New Commonwealth Procurement Rules: consider Australian economy

By David Donaldson

March 2, 2017

Public servants must consider the economic benefit to the nation of new procurements — despite not being allowed to discriminate based on ownership or location of suppliers, or the origin of their wares — under new Commonwealth Procurement Rules that take effect this week.

The updated Commonwealth Procurement Rules, announced in November as part of a deal between the government and Senator Nick Xenophon to gain the latter’s support for the Australian Building and Construction Commission, began on March 1. They include three new checkpoints:

  • for a procurement above $4 million, there will be a requirement to consider the economic benefit of the procurement to the Australian economy;
  • procurement is consistent with relevant regulations and regulatory frameworks and reasonable enquiries will be expected to made into a prospective supplier’s employment practices, occupational health and safety and environmental impact; and
  • where a standard is applicable, tender responses must demonstrate the capability to meet the Australian or international standards and reasonable steps must be taken to check for evidence of compliance.

Debates — and parliamentary stunts — about whether government should give preference to Australian companies in the $57 billion annual procurement spend are a favourite of certain populist politicians. One wonders how exactly requiring consideration of the benefits to the Australian economy sits with non-discrimination rules.

“The Australian Government’s procurement framework is non-discriminatory,” read the rules. “All potential suppliers to government must, subject to these CPRs, be treated equitably based on their commercial, legal, technical and financial abilities and not be discriminated against due to their size, degree of foreign affiliation or ownership, location, or the origin of their goods and services.”

The CPRs are the basic rule set for all Commonwealth procurements. A small number of minor changes have also been made to improve clarity of language and presentation. The updated rules apply to new procurements which approach the market on or after 1 March 2017.

The full Commonwealth Procurement Rules, and a table outlining the changes, are available here.

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