Handling Procurement Complaints

Principles

The Commonwealth Procurement Rules (CPRs) outline the responsibilities of officials when dealing with Commonwealth procurement complaints.
Paragraph 6.8 of the CPRs requires officials to apply timely, equitable and non-discriminatory complaint-handling procedures, including providing acknowledgement soon after a complaint is received. Officials should aim to manage complaint processes internally, when possible, through communication and conciliation.

As the Commonwealth Procurement Framework is devolved, an entity’s Accountable Authority is responsible for determining the individual entity complaints handling procedures. Entities are advised to contact their central procurement teams for further information specific to their entities’ complaint handling processes.

To minimise or avoid complaints, entities must conduct procurement processes in a manner that is consistent with the CPRs and broader Commonwealth Procurement Framework. Further, entities should ensure that their documentation, processes and procedures are consistent with the relevant parts of the CPRs and that, when potential suppliers raise concerns, they engage positively and constructively with a view to resolving any matters raised.

Some key considerations for entities include:

ensuring procurement processes are non-discriminatory and treating potential suppliers equitably,
ensuring clarity of tender documentation,
providing sufficient time to allow potential suppliers to prepare and lodge a response to an approach to the market,
ensuring tender rules and the tender evaluation and probity plans are followed,
ensuring liability capping requirements and insurance are appropriate for the procurement before the procurement process begins, and
maintaining accurate records and documentation commensurate with the scale, scope and risk of the procurement. This includes documenting substantive decisions made in relation to the procurement and the basis of those decisions.

Effective complaints handling provides transparency and accountability and promotes application of robust and defensible actions in procurement processes. To support this, entities should ensure that they have appropriate documentation, processes and procedures in place and easily accessible for officials, and that these are consistent with the relevant parts of the CPRs. The procedures and processes should include that, when potential suppliers raise concerns, entities engage positively and constructively with a view to resolving any matters raised. In addition, this should make clear that complaints will not prejudice a supplier (or potential supplier’s) participation in any future Australian Government procurement process.

When developing complaint handling procedures for their entity, Accountable Authorities should ensure that they include clear processes to receive and investigate complaints made under section 18 of the Government Procurement (Judicial Review) Act 2018, in addition to general complaints that do not fall under that Act. More information on the Act can be found below.

Practice

In implementing complaints handling procedures, entities should give consideration to adopting the following key components:

publish their complaints handling procedures on their website and refer to them in approach to market documentation,
complaints handling procedures should require that complainants lodge their complaint in writing to the entity in the first instance,
most complaints should be considered in the first instance by an official with the appropriate authority, knowledge and understanding of the relevant procurement activity, for example, the contact identified in tender documentation. However, entities may also wish to ensure complaints are notified to an independent central registration point, such as the Central Procurement team, internal legal team or internal probity area,
for more complex complaints, it may be appropriate that the official conducting the investigation has not had previous substantive involvement in the procurement (more information below),
for complaints that are subject to the Government Procurement (Judicial Review) Act 2018, the investigating official should be independent of the procurement process.

When dealing with a complaint, entities should be mindful to follow their entity’s complaints handling processes and procedures, and document and keep on record, the complaint, including the response and any action taken. Key components entities may wish to factor into their complaints handling procedures include:

the complainant’s name, business name, address and telephone contact details,
a reference to which procurement the complaint is in regards to,
a detailed statement as to what the complainant considers was defective with the procurement processes which could include any references to the provisions in the Commonwealth Procurement Rules relevant to the complaint,
relevant events, facts and evidence to support the complaint,
whether the complainant believes the complaint applies under the Government Procurement (Judicial Review) Act 2018,
how the complainant's interests are affected by the conduct, and
a statement as to what the complainant wishes to achieve from the complaint process.

Importantly, complaints handling procedures should make clear that, should any of the above be unclear from the material presented by the complainant, it is the responsibility of the Accountable Authority to seek immediate clarification from the complainant in order to assess what course of action is required and, in particular, whether the procurement must be suspended under section 20 of the Act.

Where a complaint is received in writing, the entity should assess the complaint to determine if it is covered under the Act.

If the complaint IS covered under the Act, the entity must handle the complaint in accordance with guidance in Resource Management Guide 422 (See Complaints covered by the Government Procurement (Judicial Review) Act below),
If the complaint is NOT covered by the Act the entity should assess whether the complaint is simple or complex (See Complaints NOT covered by the ACT).

When assessing whether a complaint that is NOT covered by the Act is simple or complex:

If a complaint is simple and dealt with orally, no further written acknowledgement may be required, however the discussion and outcome should be documented and kept on record,
If the complaint is complex, or the complainant is seeking to make a formal complaint, entities should follow their formal complaints handling processes (see Complaints not covered by the Act below).

Some behaviours to model when undertaking effective complaints management include:

regular communication with the complainant (in writing) throughout the complaint, management process, advising of anticipated timeframes for reviewing the complaint,
investigating complaints impartially and in a timely, ethical and transparent manner,
ensuring the process followed and decisions made are sufficiently documented, and
using insights gained through complaints to identify systemic issues to inform improvements required to systems, processes, guidance and policies.

Following a decision, the complainant should be provided with the outcome in writing, outlining:

the issues raised,
the examinations and processes carried out as part of the review,
an assessment of the complaint, including the outcome and any actions undertaken by the entity where issues were identified as a result of the review (for example, entity process or policy alterations),
the fact that the entity considers the complaint investigation closed, where this is the case, and
a list of the tenderer's options if they are not satisfied with the outcome.

Complaints covered by the Government Procurement (Judicial Review) Act 2018

The Government Procurement (Judicial Review) Act 2018 establishes an independent complaint mechanism for government procurement processes. The Act requires the Accountable Authorities of relevant Commonwealth entities to formally investigate complaints that are made in accordance with the Act, and to suspend procurements during the investigation of a complaint under the Act, unless a public interest certificate is in place. The Act also places obligations on suppliers to take reasonable steps to resolve a complaint with the relevant Commonwealth entity before taking action in the Federal Circuit and Family Court of Australia.

The Act applies to contraventions of the relevant rules in the CPRs
(paragraph 6.9) relating to covered procurements by relevant Commonwealth entities in accordance with both Division 1 and Division 2 of the CPRs.

If the complaint is a valid complaint under the Act it must be handled in accordance with the guidance in Resource Management Guide 422. Under the Act, the Accountable Authority must undertake an investigation and under section 19 (1) (b) to prepare a report of the investigation. Should the complainant wish to withdraw the complaint prior to completion of the investigation, the Accountable Authority should seek to have this confirmed in writing by the complainant.

Under the Act, discretionary powers, functions, roles, duties and responsibilities of the Accountable Authority can be delegated to an official or officials at any point the Accountable Authority deems it necessary.

If the complaint is covered under the Act, a procurement may continue to proceed if a Public Interest Certificate (PIC) has been issued by the Accountable Authority of the relevant Commonwealth entity, stating that it is not in the public interest for the covered procurement to be suspended while the complaint is being investigated under section 18 of the Act. Where a written complaint has been received and a PIC has been issued, the relevant Commonwealth entity is required to publish the certificate on their website, and to notify affected suppliers in writing that a PIC is in force.

Complaints not covered by the ACT

Formal Complaints

Written complaints should be acknowledged by the procuring entity in writing, in line with the entities complaints handling procedures. The acknowledgement should include:

The official conducting the investigation should keep proper records of their decision-making and the basis for the decisions.

a summary of the complaint,
a reference to the entity’s complaints handling procedures, and
an indication of the timeframe for a formal response to the complaint.

The official conducting the investigation should keep proper records of their decision-making and the basis for the decisions.

Where a complainant is not satisfied that their complaint has been sufficiently addressed by the entity, the complainant may:

request an independent review by the entity on the procurement process, and/or
seek advice through other mechanisms such as the Procurement Coordinator, the Commonwealth Ombudsman or by taking legal action.

Independent internal review by the entity

Where a tenderer lodges a request for a further examination of a complaint, the entity should conduct an independent internal review of the procurement process. Where an entity elects to appoint an internal independent reviewer, they should:

not have been involved with the planning or delivery of the approach to market, evaluation process, contract award or administration of the relevant contract, and
be independent of direction from anyone who was involved in the procurement and contracting process, and
have access to all files and records relating to the tender process.

Depending on the circumstances or issues raised in a complaint, an entity may elect to engage an external probity auditor or advisor to undertake an independent internal review. This review should examine the procurement process to identify whether not it was conducted in accordance with the Commonwealth Procurement Rules and the request documentation.

Considerations for undertaking an independent review could include:

the circumstances of the complaint,
any statutory requirements, including if the complaint need to be referred or notified to a relevant government entity,
the issue/s complained about,
the parties involved,
the time that has elapsed since the alleged events occurred,
the significance of the issue for the complainant and/or the organisation (including whether the complaint indicates a systemic problem), and
the likely outcome.

It is important to note that the reconsideration of a procurement decision (or not) is at the procuring entities discretion and would depend on a range of factors including the circumstances and outcome of the review of the procurement process. Relevant factors in determining whether or not to re-consider the decision may include the broader context and implications for the procurement process; the fairness to the complainant and to other tenderers; and the objectives of the procurement. Where consideration is being given to the suspension, cessation or alteration of a procurement outcome, legal advice should be sought.

While it is rare that a review will result in a change to a tender outcome, where relevant issues are subsequently identified, entities should use the lessons learnt to improve entity procurement policies, guidance and processes as well as identify the training and professional development requirements of procuring officials.

Procurement Coordinator

The Procurement Coordinator is a function administered by the Department of Finance which assists the business community in matters relating to procurement activities conducted by the Australian Government. This includes a role in the handling of certain complaints.

The role of the Procurement Coordinator is to assess complaints about a procurement process and to determine whether they are consistent with Government policies, including the Commonwealth Procurement Rules. The Procurement Coordinator has no authority to compel an entity to reconsider the conduct or outcome of tender processes for which that entity is accountable. For further information, see the Procurement Coordinator webpage.

The Procurement Coordinator has no role in handling complaints made under the Government Procurement (Judicial Review) Act 2018.