Commonwealth Government Procurement (Judicial Review) Bill 2017

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Commonwealth Government Procurement (Judicial Review) Bill 2017

Ichiban Commercial Solutions Procurement Advise and Tender Writing Government Procurement

COMMONWEALTH GOVERNMENT PROCUREMENT (JUDICIAL REVIEW) BILL 2017 – A PROCUREMENT VIEW

The Government Procurement (Judicial Review) Bill 2017 is currently making the rounds in parliament for review and enactment.

It is not an Act at this stage and has not been implemented yet.

The Finance and Public Administration Legislation Committee is currently reviewing the bill, with the next report die by 4 August 2017.

Our post provides a simple update on what the Bill is and more importantly provides a procurement perspective on the bill and its usefulness for suppliers.

The purpose of the Government Procurement Bill

The government procurement bill establishes an independent and impartial body that provides suppliers a formal process to:

  • firstly, raise complaints about government procurement processes and
  • secondly, potentially award compensation for poor procurement process.

Furthermore, the bill AIMS to ensure that regional and small and medium enterprises have “timely access to justice” to raise complaints about procurement processes and potentially be awarded compensation.

Australia aligns with the World Trade Organisation Agreement on Government Procurement and the Trans-Pacific Partnership Agreement.

Simply the Commonwealth is aiming to improve its standard of procurement and provide remedies in the event government procurement fails suppliers for what ever reason.

The bill also links with the updated Commonwealth Procurement Rules and the new economic benefit for the Australian economy test for procurement exceeding $4 million.

What is included in the Bill?

The Bill provides for a federal court of federal circuit court to make a ruling around a contravention of the relevant Commonwealth Procurement Rules and how it relates to a “covered procurement”.

However, a supplier must first make a written complaint to the procuring agency. As the first step a supplier has to work really hard to resolve the issue with the procuring agency directly.

Once a supplier makes a complaint, the accountable authority must:

  • investigate the complaint; and
  • potentially suspend the procurement.

What is important to note, is the 10 day period requirement.

Once a supplier becomes aware or reasonably should have become aware of an issue with a procurement process, then the supplier must commence the complaint process within a 10 day period.

One cannot do much in 10 days.

Not whilst trying to run a business too.

The Federal Court or the Federal Circuit Court may order the payment of compensation for a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a “covered procurement”).

It is important to note that:

“A contravention of the Commonwealth Procurement Rules does not affect the validity of a contract.

Covered Procurement

The Commonwealth Procurement Rules, the Explanatory Memorandum on the Government Procurement Bill covers the definition of  “covered procurement”.

The definition reads like any good piece of legislation, with many exceptions, caveats and exemptions.

The bill does not cover current or past  procurement process and only applies to Commonwealth procurement after enactment.

For now, keep an eye on the developments of the bill and take note if you are providing goods or services to the Commonwealth either direct or through a competitive tendering process.

From a procurement perspective what do I take away from this?

The Bill grants suppliers a second opportunity to complain about commonwealth procurement.

Good in theory, hard work in practice.

But it is a very complicated bill.  Whilst the legislature is AIMING to make the process available to regional and small and medium enterprise, the wording in the bill is certainly not aimed to make access easy.

For instance – consider the language of the bill. Not many small businesses know what an “injunction” is or what it takes to get an injunction.

Court cases take lots of money, thus only those businesses with deep pockets and resources to spare will have access.

And let us not forget the sneaky 10 day requirement.

Or the requirement to show that small business has done all it could to resolve the complaint with the procuring agency.

The bill refers to “procurement process“.  One will have to wait and see what rulings (oops, injunction!) the court or commonwealth agency makes to see how much the ruling will focus on process rather than quality of procurement decision making.

My frank view

The government procurement bill limits access to the lucky few.

In my opinion, procuring agencies get away without any added responsibility or accountability.

Too many hurdles to pass.

Business, big and small, will have to think very careful before they complain.  Because in a way this bill is similar to being a business whistleblower.

And ultimately , we do know how well government and business succeed in protecting whistleblowers … or not.

Once a supplier complains, what will the flow on effect be?

The timelines and requirements in the bill places all of the onus on the complaining business; not taking into consideration that business needs to continue running. A time consuming and costly exercise.

 And very cost prohibitive for small and medium business.

My suggestion – follow what happens but don’t hold your breath.

Unless you have deep pockets and lots of time and resources.

Learn more about the Commonwealth Government Procurement Bill 2017:

Contact Ichiban today to work with your procurement leaders, current and upcoming, to transform your  procurement team to raise the bar.  We health check your procurement team  and benchmark current performance, mentor procurement leaders and coach procurement teams.

For more information on our procurement leadership packages, click here.

Have a great day!

Celia Jordaan


About Celia:

Celia Jordaan has 21 years international and corporate experience and worked in the areas of procurement, tenders, supply chain, contract management, law and risk. She works with business, procurement leaders and teams to:

  • develop and implement strategies to boost business performance,
  • make tendering easy and
  • improve bottom line performance.

To learn more about Celia Jordaan, please click here.