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New procurement rules empower companies to challenge government agencies

Companies now have more options to challenge Commonwealth procurement decisions in the Federal Court following legislation that came into force over the Easter long weekend.

Procurement officers still go about their work as usual, following the Commonwealth Procurement Rules, but now if prospective suppliers suspect public servants have breached them, or intend to, they can freeze the process.

They could also take the agency to court and claim compensation for the cost of writing up their tender and making the complaint, if their concerns are found to be valid.

“The Act provides for injunctions both to compel the relevant agency to cease doing something (or not to do something) that would breach the CPRs, and injunctions requiring the agency to positively do something or take a course of action so as to comply with the CPRs,” according to a handy explainer from Maddocks Lawyers.

“It should be noted, however, the court will not have the power to overturn a contract once it has been awarded.”

The Government Procurement (Judicial Review) Act 2018 was passed back in October but only took effect on Saturday, April 20, as the government chose not to nominate an earlier starting date. Regardless of when the procurement process began, the new law covers any alleged breach of the CPRs from April 20 on.

First suppliers have to make a complaint to the agency, which must investigate and freeze the procurement until the dispute is resolved, including if it ends up going to court.

Accountable authorities such as department secretaries can keep the deal rolling, however, if they certify that pausing the procurement would be contrary to the public interest.

The new rules only apply to decisions related to procurement processes that have to follow both divisions of the CPRs and do not qualify for any exemptions.

They cover all of the public service and the 20 corporate Commonwealth entities listed in the PGPA Rule, section 30, as being subject to the Finance Minister’s rulings on procurement (listed below).

According to Maddocks Lawyers,

“The court must not grant an injunction unless the supplier:

  • has made a complaint to the relevant entity;
  • has made a “reasonable attempt to resolve the complaint” if it would be reasonable for the supplier to do so; and
    • either: applied within 10 days of the alleged contravention of the CPRs, or the day on which they became aware, or ought reasonably have become aware of the contravention; or
    • obtained an extension of time to make the application on the basis that their delay was attributable to their reasonable attempt to resolve their complaint concerning the alleged contravention, or there are special circumstances warranting a greater period.”

The Commonwealth agencies designated in section 30 of the PGPA rule as being subject to the Finance Minister’s rulings on procurement are:

Australian Human Rights Commission

Australian Institute of Health and Welfare

Australian Institute of Marine Science

Australian Maritime Safety Authority

Australian National Maritime Museum

Australian Nuclear Science and Technology Organisation

Australian Pesticides and Veterinary Medicines Authority

Australian War Memorial

Comcare

Commonwealth Scientific and Industrial Research Organisation

Director of National Parks

Export Finance and Insurance Corporation

Grains Research and Development Corporation

Independent Hospital Pricing Authority

Murray‑Darling Basin Authority

National Gallery of Australia

National Museum of Australia

Reserve Bank of Australia

Sydney Harbour Federation Trust

Tourism Australia

Author Bio

Stephen Easton

Stephen Easton is the associate editor at The Mandarin based in Canberra. He's previously reported for Canberra CityNews and worked on industry titles for The Intermedia Group.