Report warns of serious issues with government procurement

Wednesday 28 September, 2016

The Chamber of Commerce and Industry Queensland (CCIQ) welcomes the findings of a report on government procurement procedures and moves to set up an advisory group to examine key issues.

The Auditor-General’s report into strategic procurement said the Procurement Transformation Division and government departments had not delivered on the significant financial benefits as promised.

The Palaszczuk Government has responded quickly by establishing a Procurement Industry Advisory Group with a focus on targeting procurement spending on achieving overall value for the community, making it easier for the Queensland business community to do business with government.

CCIQ notes that the report appears to be more about how the government can get increased value for the taxpayer dollar than getting Queensland’s private sector better involved in the procurement chain.

The chamber has a long-held position that government procurement should not be constrained by ideological positions, but instead focus on value-for-money outcomes that meet community expectations for quality services.

CCIQ urges the government to consider alternative ways to increase the share of government services provided by the private sector.

Queensland businesses are well placed to deliver high quality services and greater operational efficiency, which will help promote economic growth. Contestability reduces the financial size of the government – but not actual services to the public. It is a win for all Queenslanders.

CCIQ believes Queensland businesses should be provided with full, fair and reasonable opportunity to participate in major projects in government procurement.

CCIQ is strongly supportive of initiatives that increase the involvement of Queensland businesses in government procurement and projects due to the positive impacts on employment and business growth, particularly in those regions that are not performing strongly.

CCIQ has previously conducted extensive research (Pulse Survey of Business Conditions December Quarter 2015) to determine the level of business involvement in government projects and to identify ways to increase the opportunities available to them.

The majority of businesses (73 per cent) indicated more could and should be done to assist local industry in gaining contracts for government procurement and major projects.

The survey found half of businesses (55 per cent) agreed the private sector should be allowed the opportunity to enter markets and provide services previously the domain of the public sector.

The basis of the above rested primarily on the belief that the private sector was able to deliver significant public benefit through higher quality of services, greater value for money, operational efficiency and better customer service than government entities currently provide.

By placing more of an emphasis on the ability of private sector to deliver these outcomes, money can be saved and outcomes will be improved for community and government.

However, Queensland businesses have raised significant and ongoing issues with the pre-existing procurement framework in Queensland, namely that they are not able to easily assess, access and participate in procurement opportunities. 

Two-thirds of Queensland businesses (64 per cent) had not participated in government procurement opportunities for goods, services or capital projects. Of those businesses that had been directly or indirectly involved in procurement opportunities, 44 per cent rated the whole process and experience as average and a further 27 per cent rated the process as poor or very poor.

It appears that much more needs to be done to improve the following aspects of the procurement process:

•           Support and assistance provided by the agency or project tender manager;

•           Fairness and equity of the tender selection process;

•           Delivery of project and procurement and reporting requirements;

•           The application process and documentation required.

The key reason identified by businesses for why they had not previously been involved in procurement opportunities was their lack of awareness of the opportunities available, especially at a regional level.

There is a growing perception that local small businesses cannot compete against larger national and international companies, particularly due to their size, inability to complete complex applications/tender processes and the substantial time and effort required to do so.

There are also concerns regarding the excessive conditions placed on potential contractors and many businesses being unable to meet project tender requirements.

And that is why there needs to be more widespread adoption of CCIQ’s QAssure.

CCIQ QAssure is an accreditation service for businesses within the Information and Communications Technology industry. It independently assess ICT vendors and provides them with a tick of approval upon meeting the assessment criteria.

The Queensland Government has given its full support to the service, with CCIQ working in close collaboration with the government’s Department of Science, Information Technology and Innovation (DSITI).

For many years, the Queensland public sector had its own system, although it had been subject to considerable red tape. Now, the government uses CCIQ QAssure to accredit all ICT business who wish to contract services to it.

While many government departments have limited data around suppliers, DSITI has secure access to financial, insurance, category and supplier information which aides in the prequalification and selection of potential suppliers. In addition, information relating to suppliers’ capabilities and key contacts is made available on QAssure so that vendors can be found by other businesses seeking suppliers and partners through a detailed search function. 

QAssure provides a level of assurance and credibility checking, not seen in the wider procurement community. It adds a layer of data security and independent checking with ensures suppliers entering into the procurement process are capable of fulfilling their commitments.

QAssure, while developed specifically for the IT procurement process, has systems and process which allow it to be expanded into all categories and departments of government. It performs checks in the pre-procurement and contracting phase and ongoing yearly checks on regulatory compliance.

QAssure is a key part of the procurement capability framework, in that it categorises or ICT suppliers, checks these capabilities and de-risks the supplier assessment with a detailed assurance check.

It is a great example of digital transformation and how successful public and private partnerships can assist the procurement process and achieve value for the business community.

Advisory group to set new path on Government procurement

Strategic Procurement Report (Auditor-General)


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