19 October 2018

Challenges ahead: government procurement judicial review law passes Parliament

This article was written by Stephen Mason and Elliott Dunn.

The Government Procurement (Judicial Review) Bill 2017 passed the Senate on 18 October 2018. It creates significant new rights for suppliers to the Commonweath government. If agencies don’t comply with the procurement rules, they can be ordered to pay compensation and their procurements can be suspended, forced to restart or stopped altogether.

The terms of the new Act are the same as when the Bill was introduced in May 2017 (see our earlier alert).

The new Act is intended in part to give effect to aspects of Australia’s obligations under the new Comprehensive and Progressive Agreement for TransPacific Partnership (TPP-11) – which, among other things, sets standards for government procurement and requires member States to provide an impartial administrative or judicial authority to hear challenges or complaints – and under the WTO Agreement on Government Procurement (to which Australia is in the process of acceding).

The new Act will commence 6 months after Royal Assent – or earlier by Proclamation. This timing is intended to facilitate the TPP-11 to commence for Australia as soon as possible.

The new Act applies to procurements by Commonwealth agencies. It does not apply to procurements by State or Territory agencies.

The new Act will significantly change the way Commonwealth agencies plan and carry out many of their procurements. Our Government & Public sector team has already been advising agencies on the implications for their policies, procedures and resources, and how to best prepare for the changes.

Most significantly for agencies, the Act will introduce a range of new remedies for suppliers “whose interests are affected” where a relevant Commonwealth entity has breached Division 2 of the Commonwealth Procurement Rules (CPRs) in relation to a “covered procurement” (that is, a procurement in relation to which the rules in Divisions 1 and 2 of the CPRs apply and that is not in a class of procurements excluded by Ministerial determination). 

These remedies include the right to:

  • complain about a breach - If this happens, the agency will have to suspend the procurement, and investigate and report on the complaint (unless a ‘public interest certificate’ is issued by the procuring agency, certifying that it is not in the public interest to suspend the procurement). This can have a significant impact on procurement activity, given the extensive definition of “procurement” in the CPRs – which applies to the whole of life, including disposal, of the procured items;

  • obtain an injunction or other court order against the agency, requiring it to take action to remedy a breach (e.g. restart a procurement) or to refrain from taking action (e.g. stopping a procurement); and

  • obtain compensation for the breach for an amount reflecting the reasonable expenditure incurred by the supplier in preparing its tender response and making its complaint. 

What should you be doing now?

Agencies should now be reviewing their procurement processes to minimise the risks to procurement from the new Act. For example, agencies should consider processes that encourage tenderers to discuss and resolve issues with the agency, before a formal complaint is made. They should also have contingency plans for managing cases where procurements have to be suspended because of a complaint or court order. If you would like to know more about how the Act will affect your procurements, and how you can better manage its impacts, please get in touch.

Key contacts

Share on LinkedIn Share on Facebook Share on Twitter Share on Google+
    You might also be interested in

    The landmark decision in TPT Patrol Pty Ltd as trustee for Amies Superannuation Fund v Myer Holdings Limited [2019] FCA 1747 was the first shareholder class action to reach judgment in Australia. The...

    06 December 2019

    Westpac’s decision to conduct its recent $2.5 billion equity raising via an institutional placement and security purchase plan (“SPP”) continues the recent trend of ASX200 entities raising equity...

    06 December 2019

    Fast growing technology companies often employ a regulatory strategy of ‘asking for forgiveness, not permission’ when it comes to regulatory compliance in the hope that support from their customers...

    06 December 2019

    Fast growing technology companies often employ a regulatory strategy of ‘asking for forgiveness, not permission’ when it comes to regulatory compliance in the hope that support from their customers...

    06 December 2019

    You may also be interested in...

    This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

    For more information on which cookies we use then please refer to our Cookie Policy.