National Capital Authority Under Procurement Scrutiny

The National Capital Authority (NCA) was established in 1989 under the Australian Capital Territory (Planning and Land Management) Act 1988 (PALM Act) following the introduction of self-government to the Australian Capital Territory.

The authority’s mission is ‘to shape Canberra as a capital that all Australians can be proud of by ensuring it is well planned, managed and promoted, consistent with its enduring national significance.’

Procurement is a core business of the NCA. It had been more than 13 years since the last NCA performance audit, so the Australian National Audit Office (ANAO) recently completed a review, with the objective of examining whether the NCA’s procurement activities are complying with the Commonwealth Procurement Rules (CPR’s) and demonstrating the achievement of value for money.

Its findings were concerning. The ANAO report found:

1. NCA’s insufficient use of open and competitive procurement processes, non-compliance with the CPRs, and poor transparency and record-keeping meant it could not demonstrate value for money across its procurement activities.
2. The NCA makes insufficient use of open and competitive procurement processes. Where open tenders were conducted, it was common for request documentation to limit the extent of effective competition. Where suppliers were directly approached, the pool of potential tenderers was often limited to those previously engaged by the NCA or described by the NCA as being known to the NCA or its advisers. With respect to the assessment processes undertaken, just over half of the contracts were awarded to the candidate where documentation demonstrated that it offered the best value for money. The conduct of procurements was also not to a consistent ethical standard.
3. ****Procurement decision-making has not been sufficiently accountable and transparent. Approval had been obtained by an appropriate delegate in most of the contracts examined. It was common for there to be gaps in the records of the planning and conduct of procurements. The NCA’s reporting of contracts and amendments on AusTender was largely non-compliant with the requirements under the CPRs.

To contextualise this report, note that in 2019–20 and 2020–21, there were 327 contracts with a total value of $69.9 million reported by the NCA on the AusTender website.

The ANAO report lists the following support material to their findings:

1. The majority (64 percent) of procurement valued above the $80,000 threshold in the CPRs undertaken by the NCA in 2019–20 and 2020–21 did not involve open competitive approaches. In comparison, other non-corporate Commonwealth entities are much more likely to report using competitive procurement approaches. (See paragraphs 2.3 to 2.26)
2. ****For just over half of the procurement examined by the ANAO, appropriate written records were made of the justification for using limited tender processes and how value for money was achieved. (See paragraphs 2.30 to 2.32)
3. For 60 percent of the contracts examined in detail, it was evident that relevant evaluation criteria were included in request documentation. For the remaining 40 percent, either the request documentation did not include any evaluation criteria or there were no records of the request documentation on file. (See paragraphs 2.54 to 2.57)
4. With respect to the assessment processes undertaken, just over half of the contracts examined in detail by the ANAO were awarded to the candidate where documentation demonstrated that it offered the best value for money. In the remaining 45 percent of contracts where value for money outcomes had not been demonstrated, this was primarily the result of insufficient analysis being presented commensurate with the scale of the procurement or the result of poor record-keeping practices. Of note was that the essential requirements and/or evaluation criteria applied during the evaluation process were not consistent with the approach to the market in 88 percent of contracts examined (where sufficient documentation was maintained). (See paragraphs 2.60 to 2.68).

Transparency is not a difficult thing to achieve, but it does require a fundamental organisational commitment to it. As advocates for procurement transparency, we hope this ANAO report will encourage a shift towards greater transparency of process, across all government departments.

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Photo by Harry Burk