It was fitting that on International Women’s Day, the Australian National Audit Office (ANAO) published its performance audit report into the Department of Social Services' (DSS) procurement of a new 1800RESPECT service provider, given the importance of that service to women and children. Telstra Health secured this $200 million five-year contract in January 2022 and commenced providing the service on 1 July 2022.
The upshot? The procurement was effective and compliant. The ANAO made only one recommendation which delivers a key message to all Australian Government Entities seeking to procure third party service providers – the importance of transition management.
Key questions answered
- What is 1800RESPECT? Launched in 2010, 1800RESPECT is Australia’s national domestic, family and sexual violence counselling service. It forms a key part of the 2010-2022 and 2022-2033 National Plan to Reduce Violence against Women and their Children, administered by DSS. Before Telstra Health took over, Medibank Health Solutions provided the service.
- What was the procurement process? Procurement for a new service provider of 1800RESPECT began on 19 February 2020. DSS received 11 responses to a Request for Expression of Interest, and subsequently opened a Request for Tender to five shortlisted respondents. Two tenderers made the final shortlist and were asked to respond to further requirements contained in an added addendum on workplace sexual harassment. The contract with Telstra Health was subsequently executed on 24 January 2022.
- Why was there a performance audit? In ANAO’s own words, the performance audit was undertaken ‘to provide assurance to the Parliament that the procurement process undertaken by the department is likely to deliver a service that can meet increasing demand and provide the highest quality support within the projected cost’
The findings
ANAO summarised their findings as follows:
- the procurement was effective and has the potential to achieve value for money;
- DSS’s tender process was effective and complied with the Commonwealth Procurement Rules; and
- the transition between service providers was appropriately managed and administrative arrangements for the new contract are fit for purpose (with one recommendation)
Recommendation: ANAO made only one recommendation, that DSS develop an evaluation strategy and plan to assess the performance of 1800RESPECT. DSS agreed to this recommendation.
What ANAO wants you to know
The report findings are very positive and, along with the recommendation, highlight an important message that ANAO is seeking to get across to other Australian Government entities – the importance of effective transitions between third party service providers to make sure service is not compromised.
Some examples of what DSS did well to execute an effective transition between service providers include:
- monitoring and reporting on transition risks
- implementing Telstra Health’s Transition-in Plan
- including rollback options to the previous service provider in the transition strategy
- establishing a Transition Working Group to support the transition and a Transition Leadership Group to oversee the transition, as well as other advisory teams
- developing a contract management manual for the contract with Telstra Health.
Although concluding that the transition of 1800RESPECT from Medibank Health Solutions Telehealth to Telstra Health was well managed and fit for purpose, ANAO found that there was room for improvement. It is no surprise that given the report’s emphasis on effective transitions, that the one and only recommendation provided by ANAO was in relation to this area. The recommendation to develop an evaluation strategy and plan to analyse Telstra Health’s performance ensures that the transition between service providers has not jeopardised the service.
ANAO uses lessons learnt from the 1800RESPECT transition to provide guidance to all Australian Government entities on effective transitions between service providers. Good practice involves:
- including transitional arrangements in all contracts for ongoing outsourced services to avoid future risks and costs when a change in service provider occurs;
- ensuring data is complete and accurate when assessing the performance of services delivered by third parties; and
- implementing an effective transition plan which may include things such as mitigation strategies.
So, some good, pragmatic advice from the ANAO and a gold star for DSS.
To read more about this performance audit report or to view other performance audits into Australian Government procurements visit the ANAO website.
