Audit office slams Morrison government entrepreneurs program

The Australian National Audit Office has severely criticised the design and management of the Department of Industry, Science, Energy and Resources government’s largest value procurement program in 2019-20.

In a scathing report tabled in Parliament, the ANAO said the $492.4 million Entrepreneurs Programme failed on most of the criteria demanded of government grant schemes.

Tenders were not treated fairly or equitably, incumbent consultant were selected for ‘partner roles’ without ‘open and effective competition’, and a ‘significant majority’ of the tenders received were not evaluated against each of the published criteria.

In particular, the audit office singled out DISER’s conduct which it said ‘fell short of the ethical requirements’ set out in the request for tender.

In the report the ANAO said: “The design and conduct of the procurement did not comply with the Commonwealth Procurement Rules (CPR) and the signed contracts are not being appropriately managed.

“In its conduct of the procurement the department did not demonstrate achievement of value for money, the core rule of the CPRs.”

The program represented 37 per cent of the total value of contracts entered into by DISER in 2019-20.

ANAO concluded that 53 compliant tender responses were received suggesting a competitive selection process, but the process was not appropriately managed.

ANAO singled out the selection of delivery partner contracts – which went to large consultant groups – for criticism.

“The contract management framework is inadequate, and the department’s approach has not resulted in contract deliverables being provided on time or required that service provision is to an appropriate standard before payments are made.

“The contracts do not include an effective performance management framework.”

ANAO recommended that the Department of Industry, Science, Energy and Resources not exercise the extension options in the awarded contracts.

A new procurement process should begin that will be completed before the existing contracts expire on 30 June 2023.

And ANAO also recommended the department ‘conducts the next procurement process in a manner that fully complies with the Commonwealth Procurement Rules’.

In response to ANAO, DISER said it ‘agrees to all of the ANAO’s recommendations and takes seriously the important issues raised’.

DIESER said: “We are also establishing a robust department-wide contract management framework, and a centralised and strengthened approach to the management of probity and conflict of interest.

“Having successfully implemented a probity framework for grants management, we are now focused on strengthening our Probity Framework to cover procurements and contracts, with a clear line of sight by the departmental executive and our internal Audit and Assurance Committee.”

Image: ANAO

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