This article was written by Katherine Vines, Danika Kuczerepa and Grace Bettridge.
The Western Australian Government has introduced the Procurement Bill 2020 (WA) (Bill), proposing a more streamlined and flexible whole-of-government framework for government procurement in Western Australia.
The proposed framework will apply to the procurement of goods, services or works by most State departments and agencies (including sub-departments, Ministerial and CEO administered bodies corporate and statutory authorities) other than universities, Synergy, Verve, Western Power, Horizon Power, port authorities, the Water Corporation, LandCorp or as prescribed by regulation (s 5 of the Bill).
At a broad level the proposed procurement model has the potential to benefit suppliers and government alike. By addressing the complexity, fragmentation and inefficiency within the current framework, the proposed framework will:
- make it easier for suppliers to comprehend and engage with supply opportunities with there now being a single set of procurement rules for the majority of State agencies;
- potentially minimise the supplier's costs in engaging in government tender and procurement processes given the uniform processes and greater scope for collaborative arrangements with multiple agencies;
- provide some protection for suppliers from unethical business practices of other suppliers with centralised and independent oversight and disbarment consequences for suppliers who engage in unethical conduct; and
- afford the WA Government greater flexibility and efficiency in developing and adapting its procurement policies to suit its needs, including in response to changing environments.
However, it remains to be seen whether the new framework will have the intended effect of reducing red tape and broadening the opportunities for small and medium sized suppliers, given the detail of the participation rules and procedures is still unknown. The detail will largely set out in Ministerial directions and regulations which have not yet been released.
From an economic perspective, it is anticipated that increasing the ease at which businesses can work with the Government may assist in WA's economic recovery following the COVID-19 pandemic.
Scope and application of the proposed procurement framework
The Bill will replace the existing processes under the State Supply Commission Act 1991 (WA) (SSC Act) and a number of other acts, including the Public Works Act 1902 (WA). The Bill reflects recommendations arising from the Service Priority Review (published in June 2017) and the Special Inquiry into Government Programs and Projects (published in February 2018). These identified the current procurement framework as being complex, fragmented and inefficient and causing frustration to small and local businesses.
The Bill applies to all 'Procurement' broadly defined to include obtaining goods, services or works of any kind (including community services, ICT and construction work) by purchase, lease, licence, public-private partnerships or other means, and disposing of goods or works.
It empowers all relevant State agencies to now procure goods, services or works, even where they previously did not have such power under written law or through the executive power of the State (s 10 of the Bill).
Overview of the proposed procurement framework
The key features of the proposed framework are as follows.
Minister-led coordination |
The new framework will be administered by a Minister and the Department CEO (expected to be the Department of Finance). The Minister will be responsible for issuing procurement directions (discussed below) and the Department CEO will be responsible for the day-to-day administration of the framework, including general oversight/governance, establishing common use arrangements, undertaking specified procurement and debarring/suspending suppliers. |
Procurement directions |
Under the Bill the Minister can issue procurement directions, to set out rules and policies applicable to procurement activities, including for methods of procurement, coordination of procurement, contracts and their management and administration, and investigation and complaint handling (among other things). These directions can be general (applying to all State agencies) or agency specific (applying to certain agencies). Note that a decision (including to award a contract) will not be invalidated solely because the relevant State agency breached a procurement direction. While this may be a comfort to those who benefit from the decision, there are no remedies afforded for those suppliers who are aggrieved by this breach meaning suppliers will unlikely be able to recover their costs, claim damages or have the decision remade where they may have won the tender but for that breach. |
Coordination and cooperative arrangements |
The new framework provides for arrangements to be entered into between State agencies (and in certain cases authorised bodies) for the coordinated purchasing of goods, services or works, providing significant potential for generating synergies for the State and suppliers alike. Such arrangements include: · common use arrangements established with suppliers that may be used by State agencies for their procurement (which was not previously possible under the SSC Act) · cooperative arrangements whereby a State agency can use an arrangement established by another agency or authorised body (eg universities, local governments or other jurisdictions) · cooperative arrangements whereby a State agency can procure on behalf of other agencies. |
Governance |
The Bill includes mechanisms to ensure the integrity of the framework and allow for community concerns to be addressed. The Department CEO will undertake programmed compliance investigations, including following a complaint from a supplier about an agency. State agencies will remain responsible and accountable for their own procurement activities. Where an agency is found to have breached the act or the procurement directions, the Department CEO may take specified action including to publish the agency's failure, require the agency to take specified measures for compliance, further regulate the procurement activities of that agency or require the procurement activities to be undertaken by the Department CEO or another person on behalf of the agency. |
Suspension from procurement |
The Bill allows for regulations to bar or suspend suppliers from government procurement . It is anticipated that grounds for barring a supplier will include offences relating to fraud and corruption, industrial relations, environment and non-payment of taxes although the regulations are still to be finalised. Debarred suppliers will have a right to apply for review by the State Administrative Tribunal but will not be able to recover damages or a civil remedy if the decision was made in good faith. While barring or suspending a contractor will not affect the validity of a contract entered into, the Bill provides a legislative termination right in favour of the State agency in the event of debarment (which may be contracted out of), allowing the State agency to terminate an existing contract with a debarred Supplier. The Bill does not provide an appeal process regarding a decision by a State agency to terminate a contract although this may be provided by the regulations, which may make provision for or with respect to the termination of contracts. |
The regulations setting out the detail of the procurement framework and in particular, the debarment regime have not yet been released.
Next steps
The Bill was introduced into the Legislative Assembly on 13 May 2020. There is not yet any indicative timing for when the Bill is expected to pass Parliament and commence. To track the progress of the Bill, see here.
