Competitive tendering disadvantages indigenous groups

By David Donaldson

March 21, 2016

Competitive tendering can disadvantage indigenous organisations up against larger and more experienced NGOs, muting the number involved in delivering services to indigenous people, a Senate report has found.

The shift to a competitive tendering process with the advent of the Indigenous Advancement Strategy “appeared to disadvantage Indigenous organisations”, argued the Senate Standing Committee on Finance and Public Administration report:

“The IAS processes disadvantaged smaller Indigenous organisations with less experience in applying for competitive funding, and who lacked the resources to hire such expertise, compared with larger nongovernment organisations.”

The process also fared poorly in realising the potential benefits of service delivery by indigenous organisations. Only 46% of organisations funded under the IAS were indigenous; they received 55% of total funding.

The IAS, worth $4.8 billion over four years, streamlined over 150 programs into five funding streams in 2014. It is being administered by the Department of the Prime Minister and Cabinet.

Witnesses to the hearings that informed the report mostly agreed reducing the number of funding streams to five was a good idea that could cut red tape and bureaucracy, but many said the process occurred too quickly and was too ambitious. There was little engagement with communities before implementation, and “in addition to implementing a completely new and untested way of doing business, the process was further complicated by machinery of government changes and budget cuts”, the report stated.

The committee heard the IAS’s competitive tendering process positioned small, indigenous community-controlled organisations against well-resourced and experienced applicants, including large not for profit associations and the university sector. According to Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda:

“Many organisations had neither the capacity nor the resources to put together the kind of application required with the tender, and those that did spent a significant amount of time and money to complete their application. I am aware that many of our organisations hired consultants just to complete their application process, many without successes.”

National Congress of Australia’s First Peoples co-chair Kirstie Parker warned the lack of accounting for indigenous connections in the tendering processes might see “organisations that may not have anything to do with a particular community or a particular group of people that try to come in and impose a whole different set of values and a lack of appreciation for community nuance, histories and cultures.”

In some cases, said Parker, “we have had organisations doing a terrific job and clearly meeting the demands of the community and being supported by the community but being forced into a process of competitive tendering.”

PM&C admitted there had been more difficulties with the swift transition to a new system than they had anticipated. Liza Carroll, associate secretary, Indigenous Affairs at PM&C told the committee that “even we had underestimated the breadth and difficulty for a number of organisations. Some of that is what contributed to the fact that we were not able to … finish our assessment process at the end of last financial year, because we had underestimated how difficult that transition would be for organisations.”

Several organisations expressed concern that insufficient weighting was given to whether tendering organisations were indigenous or not. Aboriginal Peak Organisations of the Northern Territory told the committee there were benefits to contracting service delivery out to indigenous groups:

“The Aboriginal controlled organisations delivering these services are not only best suited for doing so, but provide the priority outcomes that the Government is seeking in terms of sustainable Aboriginal employment as well as experience and engagement in governance and management, and the development of community self-reliance and responsibility.”

In response, the Senate report recommended “future tender rounds are not blanket competitive processes” and “future selection criteria and funding guidelines should give weighting to the contribution and effectiveness of Aboriginal and Torres Strait Islander organisations to provide to their community beyond the service they are directly contracted to provide.”

There was some criticism of the amount of consultation undertaken by PM&C prior to introducing the changes. “We did not engage heavily enough at the beginning of the process,” conceded Carroll.

“Post the budget decision and announcement, we did not have a consistent enough engagement plan and mechanism for engaging more broadly with service providers and the community more generally, and a plan to then build that into thinking about how we get from where we are to where we need to be. It was really about more not just communication but also engagement up-front, which is why we are making sure we have a much more consistent and thorough engagement process as we go forward.”

The department said they have set up a branch to focus on not only the immediate reviews of the IAS but also will consider how “broader engagement, communication and consultation” with stakeholders about the whole of PM&C’s indigenous program can be undertaken.

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