Chapter 10 Purchasing, Asset Management, Consultants and Contracts
This chapter provides details of the ARC's approach to purchasing, assets management and its use of consultants and contracts. It includes a brief statement on the ways in which the ARC's procurement prctices support small and medium enterprises.
During the year the ARC:
- implemented the latest Australian Government financial management requirements.
During the year:
- there were changes to Australian Government procurement requirements resulting from the PGPA Act.
Purchasing AND Asset management
The ARC's approach to purchasing is consistent with the Commonwealth Procurement Rules. Detailed policy and procedures relating to procurement are also set out in the ARC's Accountable Authority Instructions (AAIs) and other specific policy and procedure guides (such as those for travel and use of Commonwealth credit cards), all of which are reviewed and updated periodically.
The Commonwealth Procurement Rules represent the Australian Government's policy framework under which agencies govern and undertake procurement. The key rules are: value for money; encouraging competition; efficient, effective, economical and ethical procurement; accountability and transparency in procurement; procurement risk; and procurement method.
The ARC Finance Section has overall responsibility for procurement within the ARC. Finance Section staff provide information and training about procurement policies and procedures as required. The ARC publishes information on proposed procurements in the ARC's procurement plan, available from the AusTender website: www.tenders.gov.au. This plan gives potential suppliers early notice of significant planned procurements for the coming year. All procurements over $10,000 are published on AusTender.
Procurement initiatives to support small business
The ARC supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance's website: www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/.
The ARC recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury's website: www.treasury.gov.au. The ARC incorporates a number of procurement practices to support SMEs, including the use of standard contract templates with clear and simple language and electronic payment systems, including credit cards, to facilitate on-time payment.
Asset management is not a significant part of the ARC's strategic business. The ARC's assets include office fit out, furniture, IT software and 'portable and attractive' equipment held at the ARC office. The ARC reviews its asset holdings annually to ensure cost effectiveness and whole-of-life asset utilisation. In 2014–15 the annual stocktake was conducted in February 2015.
Consultants AND CONTRACTS
Policy on selection and engagement of consultants
The ARC's policy on selecting and engaging consultants is set out in the ARC's AAIs and in related procurement instructions and guidance material. The ARC engages consultants primarily where there is a need for independent research or assessment or where a specialist skill or expertise is required. Consultants are engaged through a meritorious selection or procurement process.
Consultancy services are distinguished from other contracts for services by the nature of the work performed, which typically involves the development of an intellectual output that assists with agency decision-making and reflects the independent views of the service provider. By contrast, other (non-consultancy) contracts for services are typically far more restrictive in the degree of latitude afforded to the contractor. Details of contracts for services are available from the AusTender website.
During 2014–15 the ARC entered into 199 new consultancy contracts involving total actual expenditure of $5,248,938. In addition, 178 ongoing consultancy contracts were active during the 2014–15 year, involving total actual expenditure of $10,072,553. The majority of the new consultancy contracts in 2014–15 were for services relating to membership of ARC committees. Over the past three years the ARC's expenditure on consultancy contracts was:
- $2,714,027 in 2014–15
- $1,722,263 in 2013–14
- $2,929,267 in 2012–13.
Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website: www.tenders.gov.au.
Australian National Audit Office access clauses
All contracts let for goods and services during the reporting period of $100,000 or more (inclusive of GST) provided for the Auditor-General to have access to the contractor's premises.
The ARC Chief Executive Officer did not exempt any contracts from publication on the AusTender website.