Councils spend over $8 billion/year on goods & services to provide & maintain vital infrastructure, facilities & services for their communities, Auditor-general John Ryan says in an article-cum-report on local government procurement, out today.
One paragraph in the 6-page report was worth writing – to initiate the report the Auditor-general should have written.
Mr Ryan & his staff went to 21 councils to see how they carry out procurement and, he wrote in the article, which is also the full report: “Through our office’s other audit & inquiry work, we have seen many situations where procurement goes wrong. In our view, this is more likely to happen when public organisations do not have the right culture, leadership or systems in place for procurement. This applies to councils as much as it does across the public sector, as our council visits confirmed.”
In this article, he commented, “we ask a series of questions about the procurement practice & culture in a council. These questions have been informed by some of the concerns that we heard from council staff and observations that we have made from our other work.”
The topics the questions cover are:
- good governance for procurement
- planning for significant capital projects
- conflicts of interest
- emergency procurement
- procurement capability & capacity
- procurement policies & training
- contract management; and
- achieving broader outcomes through procurement.
- Doesn’t provide the valuable insight the audit staff might have gauged from their discussions, apart from a few points
- Mixes the standard audit “Behave well” with what the office expects to see, and
- Lists questions but doesn’t provide a succinct list of either council staff’s or its own responses.
One paragraph in the 6 pages is a valuable starting point:
“When we visited councils, many told us they were starting to see a decrease in the number of suppliers bidding for contracts, especially for construction projects. Although this had not yet affected their ability to meet their capital programme & deliver services, it could become a greater problem as the effects of growth are felt more widely. Only a few of the councils we visited actively discussed with suppliers upcoming works & ways of reducing any barriers to participate in procurement.”
That’s a starting point which raises these questions:
- Why are fewer suppliers bidding?
- Can the council change the system to encourage more bids?
- Is the cost of submitting too great compared to the odds of winning a contract?
- What do “the effects of growth” have to do with the effectiveness of a procurement system?
- Can council staff discuss upcoming works with specific potential (or current/potential) suppliers without running the risk of a corruption allegation?
- Are there ways councils can engage with potential suppliers which they’re not using already?
To help the Auditor-general write the follow-up report, council staff or affected contractors might like to add your views below.
Auditor-general 21 May 2020: Local government procurement