process to the greatest extent possible. Any deviations from the application of the CPRs should be recorded and this record should include the justification for the deviation.
Should there be any lack of certainty as to whether ministerial involvement in a procurement process is required by law, officials should seek legal advice prior to engagement with the minister.
International obligations
Officials must ensure that where ministers are involved in a procurement process, ministers are briefed on the relevant requirements to ensure compliance with our international obligations.
For relevant procurements, Australia’s international obligations include the ability for suppliers (or potential suppliers) to complain about contraventions to the relevant rules set out in the CPRs under the Government Procurement (Judicial Review) Act 2018 (GPJR Act) (CPR paragraph 6.10 and Division 2 refer). These obligations extend to where a minister may have a role in the conduct of a procurement process.
Please refer to Resource Management Guide No. 422 Handling complaints under the Government Procurement (Judicial Review) Act 2018 for further information.
CPR paragraph 2.6
Where CPR paragraph 2.6 is applied by an Accountable Authority (or their delegate) to set aside CPRs paragraphs 3.2 and 3.3, the Accountable Authority (or their delegate) should clearly document the reasons for application of paragraph 2.6 and include information on the role of the minister in the procurement and the justification for this decision.
How does the Public Governance, Performance and Accountability Act 2013 (PGPA Act) interact with the procurement framework?
Section 71 of the PGPA Act sets out the requirements for the approval of proposed expenditure by a minister and provides the legislative authority for ministers to approve the expenditure of funds. The Government has made a policy decision through the CPRs that, while possible under the PGPA Act, ministers will not, unless required to by other legislation, exercise this power to undertake a procurement decision.
Keeping the minister informed
The footnote to CPR paragraph 3.3 recognises that ministers may have an interest in the progress or outcome of a procurement process and clarifies that an Accountable Authority may keep the minister informed about the conduct of a procurement process. Information provided to the minister must be consistent with the management of confidentiality and probity for the procurement.
Officials should advise ministers that if the minister is approached by a member of the public seeking information on an active procurement process, these queries should be referred to the relevant entity via appropriate communication channels.
Further Advice
The Watt Review recommendation included references to ‘ministerial advisers’ and ‘senior officials’. Ministerial advisers are not included in paragraphs 3.2 and 3.3 as they have no formal delegated powers to direct officials including in relation to procurement.
The CPRs apply to APS officials, including senior officials. It is the responsibility of each relevant entity to establish its own processes for managing a procurement process, which may involve decision making by senior officials, and set out the roles of relevant officials in the procurement’s management and probity plans.
Further questions can be directed to procurementagencyadvice@finance.gov.au.
Case studies are provided below.
Case Study 1
A CCE that is a relevant entity has enabling legislation requiring the CCE to obtain the approval of the minister for all financial commitments above $10 million. The Chief Executive Officer administers the day-to-day operations of the CCE.
The CCE has identified the need to procure a new IT infrastructure system which is estimated to cost $11 million. The CCE, following the process set out in its AAIs, briefs the minister noting that the procurement will be undertaken, and the resulting value of the procurement is likely to require the minister’s approval. The CCE undertakes an open tender process consistent with the CPRs. Once the successful tenderer has been identified and the delegate has made a decision, the minister must be briefed on the decision and approval sought to enter into the financial commitment. Following the minister’s approval, the CCE can enter into a contract with the preferred tenderer.
There is a legal requirement for ministerial involvement in the conduct of the procurement process. The CCE must maintain records of the briefings to the minister and the approval to enter into the contract. Officials from the CCE comply with the CPRs throughout the procurement process with the exception of the additional approval stage where the minister approves the financial commitment.
Case Study 2
A minister has indicated to the Accountable Authority of an NCE that they would like to be the decision maker for the procurement of strategic planning advice for a new national strategy. The minister would also like to determine the procurement method (limited tender) and nominate the potential suppliers to be invited to tender. There is no legal requirement for ministerial involvement in the conduct of the procurement process therefore in accordance with the CPRs, the NCE is responsible for undertaking procurement process at its discretion.
The NCE, as part of developing the documentation (which includes forming the scope) may wish to consult relevant stakeholders, including the minister, however the all decisions related to the operation of the procurement activity such as the determining the method of procurement (e.g. limited or open tender), selecting the suppliers invited to respond, determining the evaluation criteria and approach to market (ATM) package and the final decision rest with the delegate within the relevant entity.
The Accountable Authority briefs the minister of the Government’s policy position regarding the involvement of ministers in procurement processes and that the NCE will undertake the procurement as part of its ordinary operational processes and keep records of the briefing. The Accountable Authority may undertake to keep the minister informed of the progress of the process and decisions taken by the NCE. The Accountable Authority should not enable or facilitate the minister to make procurement decisions about or during the conduct of the procurement process.
Case Study 3
The Government, in response to a new policy proposal (NPP) approves the purchase of a vaccine. The NPP identifies that the vaccine is currently only manufactured by one business.
The Department of Health undertakes a due-diligence process to confirm manufacturers and based on this process decides to undertake a limited tender process, approaching the sole supplier. There is no legal requirement for ministerial involvement in conduct of the procurement process. All decisions regarding the procurement are undertaken by the Department, with no involvement from the minister.
