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Key Takeaways for Ensuring Good Governance in Procurement: Insights from RSM's ACT Public Sector Event
RSM recently had the pleasure of facilitating the Governance Institute’s ACT Public Sector Event: Ensuring Good Governance Over Procurement in Canberra.
Expert insights were delivered by Department of Finance First Assistant Secretary, Andrew Danks, and Australian National Audit Office Group Executive Director, George Sotiropoulos.
Michael Shatter (Partner, Probity, Procurement and Integrity Services) also shared his experiences in working with government clients to not only uplift governance practices and provide assurance of probity during procurement activities, but work to ensure value for money outcomes was a key focus throughout the process.
The event was prompted by recent changes to the Commonwealth procurement framework, which include:
- new procurement rules;
- a supplier code of conduct; and
- the planned introduction of data sharing between government agencies in relation to significant events with suppliers.
These changes have been introduced following a government enquiry into conflict-of-interest breaches by big four consulting firms, which uncovered numerous instances of the misuse of government information.
The RSM public sector event provided an opportunity for the presenters and audience to discuss the above changes and their impact on public sector procurement in more depth, with the following being our top 3 takeaways from the day…
Key takeaway # 1: Commonwealth procurement is changing
Both speakers highlighted the shifting procurement landscape, and emphasised the need to promote competition among suppliers to achieve value-for-money outcomes while adhering to the principles of:
- efficiency
- effectiveness
- economics
- ethicality
George Sotiropoulos noted the importance of maintaining procurement hygiene during the procurement lifecycle – from strategy and planning to performance monitoring and reporting. He stressed the value of integrity, transparency and accountability, and maintaining focus on the spirit and intent of any procurement throughout its process.
Andrew Danks spoke about the importance of well-planned, fit-for-purpose procurement. He discussed the need for complex procurements to be properly resourced, and all procurements to be conducted in a way that is proportional to their risk value. The goal is to see procurement as a commercial transaction, not merely a compliance-driven exercise.
Key takeaway #2: More engagement with new suppliers
Moving away from the traditional approach of favouring entrenched or familiar options, procurement teams are being strongly encouraged to cast a wider net when engaging with suppliers. This process will involve increased and thorough market analysis, and active engagement with industry, with greater focus on removing barriers for small and medium enterprises that may not have a big brand name but could provide valuable solutions.
Andrew spoke of how Commonwealth Procurement Rules (CPRs) should be seen as a guide, not a hindrance, where dialogue with new suppliers equips the Commonwealth with quality information to ensure fair competition with established suppliers (who often have extensive inside insights).
Effective planning and early engagement with industry will allow suppliers to develop better proposals, and reduce wasted time for both parties in developing and assessing them.
Key takeaway # 3: Stronger procurement skills
As with many other areas of government and business, resource challenges are real and experienced. Enhancing procurement skills is a key focus for the Commonwealth so staff have a thorough understanding of governance practices and the confidence to manage risk – whether dealing with new providers, transitioning between providers, or managing contracts. It is important for other business areas to leverage value from procurement teams, and work with procurement as valued strategic partners with whom they can openly consult and seek guidance.
In a dynamic and challenging environment, probity advisors can also be utilised to provide additional support, particularly on how to balance governance and integrity when buyers are exploring new market opportunities to achieve the best outcomes.
Moving forward with procurement in the public sector
RSM is excited to see the continued nurturing of robust procurement practices within the public sector.
For procurement teams seeking guidance, RSM’s specialist probity and procurement group is always available to explore ways in which we can support organisations with their procurement challenges. We have extensive experience supporting public sector organisations to carry out their procurements, while uplifting teams with critical procurement and probity skills to build standalone capabilities.
Times have changed, and it is essential to know who is out there, what they have been doing, and how can it benefit you. With a focus on efficiency, effectiveness, economics and ethicality, our goal is to help our clients achieve value-for-money outcomes that are fit for purpose, conducted appropriately, and executed with due process.
FOR MORE INFORMATION
For a deeper discussion on governance and probity in procurement, contact Michael Shatter or Tranquility Clinton or your local RSM office.
