Services Australia, NDIA fell short in $374 million worth of procurements

An independent review into Services Australia and National Disability Insurance Agency procurements has criticised the agencies’ use of limited or single supplier tenders.

The review was established by the CEOs of Services Australia and the NDIA and conducted by Dr Ian Watt, after a spate of media reports questioning the probity of several contracts, and flagged 19 projects worth $374 million as needing further investigation, out of the 95 projects reviewed.

Technology contracts featured heavily the procurements, with projects awarded to the likes of Adobe, Infosys, Oracle, Unisys Australia and Vlocity among those examined.

The review - delivered as Dr Watt’s review [pdf]; and a report by the independent taskforce that advised him [pdf] - did not find any misconduct in the 95 procurements.

But it did find that 19 procurements may have breached Commonwealth procurement rules (CPRs), showed characteristics such as potential conflicts of interest that need further investigation, or were “lacking the necessary information to categorise them as ‘amber’ or ‘green’”, the independent review stated.

Ten (10) didn’t carry sufficient conflict of interest documentation; four had “insufficient risk considerations”, seven were inadequately documented, and nine of the Services Australia “red” procurements “had not met the requirement to publish on AusTender within 42 days”.

Twelve (12) of the “red” projects also lacked “clear value for money justification”, and 10 of those had been acquired using a single supplier tender.

Out of 13 “red” projects procured through a panel, eight lacked value for money justification.

The review does not specify which programs of work would benefit from specific action.

The independent reviewers recommend changes to the use of limited or single supplier tenders by the agencies.

If an agency used urgency to justify these processes, they should need “clear, fully documented justification for the decision”; the use of limited and single supplier tenders should always be “justified and fully documented”; and particular care is needed if such a procurement is going to trigger a chain of other procurements, the review found.

The review also calls for more transparent procurements by the two agencies, and tighter conflict of interest processes.