RESTRICTED
WORLD TRADE S/WPGR/W/11/Add.11
2January 1997
ORGANIZATION
(97-0112)
Working Party onGATS Rules Original: English
COMMUNICATION FROM AUSTRALIA
Response totheQuestionnaire onGovernment Procurement ofServices
Thefollowing communication isbeing circulated attherequest ofAustralia toMembers of
theWorking Party onGATS Rules.
_____________
I. EXISTING PROCUREMENT REGIMES
Definition
1. What isthedefinition ofgovernment procurement employed incompleting this
questionnaire?
Government procurement istheentire process bywhich government agencies acquire from
external sources theresources theyneed tocarry outtheir missions andadminister their
programs. Thisincludes:
- alltypes ofconsultancies andprofessional services;
- construction andrelated services;
- training forCommonwealth personnel;
- services procured forpublic utilities; and
- financial andoperating leasing including theleasing ofequipment andrealproperty,
aswell asoutright purchase.
Government procurement alsoincludes outsourcing orcontracting outforgoods orservices
thattypically havepreviously beenprovided frominternal sources. These services mayinvolve
program delivery suchasservices tolinesaswellasprogram support suchasoffice cleaning
orother property services.S/WPGR/W/11/Add.11
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Administrative structure
2. Howaregovernment procurement activities administered? Towhatextent areprocurement
activities centralized? Please specify theidentity ofanycentral procurement agencies and
theirrespective responsibilities.
Australia isafederation. Inaddition tothenational orCommonwealth Government, there
aresixState Governments andtwoCommonwealth Territory Governments. Thethird tier
ofgovernment islocalgovernment.
TheCommonwealth Government andeachoftheStateandTerritory Governments havetheir
ownprocurement legislation policies andprocedures. There isnonational regulation of
government procurement. TheCommonwealth, State andTerritory governments and
NewZealand are,however, parties totheGovernment Procurement Agreement (GPA) which
commits them to:
- remove discrimination among themselves ingovernment procurement; and
- work inacoordinated waytoimprove procurement practices andprocedures andto
introduce greater uniformity.
Theprincipal agency fortheimplementation ofthisintergovernmental agreement istheNational
Supply Group (NSG), abody ofsenior State, Territory Commonwealth andNewZealand
officialssetuptoconsiderbroadstrategyissuesrelatingtopublicsectorprocurementandsupply.
TheNSG isresponsible forreinforcing theobjectives oftheGPA including promoting
commonality inprocurement policies andpractices.
A. Commonwealth Government Procurement
(i) Administrative Structure
IntheCommonwealthgovernment,themanagementofprocurementissubstantiallydecentralised
witheachagency being responsible foritsownprocurement within acentrally prescribed
framework ofprocurement policy andadvisory guidance onbestpractices andtechniques.
Thisframework issetoutintheCommonwealth Procurement Guidelines issued bytheMinister
forAdministrative Services under theauthority oftheAudit Act1901andFinance Regulations.
Atpresent, there arethirteen ofthese Guidelines.
1. Getting Value forMoney
2. Open andEffective competition andGazettal ofPurchasing Information
3. Ethics andFairDealing
4. Planning Government Procurement
5. Using Staged Procurement
6. Using Specifications
7. Negotiation
8. Managing RiskinProcurement
9. Managing Performance
10. Benchmarks forProcurement DecisionsS/WPGR/W/11/Add.11
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11. Know Your Market
12. Australian andNewZealand Supplies
13. Contracting forConsultancy Services
TheGuidelines arecurrently being revised forreissue inanupdated andconsolidated form.
TheGovernment alsoexpects Government Business Enterprises (GBEs), unless specifically
exempted, tooperate inaccordance withtheGovernment 'sprocurement policies, butexcluding
therequirements concerning gazettal ofprocurement matters anduseofCommon Use
Arrangements (CUAs).
CUAs arestanding offers forInformation Technology andgeneral goods andservices arranged
byPurchasing Australia forcommon usesupplies tomeet theneeds ofallCommonwealth
agencies.
(ii) Central procurement entities
There areanumber ofentities intheCommonwealth Government with procurement
responsibilities andfunctions asdescribed below.
Department ofAdministrative Services
UndertheAdministrativeArrangementorders,theDepartmentofAdministrativeServices(DAS)
isresponsible forcoordination ofpurchasing policy andcivilpurchasing. Areas within DAS
thathavecentral procurement responsibilities include:
Purchasing Australia
Purchasing Australia administers theCommonwealth Government 'spurchasing anddisposals
framework andplays amajor roleincontributing toitsdevelopment inconjunction withother
governmentagencies.ItmanagesthedevelopmentoftheCommonwealthProcurementGuidelines
forissue bytheMinister forAdministrative Services.
Other services andsupport provided toCommonwealth buyers include:
- Common UseArrangements (CUAs): Purchasing Australia manages CUAs foruse
byother agencies. These cover thesupply ofInformation Technology (IT)andother
commonly usedgoods andservices;
- Office ofGovernment Information andAdvertising (OGIA); OGIA provides advice
andassistance onadvertising, market research, public relations, strategic planning,
marketing,governmentinformationpolicyandthecontentandappropriatenessofprinted
material forpublic use.Itmanages thecentralised arrangements forCommonwealth
advertising;
- surplus assetdisposal;
- assistance withcontracting;
- facilitating theimplementation ofelectronic commerce inCommonwealth purchasing;
- buyer training andinitiatives toimprove thequality andavailability oftraining; and
- publications andother advisory material onprocurement matters.
Purchasing Australia alsoprovides support tothegeneral supplier community through the
following mechanisms:S/WPGR/W/11/Add.11
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- ASupplier Development Program, which assists small tomedium enterprises toaccess
theCommonwealthmarketplacebylinkingsupplierswithbuyers,providinginformation
andfacilitating skillsdevelopment. Theprogram includes MeettheBuyers Trade Fairs,
which provide anopportunity forsuppliers andgovernment buyers tomeetandopen
communication channels, andinformation andpublications toassist suppliers indealing
withtheGovernment, e.g.theGuide totheGovernment Marketplace ,and
- Government Electronic Marketplace Service (GEMS), which provides information
throughtheInternetaboutcurrentCommonwealthandNewZealandGovernmentrequest
fortenders, dates forgovernment auctions ofsurplus goods, arange ofmaterial about
Australian government purchasing policies andspecial purchasing opportunities.
Public Works Policy Group
ThePublic Works Policy Group (PWPG) provides assistance toagencies intheapplication
ofrelevant public works policies. ThePWPG promotes theimplementation byagencies of
bestpractice intheprocurement ofconstruction andrelated services, andfacilitates on-going
development ofbestpractice strategies.
ThePWPG comprises anAdvisory Committee, chaired bytheSecretary ofDAS, withspecial
expertise drawn from government agencies, theconstruction industry andtrade unions, and
asecretariat within theCanberra office ofDAS.
Other Central Procurement Bodies
National Procurement Board
TheNational Procurement Board (NPD) monitors, reviews andreport ontheefficiency and
effectiveness oftheGovernment 'sbuying framework andplays akeyroleinensuring thatthe
Government 'spolicies arecarried outbyallagencies.
TheNPBhasanindependent chairman andmembership drawn fromindustry sectors, unions
andgovernment departments. Itisserved byaSecretariat located intheDepartment of
Administrative Services inCanberra.
B. State andTerritory Procurement Structures
InformationontheadministrativestructureofindividualStateandTerritoryprocurementregimes
isnotavailable. However, thefollowing listidentifies thecentral procurement organizations
within State andTerritory Governments.
NewSouth Wales: TheState Contracts Control Board established under thePublic Sector
Management (Stores andServices) Act1988hasresponsibility fortheregulation ofNewSouth
Wales Government Procurement activity.
South Australia: TheState Supply Board isresponsible forprocurement administration in
South Australia.
Western Australia: Under theStateSupply Commission Act1991theStateSupply Commission
hasresponsibility fortheconduct ofthesupply process across thewhole ofgovernment.S/WPGR/W/11/Add.11
Page5
Queensland:TheQueenslandStatePurchasingCouncilhasresponsibilityfortheadministration
ofgovernment procurement within theState.
Victoria: TheVictorian Government Purchasing Board isresponsible fortheadministration
ofgovernment procurement within theState.
Tasmania:TheStatePurchasingandSalesDivisionintheDepartmentofTreasuryandFinance,
hasresponsibility fortheadministration ofgovernment procurement within theState.
Northern Territory :TheDepartment ofAsian Relations, Trade andIndustry hasresponsibility
fortheadministration ofgovernment procurement within theNorthern Territory.
ACT Government: TheACT Supply andTender Agency hasresponsibility forgovernment
supply (purchasing) policy within theAustralian Capital Territory.
Laws andregulations inforce
3.(a) Please specify thelaws, regulations, rules, guidelines, decrees, decisions andother measures
governing government procurement. What isthescope oftheirapplication? Inparticular,
please describe anyexemptions thatexist. Please provide abrief summary ofthecontent
ofeachofthese measures.
General
TheGovernment Procurement Agreement 1986, isanadministrative agreement towhich all
Australian States andNewZealand aresignatories. Itprohibits theparties totheAgreement
fromapplying preference schemes against eachother. Italsoprohibits forms ofdiscrimination
between theparties totheAgreement based ontheState oforigin ofgoods andservices in
government procurement. TheAgreement iscurrently under review.
A. Commonwealth Laws andRegulations
Primary legislation relating toCommonwealth Government procurement istheAudit Act1901,
Finance Regulations made under theAudit Actsettheregulatory framework forprocurement.
TheRegulations require thatthose agencies involved inprocurement:
- haveregard toCommonwealth Procurement Guidelines issued bytheMinister for
Administrative Services;
- choose procurement methods thatwillpromote openandeffective competition;
- provide forthenotification ofcontracts arranged andstanding offers above $2,000
invalue intheCommonwealth (Purchasing andDisposals) Gazette; and
- notenter intoprocurement commitments unless satisfied thattheycould notobtain
better value formoney fortheCommonwealth.S/WPGR/W/11/Add.11
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Legislation/regulations thatgiveexemption tothenormal government procurement
regulation practices
TheFinance Regulations provide thattheSecretary totheDepartment thatisresponsible for
procurement ofsupplies may, inwriting, direct thatdetails ofcontracts orstanding offers that
(inhisorheropinion) areexempt matters under theFreedom ofInformation Act,1982 are
nottobepublished intheCommonwealth (Purchasing andDisposals) Gazette.
(b) Does theprocurement regime distinguish between theprocurement ofgoods andservices?
Ifso,thenhowistheapplication ofrulesdetermined incases ofjointprocurement involving
bothgoods andservices?
There arenoseparate regulations fortheprocurement ofgoods asopposed toservices in
Commonwealth government procurement.
B. State andTerritory Laws andRegulations
Generally, StateandTerritory lawsandregulations require competitive procurement practices,
value formoney andtransparency ingovernment procurement. Theuseofpublic tendering
processes isrequired forprocurements above certain thresholds. (Seesection 5B).
Thefollowing lawsandregulations apply tospecific Australian StateandTerritory procurement
regimes:
NewSouth Wales: Thelegislation governing NewSouth Wales Statepurchasing isthePublic
Sector Management (Stores andServices) Act1988.
South Australia: Thelegislation governing South Australian government purchasing isthe
State Supply Act1985.
WesternAustralia:ThelegislationgoverningWesternAustralianStategovernmentprocurement
istheState Supply Commission Act1991.
Queensland: Thelegislation governing Queensland State government procurement isthe
Financial Administration andAudit Act.Compliance withStatepurchasing policy isrequired
bythePublic Finance Standards issued under theAct.
Victoria: Thelegislation governing Victorian Stategovernment procurement istheFinancial
Management (Amendment) Act1994.
Tasmania: Thelegislation governing Tasmanian Stategovernment procurement activities is
theFinancial Management andAudit Act.
Northern Territory :Thelegislation covering Northern Territory government procurement
istheFinancial Administration andAudit Act.
ACTGovernment:ThelegislationgoverninggovernmentprocurementintheAustralianCapital
Territory istheAustralian Capital Territory Audit Ordinance 1989.S/WPGR/W/11/Add.11
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Distinction Between theProcurement ofGoods andServices
Wearenotaware ofanyseparate regulations fortheprocurement ofgoods asopposed to
services inState andTerritory government procurement.
However, themonetary preferences applying inState andTerritory purchasing assetoutin
theGovernment Procurement Agreement apply onlytogoods andrelated services andthus
donotapply toprocurement ofservices alone (seeSection 9B).
Procurement procedures applied
A. Commonwealth Procurement Procedures
4.(a) What procedures arefollowed intheprocurement process?
Commonwealthgovernmentprocurementpolicyemphasisestheachievementofvalueformoney
through open andeffective competition, ethics andfairdealing, accountability andsupport
forother government policies including industry development.
Procurement practices andprocedures aredirected toachieving thebestavailable value for
money intheacquisition ofgoods andservices forgovernment programs onthebasis ofa
comparison ofrelevant benefits andcostviewed from awhole oflifeperspective.
OpenandeffectivecompetitionisthecentraloperatingprincipleofCommonwealthprocurement,
permittingarangeofprocurementmethods.Itrequirestransparencyintheprocurementprocess,
including access toopportunities forpotential suppliers andeaseofentry fornewandsmall
sellers.
Thegeneral guidance provided toagencies enables them tochoose open, limited orselective
procurement procedures. TheCommonwealth doesnotprescribe theprocurement method
tobeusednordoesitsetminimum limits onthenumbers ofoffers tobesought. Requirements
andmarket conditions varyandtheperson responsible fordeciding howsupplies aretobe
procured must consider eachcaseonitsmerits.
Thisdecision should takeintoaccount boththecharacteristics oftherequirement andthe
particular market atthetime. Aconsideration ofthese factors willdetermine whether:
- public (oropen) notification isjustified;
- effective competition canbeachieved through confining (orlimiting) invitations to
known orqualified/approved suppliers; or
- market factors require single tendering orasimilar approach.
(b) Under whatcircumstances aredifferent procedures used? Forinstance, ifthemethod used
depends onthevalue oftheprocurement, thethresholds should begiven.
Ingeneral, therearenothreshold values fortheapplication ofparticular procurement techniques
orpolicies,However,procurementsover$100,000incostorofspecialcomplexityorsensitivity
aretobehandled byAccredited Purchasing Units inagencies toensure thatprocurement staff
havethenecessary levels ofcompetence.S/WPGR/W/11/Add.11
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(c) What arethetimelimits forsubmission ofbids?
There isnogeneral Commonwealth policy stipulating timelimits forthesubmission oftenders.
Decisions onthisissue areatthediscretion ofindividual government agencies.
B. State andTerritory Procurement Procedures
State andTerritory procurement procedures generally follow those oftheCommonwealth
government inemphasising theachievement ofvalue formany through open andeffective
competition, ethics andfairdealing andaccountability. However, theytendtobemore
prescriptive inrelation toprocess. AllStateandTerritory procurement regimes retain public
tender thresholds assetoutinsection 5Bbelow.
There isnouniform timelimit forthesubmission oftenders across State andTerritory
procurement regimes. Time limits areordinarily lefttothediscretion ofindividual agencies
butarebased onaninformed assessment ofthenecessary timerequired fortenderers torespond
toanyindividual tender inviewofthedegree ofcomplexity involved.
Publicity forinviting tenders
5.(a) How areintended procurements publicised? Areinvitations totender published? Ifso,
where, andinwhat languages?
Gazettal Requirements
TheCommonwealth (Purchasing andDisposals) Gazette mustbeusedtoadvertise allpublicly
available procurement opportunities including, butnotlimited to,expressions ofinterest,
invitations tobid,toqualify asapproved suppliers, tooffer proposals orthelike.
Inaddition tomeeting thegazettal requirements, agencies mayadvertise inother media, for
example thetender columns ofnewspapers ortrade magazines. They must usethe
Commonwealth 'scentralised advertising arrangements, thatisarrange advertisements through
theCommonwealth 'sdesignated advertising agent.
Allgazetted invitations arealsoplaced ontheGovernment Electronic Marketplace Service
(GEMS) bytheAustralian Government Publishing Service (AGPS).
English isthelanguage usedinthese media.
Gazettal ofopportunities isnotrequired wherever thedecision istoconfine anapproach, for
example, toasolesource, alimited fieldofsuppliers ortoalistofapproved suppliers
established following apublicly notified selection process.
Therequirement tousetheCommonwealth (Purchasing andDisposals) Gazette doesnotapply
toGovernment Business Enterprises andother agencies notoperating ontheCommonwealth
Public Account.S/WPGR/W/11/Add.11
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(b) Dotheextent andformofpublicity differ according totendering procedures applied and/or
onthevalue ofprocurement?
There isnofinancial threshold fortheadvertisement ofCommonwealth government requests
fortenders. Thedetermining factor isthedecision toapproach thepublic atlarge.
(c) What details oftheintended procurement arenormally published? Isthere aminimum set
ofinformation thatisrequired tobepublished? Ifso,please specify.
Details ofprocurement opportunities tobepublished intheCommonwealth (Purchasing and
Disposals) Gazette include:
Portfolio
Department oragency
Branch
Reference Number
General Description ofRequirements
P&SCode (Product andService Classification)
Document Centre from where relevant documentation and/or project information is
available
Commercial Inquiries (contact name andtelephone)
Technical Inquiries (contact name andtelephone)
Closing Date
(d) Arethere anycharges forobtaining thefullsetoftender documents? Ifso,please specify
anddescribe howthese charges areset?
Generally, tender documents arefreeofcharge. Anydecision tocharge, andtheamount
charged, fortender documents isatthediscretion ofindividual government agencies. Where
charges areimposed these aremainly intended tocover basic costsinvolved inpreparing and
distributing tender documents.
(e) Areelectronic means usedtoadvertise procurement opportunities? What isthenature of
systems thatareinplace? Aredifferent tendering provisions applied tocontracts advertised
inthismanner? Ifso,please describe.
Allopportunities notified intheCommonwealth (Purchasing andDisposals) Gazette arealso
placed ontheGovernment Electronic Marketplace Service (GEMS). GEMS isanelectronic
information service which provides information through theInternet about current
Commonwealth andNew Zealand Government requests fortenders, dates forgovernment
auctions ofsurplus goods, arange ofmaterial about Australian government purchasing policies
andspecial purchasing opportunities. Itsaddress is:http://www.gems.gov.au.
GEMS alsoprovides sample information about government contracts awarded tohelpsuppliers
withmarket research. Links toState Government tenders arealsobeing developed.
GEMS provides links toState andTerritory electronic services available ontheInternet.
Allenquiries regarding theGEMS service canbemailed togems@das.gov.au.S/WPGR/W/11/Add.11
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B. State andTerritory Governments
Thefollowing rulesapply totheadvertisement ofprocurement opportunities within Australian
State andTerritory jurisdictions:
NewSouth Wales :Allgovernment tenders above athreshold of$50,000 areadvertised in
thelocalmedia. Therelevant publication istheSydney Morning Herald .
South Australia: Allgovernment tenders above athreshold of$10,000 forgovernment
agencies, and$20,000 forgovernment instrumentalities, areadvertised inthelocal media.
Therelevant publication istheAdelaide Advertiser .
Western Australia :Public tenders arecalled where theestimated value ofthegoods orservices
exceeds $50,000. Allgovernment tenders overathreshold of$50,000 areadvertised. As
aminimum, public tenders aretobeadvertised intheappropriate section ofanewspaper with
statewidecirculation (theWestAustralian newspaper).
Queensland :Allgovernment tenders overathreshold of$100,000 areadvertised inthe
Queensland Government Procurement Gazette .
Victoria: Allgovernment tenders overathreshold of$50,000 areadvertised inthelocalmedia.
Therelevant publications areTheAgeandTheHerald Sun.
Tasmania :Allgovernment tenders overathreshold of$50,000 areadvertised inlocalmedia.
Therelevant publications forgazettal areTheMercury andTheExaminer .Where appropriate,
tenders arealsoadvertised inthenational newspapers.
Northern Territory :Allgovernment tenders overathreshold of$10,000 mustbegazetted.
Therelevant publication istheNorthern Territory Government Gazette .
ACT Government :Allgovernment tenders overathreshold of$50,000 arepublished inthe
localnewspaper, TheCanberra Times .
Publication inElectronic Media
Thefollowing services areprovided byState/Territory procurement regimes forthepublication
ofprocurement opportunities through electronic media:
TheACT Government publishes procurement opportunities through itslocalelectronic media
system, BASIS. BASIS isanon-line tender supply program which linkspurchasing officers
withcompanies fromtheACT andthesouthern NewSouth Wales region. Thissystem isnot
linked withtheInternet.
TheVictorian Government publishes some procurement opportunities onitsinternet site,
Tenders onLine. Therelevant internet address is:http://www.vicnet.net.au/tenders/
General information about Victorian State procurement canbeobtained from theVictorian
Government Procurement Board internet site: http://www.vgpb.vic.gov.au
TheNewSouth Wales Government publishes procurement opportunities onitsinternet site,
NSW Government Business Opportunities. The relevant internet address is:
http://www.dpws.nsw.gov.au/tenders/S/WPGR/W/11/Add.11
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Asnoted inSection 5A,theGEMS system provides linkstoanyrelevant StateandTerritory
services available ontheInternet.
Requirements laiddown forpossible suppliers
A. Commonwealth Procurement
6.(a) Arethere registration, residence orother requirements forpotential suppliers?
TheCommonwealth government hasnoregistration orresidential requirements forpotential
suppliers.
However, theCommonwealth hasputinplaceanEndorsed Supplier Arrangement under which
onlythose suppliers whocandemonstrate acommitment toworld bestpractice interms of
qualitystandardsandservice,andlongtermvalueaddingactivitiesinAustraliaandNewZealand
areeligible tosupply information technology andmajor office machine products under common
usearrangements.
(b) What isthenature ofanyconditions forparticipation required from suppliers -such as
financial guarantees, commercial standing andtechnical qualifications? Dotheconditions
ofparticipation varyaccording tothenature ofthetender process and/or thevalue ofthe
intended procurement?
Alldomestic suppliers employing more thanonehundred people must comply withthe
Affirmative Action (Equal Employment Opportunity forWomen) Act,1986.
Within thebroad parameters ofopenandeffective competition, buyers mustbesatisfied that
thesupplier selected willdeliver thebestavailable value formoney. Simple procurements
form reputable, established suppliers would notrequire anassessment oftheircapabilities.
Adetailed assessment mayberequired, however, when buying from unknown suppliers or
suppliers ofcomplex andhigh-cost goods andservices. Theservices ofin-house financial
andtechnical experts oraspecialist organisation maybeutilized inthesecircumstances toassist
withsupplier assessment.
Conditions ofassessment varyaccording tothenature oftherequirement andatthediscretion
ofthebuying agency. However, thegeneral aimsofsupplier assessment areasfollows:
- todetermine thecapability ofsuppliers tomeetthespecified requirements including
technical competence, available capacity, relevant experience, availability ofkey
personnel, financial stability, management competence;
- toidentify potential riskstotheachievement oftheprimary procurement objectives;
- toacquire satisfactory evidence ofoverall performance andreliability inundertaking
similar projects ineither theprivate orpublic sectors;
- toevaluate therelative strengths andweaknesses ofdifferent suppliers aspartofthe
bidevaluation process;
- toidentify areas requiring special attention byagencies inmanaging theprocurement
project including, forexample, ANZ industry development where appropriate; andS/WPGR/W/11/Add.11
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- toidentify forindividual suppliers keyissues andpriorities which mustbeaddressed
innegotiating andmanaging thecontract.
Financial Guarantees
Financial guarantees aregenerally setatthediscretion ofindividual Commonwealth government
agencies. Theyinclude bankguarantees andretention sumswhich arenormally sought tosecure
thetimely performance ofthecontractor.
(c) Dothere existlistsofapproved suppliers? Ifso,what aretheprocedures forchecking the
capability offirms applying forinclusion ontenderers 'mailing lists? Arelistsofapproved
suppliers, ifany,regularly reviewed/updated?
TheCommonwealth government hasputinplace thefollowing general arrangements which
actasapproved supplier lists:
- CommonUseArrangements(CUAs)whicharestandingofferswithcompaniestosupply
goods andservices based onpre-negotiated terms andconditions andatagreed prices.
Issues suchastrade terms, delivery arrangements, discount schedules andallother
contract details areagreed prior tosuppliers being added tothecontracts.
Commonwealth CUAs cover mostrequirements forrecurring needs across departments
andarecontinually monitored toensure thatsuppliers meetrequired standards.
- AnEndorsed Supplier Arrangement forpurchases ofinformation technology andmajor
officemachineswhichrecognisessupplierswhocandemonstrateacommitmenttoworld
bestpractice interms ofquality, standards andservice, andlong-term value-adding
inAustralia andNewZealand. Onlyendorsed suppliers cansupply ITandmajor office
machine products togovernment agencies under CUAs. ThelistofEndorsed Suppliers
isreviewed biennially.
B. State andTerritory Procurement
StateandTerritory procurement regimes generally follow Commonwealth procurement practice
inemphasising openandeffective competition asthecentral principle governing theselection
ofsuppliers.
SomepreferencemarginsapplyinState/Territoryprocurement.Theseareoutlinedinsection9B.
Criteria forassessing bidsandawarding contracts
A. Commonwealth Procurement
7.(a) What criteria aretaken intoaccount intheaward oftenders? Arecriteria foraward of
contracts made available inadvance topotential suppliers?
Obtaining value formoney toGovernment isthecentral principle guiding Commonwealth
procurement. There arenocentrally prescribed contract award criteria. Agencies mustdecide
theircriteria forindividual procurements incontext. However, general guidance isprovided
onvalue formoney.S/WPGR/W/11/Add.11
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Forevery procurement, Commonwealth agencies:
- evaluate thesuppliers whohavemade offers;
- evaluate eachofferseeking clarification fromthebidder where necessary byapplying
onlytheevaluation criteria notified tobidders; and
- identify thebidwhich represents bestavailable value formoney.
Thedetermination ofrelative value formoney includes:
- establishing orverifying thecompetence, viability andcapability oftheprospective
suppliers;
- confirmingthatthesuppliesofferedcomplywithspecifiedrequirementsincludingfitness
forpurpose anddelivery;
- taking account ofthebenefits andcosts involved onawhole oflifebasis;
- assessing andallowing forrelevant risks; and
- ensuring avoidance ofunnecessary costs.
Evaluation mustbeseentobecompetent, fairandunbiased andCommonwealth buyers must
maintain confidentiality andprobity throughout theevaluation process.
(b) Isprocurement subject toanyoffset provisions, suchaslocal content, technology transfer
orcountertrade requirements?
There arenolocal content requirements orpreferences forlocal suppliers ingeneral
procurement.However,agenciesarerequiredtoinvestigateAustralianandNewZealand(ANZ)
industry capability andprovide fairopportunity forsuppliers tocompete.
TheGovernment doeshavesome industry development programs. These include theCivil
Offsets Agreement andthePartnerships forDevelopment Program asoutlined below.
TheCommonwealth andStates/Territories became signatories totheAustralian Civil Offset
Agreementin1988.Theagreement'sobjectiveistocontributetotheenhancementofAustralia's
industrial andtechnological development byestablishing internationally competitive industries
inAustralia. TheAgreement states apreference forlongtermoffsets programs which are
notlinked directly toanysingle Government purchase butwhich provide maximum benefits
tolocalindustry.
TheCommonwealth abolished itsciviloffsets policy in1992andtheStates/Territories, while
maintaining signatory status totheagreement, onlyoccasionally apply offsets. Theagreement
islargely inactive although itcontinues toprovide aframework forthose States thatcontinue
tooperate offsets programs. Italsoserves astheumbrella agreement forthePartnerships for
DevelopmentProgram(PfD)intheinternationalinformationtechnologyandtelecommunications
(IT&T)sector.S/WPGR/W/11/Add.11
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ThePfDprogram andtheFixed Term Arrangements (FTA), encourages IT&Tcompanies
operating inAustralia tomake useofAustralian skills andresources. Partners areencouraged
toexpand theiroperation byundertaking industry development activities inAustralia thatare
longterm, strategic tothepartnership andmake sound commercial sense. Companies are
encouraged toseekoutAustralian products, services andskills withinternational prospects
andmutually beneficial returns.
Companies withannual IT&TsalestoAustralian governments over$40Mperannum are
invitedtosignaPartnershipsforDevelopment(PfD)agreement.Firmswithlessthan$40Mper
annum which wishtohavetheircommitment toindustry recognized, canenter intoaFTA.
Bothprograms areopentoAustralian andoverseas companies.
Companies whohaveentered thePfD/FTA program andareperforming satisfactorily against
theiragreement willbeconsidered ashaving demonstrated acommitment toinvestment and
growth intheir Australian activities. Activities andinvestments volunteered byPartner
companies should beintegral toglobal corporate strategies. Activities recognized under R&D,
export, export facilitation, technology transfer, training, strategic investment andventure capital
investment. Theprogram alsorecognizes investment inestablishing aregional headquarters
inAustralia, andtheexport ofregional headquarters services, asanindustry development
activity.
(c) Ispreference given toanyparticular enterprises orgroup ofenterprises? Ifso,please specify.
There arenopreferences given toanyparticular enterprises orgroups ofenterprises.
(d) Dotheprocurement criteria differ according tosector orregion oftheeconomy?
Asnoted inSection Bbelow, some differences apply withrespect tolocalpreference margins
associated withState andTerritory procurement. These preference margins areoutlined in
Section 9Bbelow.
(e) What isthemargin ofchoice ordiscretion allowed tothepurchasing authority? What does
theextent, ifany,ofdiscretion allowed depend upon?
Asnoted inSection 1above, themanagement ofCommonwealth procurement issubstantially
decentralised. Eachagency hasthediscretion tomange itsownprocurement programs within
acentrally prescribed framework ofprocurement policy andadvisory/guidance onbestpractices
andtechniques.
B. State andTerritory Government Procurement
State andTerritory Governments have their ownprocurement legislation, policies and
procedures. Generally speaking, these correspond withtheCommonwealth intheiremphasis
onobtaining value formoney togovernment through openandeffective competition. However,
some differences apply withrespect tolocal preference margins associated withState and
Territory procurement. (Seesection 9B).S/WPGR/W/11/Add.11
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Disclosure ofbidsreceived andcontracts awarded
A. Commonwealth Procurement Procedures
8.(a) How aretenders received, registered andopened?
Offers received aretreated ascommercial inconfidence withinformation restricted onaneed-to-
know basis. Alloffers must bekeptsecure andsealed untilthedesignated opening time.
Commonwealthagenciesarerequiredtohaveproceduresinplaceforreceiving,storing,opening,
registering, handling andfiling offers.
Latesubmission ofoffers isnotnormally admissible. There isgreater scope forflexibility
inthetreatment ofregistrations ofinterest andlikematerial where therisks arising from a
latesubmission arenotasserious asforalatetender orquotation.
Government buyers arenotpermitted tocanvass offers aftertheclosing datefrom suppliers
whohavenotsubmitted bids.
(b) Areentities required topublish details ofthecontracts awarded and/or notify unsuccessful
tenderers?
Commonwealth agencies rerequired tonotify inthePurchasing andDisposals Gazette details
ofanycontract arranged forsupplies tobeprocured orusedinAustralia where thetotal
estimated liability is$2000 ormore, andstanding offers.
Contracts arranged caninclude anycommitment forsupplies arranged, forexample anoral
orwritten contract, lease, corporate credit cardtransaction orpurchase order. Thisincludes
procurements against anystanding offertosupply arrangement suchasservice orders, period
orders andnational orotherwise approved supply agreements forcommon usesupplies, as
wellasperiod contracts, service contracts andmaintenance agreements.
Theprocurement information provided includes:
Portfolio
Department oragency
Branch
Purchase Reference
Description ofSupplies
Value ($A)
Period Contract (ifapplicable)
Contractor (Supplier)
P&SCode (Product andService classification)
(c) Areentities required topublish, orprovide tounsuccessful bidders, pertinent reasons why
theirbidwasrejected?
Allsuppliers whomake anoffer areentitled toadebriefing.
Typically thedebriefing covers thereasons whytheunsuccessful bidders werenotselected.
Debriefings mayalsoassist suppliers whohavewonCommonwealth contracts previously and
wanttoknow howtheyperformed against theevaluation criteria soastocontinue toenhance
theirperformance.S/WPGR/W/11/Add.11
Page16
B. State andTerritory Procurement Procedures
Generally speaking, State andTerritory procurement procedures forthetreatment ofoffers
correspond withthoseoftheCommonwealth noted above. However, somedifferences doapply,
particularly inrelation tothepractices adopted intheopening oftenders insome States.
Receipt ofOffers
Offers received must betreated ascommercial inconfidence withinformation restricted on
aneed-to-know-basis.
Offers mustbekeptsecure andsealed untilthedesignated opening time. StateandTerritory
procurement agencies haveprocedures inplace forreceiving, storing, opening, registering,
handling andfiling offers.
Latesubmission ofoffers isnotnormally admissible. Government buyers arenotpermitted
tocanvass offers aftertheclosing datefrom suppliers whohavenotsubmitted bids.
Opening ofTenders
Theparticular approach adopted inopening tenders isatthediscretion ofindividual Stateand
Territory procurement agencies. However, normal procedure istoconvene aTender Opening
Committeeconsistingofnotlessthantwomemberswhichundertakestheopeningandscheduling
process inasecure office. Thepublic opening oftenders issometimes practised inthecase
ofhigher value tenders.
Notification ofTender Outcomes
Standard procedure forState andTerritory governments istoformally notify successful
tenderers. However, themethod fornotification ofoutcomes tounsuccessful tenderers varies.
Alternative modes ofnotification usedbyStateandTerritory governments include theplacing
ofadvertisements inthelocal media forcontracts above aspecified threshold, and/or the
placementoftenderoutcomesonpublicnoticeboardswithinState/Territoryprocurementoffices.
Debriefing Requirements
Normal practice isforprocurement regimes toprovide debriefings tounsuccessful tenderers
onrequest. Thedebriefing typically covers thespecific reasons whyatender wasunsuccessful.
Treatment granted todomestic andforeign services and/or suppliers
9. What laws, regulations, procedures orpractices accord domestic services and/or suppliers
treatment more favourable thanthataccorded toforeign services and/or suppliers, oraccord
services and/or suppliers ofaMember more favourable treatment thanthose ofanother
Member? Please specify how, ifatall,more favourable treatment isaccorded. Please also
specify theworking definition of"domestic" inrelation todomestic services andsuppliers.S/WPGR/W/11/Add.11
Page17
A. Commonwealth Procurement
OpenandeffectivecompetitionisthecentraloperatingprincipleofCommonwealthprocurement.
There arenolocal content requirements orpreferences fordomestic suppliers ingeneral
procurement which would accord domestic services and/or suppliers treatment morefavourable
thanthataccorded toforeign services and/or suppliers, oraccord services and/or suppliers
ofaMember more favourable treatment thanthose ofanother Member.
B. State andTerritory Procurement
PreferencemarginsapplyinAustralianState/Territoryprocurementwhereoneormoresuppliers
claim Australian orNewZealand (ANZ) content. These preference margins areapplied by
wayofasurcharge onthenon-ANZ portion ofthetender.
Thefollowing preference margins areapplied within individual States andTerritories:
NewSouth Wales Aninternal preference policy ranging from 2.5-5%
applies when anoffer ortender hasbeenreceived
from aspecified NSW region andthepreferred
tenderer would havebeenfrom metropolitan NSW or
overseas (except NewZealand).
A20%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
South Australia A20%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
Western Australia A10%preference margin applies togoods
manufactured inWAregional areas asagainst the
Metropolitan Statistical region uptoamaximum of
$100,000.
A10%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
Victoria Nil
Queensland A20%industry development clause applies in
information technology contracts. TheQueensland
Government advises thatthisoffset applies toall
bidders, regardless oftheirState oforigin andisnota
preference margin assuch.
A20%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
Tasmania A10%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
Northern Territory A10%preference margin applies where oneormore
suppliers claim Australian orNewZealand content.
ACT Government NilS/WPGR/W/11/Add.11
Page18
Procedures forhearing andreviewing complaints/appeals
10. What, ifany, aretheprocedures available forparties, domestic andforeign, tolodge
complaints against theaward ofacontract? Please provide details.
There isnospecial Commonwealth-wide system fordealing withprocurement complaints or
providing remedies forcomplainants. There are,however, anumber ofavenues ofcomplaint
available.
General Complaints
Suppliers whocomplain about procurement processes ordecisions areentitled toreceive a
fairhearing fromagencies. Agencies should accept complaints inthenormal course ofevents
inaccordance withwhatever procedures theyhaveinplace forhandling complaints ingeneral.
Often buyers andsuppliers canresolve them attheworking level.
Anysupplier maycomplain totheCommonwealth Ombudsman concerning actions ordecisions
byabuying agency which thesupplier considers tobewrong, unjust, unlawful, discriminatory
orunfair. IftheOmbudsman findsacomplaint tobejustified, theOmbudsman mayrecommend
aremedy, suchas:
- anapology
- areconsideration oforchanges toadecision
- changes toagency rules orprocedures
- compensation forlosses ordamages caused bytheagency 'sdecision oraction, or
- changes tothelawthatcaused theproblem.
Agencies arenotcompelled toaccept arecommended remedy, butiftheagency doesnotact
upontherecommendations adequately, theOmbudsman mayreport tothePrime Minister and
thentoParliament.
Complaints totheDesignated Body
Under theterms oftheGovernment Procurement Agreement (GPA), asupplier maycomplain
totheDesignated Body about alleged breaches oftheGPA byCommonwealth bodies. (The
DepartmentofAdministrativeServices(DAS)iscurrentlytheDesignatedBodyforthispurpose).
Theprincipal review provisions oftheGPArequire thattheparties provide non-discriminatory
access totheir procurement forAustralian andNew Zealand suppliers andproducts, and
maximise thecompetitive opportunities available tothem.
IftheDesignated Body cannot resolve thecomplaint satisfactorily, itwillbereferred tothe
National Supply Group (NSG). IftheNSG cannot resolve thecomplaint, itmayreferitfor
ministerial consideration. There isnorequirement thataprocurement process besuspended
asaresult ofacomplaint.
B. State andTerritory Procedures
Suppliers mayaddress complaints about individual government procurement decisions to
State/Territory procurement agencies where theyconsider theyhaveagrievance. Where a
supplier isnotsatisfied withtheagency 'sresponse, thecomplaint maybereferred totherelevant
State/Territory Government Minister.S/WPGR/W/11/Add.11
Page19
AsuppliermayalsocomplaintotheState/TerritoryOmbudsmanconcerningactionsordecisions
byaGovernment agency which thesupplier considers tobewrong, unjust, unlawful,
discriminatory orunfair. TheState/Territory Ombudsman 'spowers aregenerally thesame
asthose exercised bytheCommonwealth Ombudsman.
II. MEMBERSHIP OFPLURILATERAL, REGIONAL AND/OR BILATERAL AGREEMENTS
11. IstheMember party toanyplurilateral, regional and/or bilateral agreements withprovisions
ongovernment procurement? Ifso,please describe therelevant provisions.
TheAustralian Government isasignatory totheAustralian NewZealand Government
Procurement Agreement (ANZGPA) 1991.Theobjective ofthisagreement istoremove
discrimination ingovernment procurement among thesignatory parties. Members ofthe
agreement include theAustralian Commonwealth, State andTerritory governments andthe
NewZealand government.
III. ECONOMIC IMPORTANCE OFSERVICES PROCUREMENT
12.(a) Please provide statistics (ifavailable) onthenumber andvalue ofservices procurements
- onbothanaggregate andsectoral basis;
- byorigin ofservices andsuppliers.
(b) Please provide statistics (ifavailable) onthe
- share ofservices procurement intotalprocurement;
- share ofprocurement ofeachservice intotaldomestic output oftheservice;
- share ofprocurement ofeachservice intotaldomestic consumption oftheservice.
Total domestic consumption isdefined asthesumofpublic andprivate consumption orthe
sumofdomestic output andnetimports (i.e.imports minus exports) oftheservice inquestion.S/WPGR/W/11/Add.11
Page20
Thefollowingtableprovidesavailablestatisticsonthenumberandvalueofserviceprocurements
compared withother types ofprocurements undertaken bytheAustralian Commonwealth
government forthefinancial years 1990 through to1995.
ANNEX I
Commonwealth Government Purchasing bySector*
1990-91 to1994-95**
Year Primary Manufacturing Services Grand Total
$,M $,M $,M $,M
1990-91 49.7 4999.7 1439.2 6488.6
0.77% 77.50% 22.18% 100%
1991-92 31.2 2576.8 1666.1 4273.3
0.73% 60.28% 38.99% 100%
1992-93 24.9 1730.7 2420.7 4176.3
0.60% 41.44% 57.96% 100%
1993-94 13.2 2432.6 5214.6 7660.4
0.17% 32.09% 68.78% 100%
1994-95 13.7 3107.2 4448.3 7581.1
0.18% 40.99% 58.68% 100%*
*Thistotalincludes unallocated codes of$11.9M or
0.15%.
*Table compiled bytheElectronic Commerce Office, Purchasing Australia using datafromthe
AustralianGovernmentPublishingServiceDatabasederivedfromtheCommonwealth(Purchasing
andDisposals) Gazette .
**Thesestatisticsincludegazettalvaluesforbothcontractsarrangedandstandingoffers.However,
thefigures forstanding offers areestimates onlyoftheamounts tobespent under thestanding
offers. Thestatistics presented arealsosubject tolimitations affecting thedatasource. These
includeaminimum$2,000thresholdforthegazettalofgovernmentprocurementswhichexcludes
allpurchases below thisvalue. Inaddition, thepercentages quoted donotinclude some services
which have notbeen bought through formal contracting processes (e.g. electricity, some
telecommunications, rents andpostal services).
B. State andTerritory Procurement Statistics
Statistical information onState andTerritory services procurement isnotavailable.