Procurement Framework

2.1 The Commonwealth Procurement Rules (CPRs) are issued by the Minister for Finance (Finance Minister) under section 105B(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

2.2 Officials from non-corporate Commonwealth entities and prescribed corporate Commonwealth entities listed in section 30 of the Public Governance, Performance and Accountability Rule 2014 must comply with the CPRs when performing duties related to procurement. These entities will collectively be referred to as relevant entities throughout the CPRs.

2.3 Rules that must be complied with in undertaking procurement are denoted by the term ‘must’. Non-corporate Commonwealth entities must report non-compliance with the rules of the CPRs through the Commonwealth’s compliance reporting process. The term ‘should’ indicates good practice.

2.4 The CPRs are the core of the procurement framework, which also includes:

1. web-based guidance, developed by the Department of Finance (Finance) to assist entities to implement the procurement framework; and
2. Resource Management Guides, which advise of key changes and developments in the procurement framework; and
3. templates, such as the Commonwealth Contracting Suite, which simplify and streamline processes, creating uniformity across Commonwealth contracts to reduce the burden on businesses when contracting with the Commonwealth.

2.5 An Accountable Authority may use Accountable Authority Instructions to set out entity-specific operational rules to ensure compliance with the rules of the procurement framework.

2.6 These CPRs do not apply to the extent that an official applies measures determined by their Accountable Authority (or an official to whom the Accountable Authority delegates the power to determine such measures) to be necessary for the maintenance or restoration of international peace and security, to protect human health, for the protection of essential security interests, or to protect national treasures of artistic, historic or archaeological value.^1,2

Procurement

2.7 Procurement is the process of acquiring goods and services. It begins when a need has been identified and a decision has been made on the procurement requirement. Procurement continues through the processes of risk assessment, analysis of markets and their supply chains, seeking and evaluating alternative solutions and the awarding and reporting of a contract.

2.8 In addition to the acquisition of goods and services by a relevant entity for its own use, procurement includes the acquisition of goods and services on behalf of another relevant entity or a third party.

2.9 Procurement does not include:

1. grants (whether in the form of a contract, conditional gift or deed)³;
2. investments (or divestments);
3. sales by tender;
4. loans;
5. procurement of goods and services for resale or procurement of goods and services used in the production of goods for resale;
6. any property right not acquired through the expenditure of relevant money (for example, a right to pursue a legal claim for negligence);
7. statutory appointments;
8. appointments made by a minister using the executive power (for example, the appointment of a person to an advisory board);
9. the engagement of employees, such as under the Public Service Act 1999, the Parliamentary Services Act 1999, a relevant entity’s enabling legislation or the common law concept of employment; or
10. arrangements between non-corporate Commonwealth entities where no other suppliers were approached.

2.10 Following the awarding of the contract, the delivery of and payment for the goods and services and, where relevant, the ongoing management of the contract and consideration of disposal of goods, are important elements in achieving the objectives of the procurement.

Resource management framework

2.11 Relevant entities and officials operate in an environment of legislation and Commonwealth policy. Within that broad context, the Resource Management Framework consists of the legislation and policy governing the management of the Commonwealth’s resources. Figure 1 sets out the main elements of this environment related to procurement.

Figure 1: Legislation and policy

2.12 The procurement framework is a subset of the Resource Management Framework related to the procurement of goods and services.

2.13 Section 16 of the PGPA Act outlines an Accountable Authority's duty to establish appropriate internal control systems for their relevant entity. The CPRs provide the necessary framework for Accountable Authorities when issuing Accountable Authority Instructions and operational requirements in relation to procurement. In the area of procurement, an Accountable Authority should provide a mechanism to:

1. apply the principles and requirements of the resource management and procurement frameworks, focusing on the relevant entity's operations; and
2. provide primary operational instructions to relevant entity officials in carrying out their duties related to procurement, in a way that is tailored to a relevant entity's particular circumstances and needs.

2.14 Non-compliance with the requirements of the Resource Management Framework, including in relation to procurement, may attract a range of criminal, civil or administrative remedies including under the Public Service Act 1999 and the
Crimes Act 1914.

International obligations

2.15 Australia is party to a range of free trade arrangements. These arrangements are implemented domestically by legislation and/or Commonwealth policy. Relevant international obligations have been incorporated in these CPRs. Therefore, an official undertaking a procurement is not required to refer directly to international agreements.