RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTGP/W/14
23 February 1998
(98-0627)
Working Group on Transparency
in Government ProcurementOriginal:  English
INFORMATION ON PROCEDURES AND PRACTICES ON TRANSPARENCY
IN GOVERNMENT PROCUREMENT
Communication from Australia
The following communication, dated 17 February 1998, was received from the Permanent
Mission of Australia with the request that it be circulated to Members.
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Introduction
1. This note is intended as a contribution to the study phase of the Working Group on
Transparency in Government Procurement of the World Trade Organization (WTO).  It outlines the
procedures and practices of the Australian Commonwealth Government relating to transparency in
government procurement, incorporating new simplified purchasing arrangements announced by theAustralian Government on 11 December 1997.
2. Australia is a federation.  In addition to the National or Commonwealth Government, there
are six State Governments and two Commonwealth Terr itory Governments.  Each of these has its own
procurement legislation, policies and procedures.  The third tier of government is local government.
3. There is no national regulation of procurement by subnational governments and their
agencies.  However, the Commonwealth, State and Territory Governments and the New Zealand
Government are parties to a Government Procurement Agreement (GPA) which commits them to:
- remove discrimination among themselves in government procurement;  and
- work in a coordinated way to improve procurement practices and procedures and to
introduce greater uniformity across jurisdictions.
Basic principles
4. The Government reaffirmed in December 1997 that value for money, open and effective
competition and ethics and fair dealing will remain the guiding and fundamental principles for
government buyers.
- Value for money.  Commonwealth procurement practices and procedures are directed
towards achieving the best available value for money in the acquisition of goods and
services for government programmes.  The test for the best available value for money
is a comparative evaluation of all relevant costs and benefits over the whole life of theWT/WGTGP/W/14
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goods or service being considered.  Buyers will not necessarily obtain the best value
of money by accepting the lowest priced offer that meets all mandatory criteria.
- Open and effective competition.  This is a central operating principle of
Commonwealth procurement, permitting a range of procurement methods.  It
demands transparency in the procurement process and ease of entry for new and smallsuppliers.
- Ethics and fair dealing.  The Government requires that agencies and individuals
conduct activities in a fair and reasonable manner and with integrity.
5. The Commonwealth Government expects its agencies to reflect its wider policies in the way
they do business.  For example, when acquiring office accommodation and fitting it out with furniture
and equipment, agencies need to ensure that they observe government policy and best practice on
occupational health and safety.  Policies to be supported through government procurement include
environmental policy, heritage policy, creation of opportunities for Aboriginal and Torres StraitIslander people, elimination of discrimination against women in private sector employment, and
foreign policy (e.g. maintenance of any UN sanctions).
National legislation and procedures
6. Australia does not apply any preference margins, set-asides or offsets requirements with
respect to Commonwealth Government procurement.
7. In the Commonwealth Government, the management of procurement is substantially
decentralized with each agency being responsible for its own procurement within a
centrally-prescribed framework of procurement policy and advisory guidance on best practices and
techniques.  The policy framework is set out in the Commonwealth Procurement Guidelines , which
are issued by the Minister for Finance and Administration.
8. Commonwealth departments and agencies bound by the Financial Management and
Accountability Act 1997 and its Regulations  are to operate in accordance with the policies and best
practices as set out in the Guidelines.  The Guidelines can be viewed and down-loaded free over the
Internet at http://www.pa.gov.au.
Evaluation criteria
9. The Commonwealth Procurement Guidelines direct that the evaluation criteria for any
particular procurement should clearly identify the relative importance of all relevant factors, and
provide a sound basis for a procurement decision.  Agencies should evaluate each offer applying only
the evaluation criteria and methodology notified to bidders in the request for tender documentation.
Common use arrangements
10. Strategic Common Use Arrangements (CUAs) will  be introduced for goods and services that
are fundamental to Commonwealth operations and offer potential significant savings for the
Government.  The use of these arrangements will be mandated for the term of the arrangement, with
the agreement of relevant portfolios, or where the Minister for Finance and Administration, following
consultation, concludes that the interests of the Commonwealth are best served by such an
arrangement.
11. In key industry segments that are not covered by strategic CUAs, but in which the
Government is a major purchaser, or there is a risk of market failure, a pre-qualification scheme forsuppliers is being developed by the Department of Finance and Administration.  These schemes willWT/WGTGP/W/14
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help agencies manage risk in their procurement activities and give greater confidence in selecting
suppliers that conform to minimum quality, service delivery and performance standards.
12. Although participation in the scheme will not guarantee business for suppliers, it should
reduce red tape and the costs of tendering for business by eliminating the need for suppliers to
respond to requests from agencies for basic information on each occasion that they tender.  This
pre-qualification scheme is open to foreign suppliers.
Public announcement of procurement opportunities
13. There is no financial threshold for advertisement of procurement opportunities.  As conditions
vary, the agency responsible must consider each case on its merits.
14. All Commonwealth agencies must use the Purchasing and Disposals Gazette  to advertise all
publicly available opportunities to do business with the Government, including, but not limited to,
invitations to bid, express interest, qualify as approved suppliers, offer proposals or the like.  The
Purchasing and Disposals Gazette is published weekly on Telstra Transigo
(http://www.transigs.net.au).  Hard copies can be obtained by telephoning the Transigo Customer
Assistance Centre on +61 6250 1355.
15. Agencies may also advertise opportunities in other media.
16. Publicly available procurement opportunities must be notified consistently in ways that
provide bidders with reasonable opportunity to meet any pre-qualification requirements forparticipation in government business, and to bid against particular requirements.
17. Gazettal of opportunities is not required wherever the decision is to confine an approach, for
example, a sole source, a limited field of suppliers or to a list of suppliers established following a
publicly notified selection process.
18. Commonwealth agencies must publicly notify in the Purchasing and Disposals Gazette details
of any contract arranged for supplies to be processed or used in Australia where the total estimated
liability is $A 2,000 or more.  Agency Heads may decide to exempt notification under the Freedom of
Information Act (1982).
Complaint/appeal procedures
19. As a first step, suppliers that complain about procurement processes or decisions are entitled
to receive a fair hearing from the agency involved.  It is Commonwealth Government policy that
agencies offer all unsuccessful bidders a written or oral debriefing.  When receiving complaints about
procurement processes agencies should act in accordance with the procedures they have in place for
handling complaints in general.  Often buyers and suppliers can resolve complaints satisfactorily at
the agency level.
20. If a supplier or potential supplier is not satisfied with the handling of its complaint by the
individual agency concerned, there are other avenues of complaint available.WT/WGTGP/W/14
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21. First, any supplier may complain to the Commonwealth Ombudsman concerning the actions
or decisions of a buying agency which that supp lier considers to be wrong, unjust, unlawful,
discriminatory or unfair.  If the Ombudsman finds a complaint to be justified, he/she may recommend
a remedy, such as:
- an apology;
- a reconsideration of or changes to the decision;- changes to agency rules or procedures;
- compensation for losses or damages caused by the agency's decision or action;  or
- changes to the law that caused the problem.
Recommendations by the Ombudsman are not automatically binding on an agency but, if it fails to act
upon the recommendations adequately, the Ombudsman may report to the Prime Minister and then to
Parliament.
22. Suppliers may approach the Purchasing Advisory and Complaints Service  within the
Commonwealth Department of Finance and Administration.  This service does not replace other
avenues for complaint nor can it overturn purchasing decisions made by agencies.  It is established to
provide an informal advisory mechanism to help  suppliers resolve complaints with Commonwealth
agencies about purchasing processes, facilitating discussion between the parties involved.  Although
open to all suppliers, it is expected that this service will be of most benefit to small companies withlimited knowledge, experience and resources to pursue complaints directly with agencies.  The service
should also be of significant assistance to any foreign suppliers which wish to make complaints.
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