South Australian Senator Nick Xenophon secured a number of amendments to the Commonwealth Procurement Rules (CPRs) to benefit Australian companies bidding for lucrative Government contracts. These amendments will come into effect in March 2017.
In a statement on Wednesday morning Xenophon said, “The changes passed last night avoid another Rossi Boots debacle where Australian jobs were needlessly exported overseas.”
In 2014 Rossi Boots, an Australian manufacturer of boots, unsuccessfully submitted a tender to supply the Australian Defence Materiels Organisation (DMO) 100,000 pairs of non-combat boots. The contract worth $A15million was subsequently awarded to an Indonesian company. At the time the value for money provision in the CPRs did not take into consideration the broader economic impact of sourcing locally.
Xenophon’s amendments are intended to ensure that in future Government Procurement Officers take into account an holistic assessment of economic impact of the procurement to the Australian economy. The amendments regarding consideration of “value for money and broader benefits to the Australian economy” for procurements over $4million are contained in s10.30 of the CPRs.
The new s10.10 of the CPRs refers to the application of Australian standards: “Where an Australian standard is applicable for goods or services being procured, tender responses must demonstrate the capability to meet the Australian standard, and contracts must contain evidence of the applicable standards (see paragraph 10.37).”
Under s10.37 procurement officers are advised they must also make reasonable enquiries in these circumstances by gathering “evidence of relevant certifications” and “periodic auditing of compliance by an independent assessor.”
The amendments will also allow for reasonable enquiries to be made into a prospective supplier’s compliance with relevant regulations and/or regulatory frameworks such as employment practices, OHS and environmental regulations. These amendments are set out in s10.18 of the CPRs.
The amendments provide greater clarity about interpretation of the Value for Money principle in the CPRs allowing for a broader interpretation than just cost and risk. Xenophon noted that these amendments bring Australia into line with our key trading partners such as the United States, Canada and New Zealand.
Design4Growth is a professional services consultancy that advises firms globally on their social license and local content challenges. For confidential advice regarding your company’s challenges please contact firstname.lastname@example.org.
The author, Karen Redshaw, is the Co-Founder and Global Practice Partner of Design 4 Growth Pty Ltd.