The note published on Finance’s website, reminded procurement officials they must (the department’s emphasis) consider previous behaviour, including ethical conduct, of an organisation when undertaking value for money assessments of tenders.
In case departments have not been reading The Australian Financial Review, the note says: “This could include consideration of any unethical behaviour and/or deficiencies in performance under prior contracts (including failure of the tenderer to abide by substantive requirements such as confidentiality provisions).”
And to make it very clear, dishonest, unethical or unsafe supplier practices may include “tax avoidance, fraud, corruption, exploitation, unmanaged conflicts of interest and modern slavery practices”.
Finance is god in Canberra procurement land. No more nudges or shadow-bans, PwC is now firmly in the Canberra doghouse, its circa $250 million annual federal franchise in deep jeopardy.
Risk management changes
Consultants were already on the nose in Canberra, and Labor last year pledged to cut $3 billion of consulting and contracting costs, partly to restore capability and policy skills.
The strong political support the government received for its new anti-corruption agency has ushered in a string of training, cultural awareness, documentation requirements and risk management changes across the federal public sector.
Every public servant has been warned they are now being watched, prompting a new integrity regime and an almost zealotry awareness of potential conflicts. Try buying any official a cup of coffee, and you will be politely declined.
This monk-like purity is now being extended to the $70 billion of contracts the Commonwealth annually tenders for.
Wilkinson told senators a code of conduct was also being developed to outline the “behavioural standards” expected from suppliers “during procurement processes and while under contract”.
Meanwhile, contract managers have been told they can terminate suppliers for material breaches, including for behaviours “beyond the specific contractual arrangement”. There will also be a requirement for suppliers to advise Finance of these breaches as soon as they are found.
And if that is not a loaded gun, Finance is giving itself power to remove a supplier from panels and cancel all existing and future contracts, for egregious behaviours, even if outside the specific scope of the services delivered.
No prizes for guessing who that power is directed at.