Federal government report slams public procurement

An explosive federal report by the Joint Committee of Public Accounts and Audit has criticised wasteful Commonwealth procurement, with no-nonsense chair Julian Hill MP citing systemic problems that require major changes.

According to the eye-opening JCPAA report, procurement accounted for more than $80 billion in committed value in 2021-22, with the Government awarding more than 90,000 contracts to more than 12,000 businesses.

The top five suppliers, perhaps unsurprisingly according to the critical report, include major consulting firms Accenture, KPMG, Ernst & Young, PWC and Deloitte, securing nearly $2 billion in government contracts.

In four of the five reports by the Australian National Audit Office, which were considered in the inquiry, noncompliance with Commonwealth Procurement Rules (CPRs) was uncovered across the board.

Most notably, this spans consistent failures to demonstrate value for money, conduct procurements in line with ethical requirements or to keep adequate records, and substandard contract management.

In his highly critical Chair’s foreword, Hill blasted the Commonwealth saying it “has serious commitment issues” before emphatically adding “AusTender is no AusTinder and it needs reform.”

He later says “the guiding principle is that agencies should be able to demonstrate that they have achieved value for money for the taxpayer” adding that “in a time of rising prices and tightening budgets, the Australian public deserves no less.”

Amongst the committee recommendations, Hill says “panels have become an uncompetitive rort and it needs to stop” suggesting multiple quotes should be obtained, a separate value for money assessment must still be undertaken and panels should be refreshed more often.

Further recommendations assert that finance needs to exercise greater curatorial oversight on AusTender, the current procurement definition should be updated, and agencies still need to keep records and ensure value for money.

Meanwhile, the report outlines the need for all Commonwealth corporate entities to be subject to the CPRs, internal audit committees to increase their scrutiny of procurement controls, and finance to address the lack of procurement expertise and capability within the Australian Public Service.

Closing the recommendations, Hill says “finance needs to lead”, imploring them to “own it” and “have more clue what’s actually happening in the system”.

As Crikey’s Political Editor Bernard Keane puts it in his heated take on the report, “While the committee makes some excellent recommendations, it
doesn’t really get to grips with the core problem behind procurement in the APS: there are no consequences for bureaucrats and departments that waste taxpayer money on poor procurement.

“It’s the lack of capability to do it well at all; the lack of recognition that good procurement is a specific skill that the APS lacks almost completely.”

Meanwhile, former secretary Ian Watt noted in his evidence to the committee, “There’s no solution short of doing this systematically, across the board, for agencies as a whole. Unless that happens, I think you will be here for a long while to come, dealing with auditor-generals’ reports you’d rather not have”.