Fed review of IT procurement rules delayed to 2012

The Department of Finance and Deregulation will not issue updated commonwealth procurement guidelines (CPG) for IT projects until early next year.

Among the many matters to be addressed by the new guidelines is the poor management of direct procurement deals.

The committee said it was "gravely concerned" about findings of a September 2010 Australian national audit office report on direct procurement, highlighting insufficient governance mechanisms; a lack of documentation; and the "possibility that value for money is not always being achieved".

The CPG guidelines were to be reworked by  July 1 this year, however a departmentmental spokesman said that it would likely to delayed until 2012.

“This better reflects the time required to consult with departments and agencies and other stakeholders and to enable any changes to the systems or processes of the 105 Financial Management and Accountability Act 1997 agencies covered by the commonwealth procurement guidelines,” he said.

New guidelines were anticipated in the report of the joint standing committee on public accounts and audit (JSCPAA) last week:

“Finance stated that it is undertaking a consultative process which aims to rework the CPGs by 1 July 2011. This involves: ... working on providing greater clarity around the commonwealth procurement guidelines and processes ... to ensure that we make those processes somewhat more transparent and easier to understand...”

Finance's spokesman said that although the rules regarding procurement may be revised, the underlying policy will remain the same.

“The review is looking at improving the 'workflow' of the content and simplifying the language where it is appropriate to do so," he said.

He added that direct procurement may be appropriate in some cases, as “it allows agencies to conduct procurements in a way commensurate with the associated cost, scope and risk of the procurement”.

For procurements worth at least $80,000, agencies could strike direct source deals only if they satisfied exemptions from the Mandatory Procurement Procedures, the spokesman noted.

But ensuring compliance and tracking the extent of direct sourcing was a matter for the agencies themselves, he said.

“Under the devolved financial framework, departments and agencies are responsible for ensuring compliance with their legislative obligations, including compliance with the Commonwealth Procurement Guidelines.” 

Information relating to the use of direct sourcing by agencies is publicly available on AusTender. 

Finance said it was aware of the tough new recommendations proposed in the JSCPAA's report such as mandatory training for all procurement offices and exploring sanctions for non-compliance.

"The timing of a response to the report is a decision for the Government," the spokesman said.