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                    [post_content] => [caption id="attachment_30774" align="aligncenter" width="614"] Consult Australia is urging governments to adopt its ethical procurement policy.[/caption]

Major Australian engineering and design firms are calling on Australian governments to adopt a new policy for ethical and fair dealings with private contractors. 

The association for consulting firms in the built environment has produced a framework outlining how governments can work better with industry, as several states roll out major infrastructure agendas.

Consult Australia, which represents consulting firms in the built and natural environment sectors including major firms such as Aecom, Arcadis and Aurecon, says the new principles would ensure governments behave ethically and fairly in their dealings with suppliers.

The 14 principles cover a range of areas including contracts, fairness and risk allocation, working relationships, tendering, briefs and payment.

“We hear a lot about industry muscle but government has muscle too, through its size, stability and tremendous purchasing power,” says CEO Megan Motto.

The association argues the issue is particularly pertinent as several governments currently invest heavily in various civil and social infrastructure.

While there has been a plethora of procurement reviews by Commonwealth and state governments and the Productivity Commission in recent years, successive governments have failed to address the recommendations these inquiries have consistently put forward, Ms Motto said.

[caption id="attachment_30779" align="alignright" width="164"] Megan Motto[/caption]

“We believe we’re at a point where our desire for infrastructure development, knowing it’s something that keeps cities liveable and drives our economy, means we have to start cutting through and embedding some of these principles for efficiency,” she told Government News.

She pointed to the limited use of standard contracts currently as a key issue impacting private suppliers and contractors.

“I would suggest there is well in excess of 1,000 contract forms floating around and our industry somehow has to deal with that,” she said.

“Small businesses are particular affected as they don’t have in-house legal counsel to look at bespoke contracts and understand the risk allocation and obligations.”

Other issues raised by suppliers were contracting out legislative provisions and setting unreasonable limits of liability, she said.

“We believe these things are untenable and unreasonable, and they don’t make for a collaborative, sustainable industry.”

A 2015 report by Consult Australia highlighted taxpayers could save 5.4 per cent on the cost of projects if government and industry worked better together, she said.

“While we do not wish to give such feedback, its important governments are aware of what is taking place. At the moment there is a wall of silence: industry cannot talk to government through fear of being out of favour for future work,” she said.

The 14 principles draw on the various recent reviews into procurement, the Commonwealth’s own “model litigant policy” and the extensive work Consult Australia has previously undertaken independently.

“The key point is that if we’re looking to have more efficient infrastructure provision and more innovation in the sector then we have to do things in a different way in the future; that means we need much better partnership through the supply chain, which requires all sides to work as model parties,” said Ms Motto.

Access the 14 principles here 
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[post_title] => Governments must use procurement ‘muscle’ responsibly [post_excerpt] => Major Australian engineering and design firms are calling on Australian governments to adopt a new policy for ethical and fair dealings with private contractors. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => governments-must-use-procurement-muscle-responsibly [to_ping] => [pinged] => [post_modified] => 2018-06-22 10:05:49 [post_modified_gmt] => 2018-06-22 00:05:49 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30772 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 30554 [post_author] => 658 [post_date] => 2018-06-08 08:32:00 [post_date_gmt] => 2018-06-07 22:32:00 [post_content] => [caption id="attachment_30556" align="aligncenter" width="635"] PPPs have the best chance of success when risk is 'properly and robustly quantified.'[/caption] As Australian governments and private enterprise partners on a multi-billion dollar infrastructure pipeline, it’s incumbent we reduce the likelihood of cost overruns, writes Paul Sullivan. Australia is going through a major construction boom, undertaking projects across every state and territory to accommodate our growing population and futureproof our cities. Melbourne and Sydney metros, the Westgate Tunnel, the Brisbane Cross River Rail, the Roe 8 project in Western Australia, school precinct developments across the eastern seaboard - the list is extensive. [caption id="attachment_30568" align="alignright" width="153"] Paul Sullivan[/caption] Such large scale, transformative projects are often delivered through public-private partnerships (PPPs), which are considered a preferred procurement method for high value, high risk (HVHR) projects because of the distribution of risk across parties. But are we quantifying risk as we should? And what are the consequences for the funding and delivery of major projects? There are cases where PPPs have gone wrong and government can be left picking the pieces at the taxpayer’s expense, particularly where running costs are involved. A major principle of the PPP risk-sharing is that contingency funds can be reduced, and if an unknown cost does eventuate, the project proponents pay only the value of that cost.  This is in contrast to conventional procurement methods - such as competitive tender, construction management and shared saving contracts - where a head contractor carries most of the risk and requires a larger contingency fund. On a level playing field, the end turnout cost of a project delivered via a partnership agreement should be less than if delivered through conventional procurement methods. PPPs, like all projects, have the best chance of success when risk is properly and robustly quantified and when ownership is taken on by the party best equipped to manage the risk. However, the question of risk is often the source of cost blow-outs, project delays and public perceptions of loss of taxpayer money going to private contractors. How can this be mitigated?

Quantify all risks

Departments of treasury and finance factor in known knowns - risks that can be quantified in terms of their likelihood and potential consequence. But they only quantify, to some extent, the known unknowns, and they do not quantify at all the unknown unknowns. A known unknown risk could be adverse ground conditions, where the potential hazard can be identified, but there is no basis upon which to estimate the likelihood of the event occurring or the impact on the costs of the project if it did. Further investigation can change a known unknown to a known known, and then enable us to quantify the risk. An unknown unknown risk could be unexpected weather patterns or finding archaeological relics when excavating a site; these are risks that cannot be reasonably identified or costed.  The private sector should not be saddled by these risks, and it’s similarly unpalatable for government to be so. This is where the perception that PPPs “always blow their budgets” comes from.   For unknown unknowns, an evaluation of likelihood and consequence should be attempted, utilising benchmarking from similar works on previous projects, and the knowledge of highly experienced people. In the event of the contingent funds not being used, the reserve is retained by the financier or project proponents and does not convert to profit.  If all project proponents sought to quantify risk more fully, then this could be shared and costed more appropriately across parties in HVHR projects. A lenders technical advisory role consultant can provide an “additional set of eyes” to give confidence in the project budget.  

Allocate risk to most appropriate

Best practice risk management allocates risks to the party best able to manage it, and therefore at the least cost to the project.  But in practice, the risk often gets pushed down to the contractor and sub-contractors, who in turn include a higher contingency sum in their contracts. One reason why small contractors go out of business so often is that they’re not equipped to understand or deal with the risk when things turn pear shaped. Project proponents must ensure they are engaging suitably qualified contractors, with the wherewithal to handle the works being let, and ensure that the various risks are “owned” by the party most equipped to deal with that risk.

Thorough analysis

Too many project proponents don’t have a full enough understanding of probabilistic risk analysis and its application. While a complex process, it is worth sourcing appropriate experts to bring a fuller understanding of the risks and opportunities, throughout the life of the project. Since PPPs are a partnership between government and private enterprise, it’s up to project proponents to engage qualified specialists to facilitate risk and opportunity workshops. Professional risk workshops are the best way to counter inherent optimism bias which, if left unchecked, can lead to an overestimation of benefits. In large infrastructure projects, this can manifest as overly optimistic cost estimating, under-estimated risk consideration and a higher contingency sum. The $554 million Sydney Cross Harbour Tunnel provides an interesting example where revenue projections exceeded actual collections. This was most likely the result of optimism bias, where traffic engineers anticipated higher traffic levels, combined with government’s re-opening of certain road closures to appease public demand and causing "leakage" of traffic numbers. The failure was more about toll revenue being lower than anticipated, rather than a blow out in construction cost, but the result was the same. If all HVHR project proponents undertook probabilistic risk analysis, participated in Rrisk workshops to a greater degree, and carried the process through to project completion, the risk of large overruns would be diminished. The majority of PPPs have had good outcomes, such as the Victorian Comprehensive Cancer Centre, Melbourne City Link, AAMI Stadium and Ravenhall Prison. In these instances, it’s likely that the private proponents were some of the most experienced in the country and carried out risk analysis in the best and fullest manner, using suitably experienced and qualified contractors. As Australian governments and private enterprise partner to deliver a multi-billion dollar infrastructure project pipeline, it’s incumbent on all parties to ensure a procurement method that will keep risk pricing, or contingency funding, to a minimum and reduce the likelihood of cost overruns. PPPs are best suited to HVHR projects which are of such a magnitude that the only way to deliver them is with partnership funding. For this model to work effectively, we need to focus on appropriately defining, quantifying, allocating and costing risk.
Paul Sullivan is state director at WT Partnership, a project and cost management advisory.
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[post_title] => Are we getting risk wrong in public-private partnerships? [post_excerpt] => As Australian governments and private enterprise partners on a multi-billion dollar infrastructure pipeline, it’s incumbent we reduce the likelihood of cost overruns, writes Paul Sullivan. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => are-we-getting-risk-wrong-in-public-private-partnerships [to_ping] => [pinged] => [post_modified] => 2018-06-08 09:12:56 [post_modified_gmt] => 2018-06-07 23:12:56 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30554 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 3 [filter] => raw ) [2] => WP_Post Object ( [ID] => 30559 [post_author] => 658 [post_date] => 2018-06-05 09:35:00 [post_date_gmt] => 2018-06-04 23:35:00 [post_content] => [caption id="attachment_30564" align="aligncenter" width="590"] The sustainable procurement standard covers social, economic and environmental factors.[/caption] A year since the publication of a new global sustainable procurement standard, Jonathan Dutton looks at the impact on procurement and contract management in government and the corporate sector.
  • This is the first in a new monthly column for Government News, written by procurement specialist Jonathan Dutton, examining key issues in procurement at all levels of government in Australia.
While there’s been no formal research yet on the take-up in Australia of the new international standard for sustainable procurement, the ISO 20 400, anecdotal evidence suggests procurement professionals are increasingly aware of it. [caption id="attachment_30560" align="alignright" width="171"] Jonathan Dutton[/caption] Various procurement and contracting bodies in Australia have helped spread the word. Yet at two recent procurement conferences a straw-poll yielded miserable results. When audiences of more than 100 procurement professionals at each were asked if they had adopted the new standard in whole or in part, or even felt that it had directly influenced their organisation’s sustainable procurement policy, fewer than 10 per cent raised their hands. On the flipside, a 10 per cent take-up of a guidance document within a year might not yet be a cause for alarm. The clearest early benefit of ISO 20 400 might be the publicity value in persuading organisations that to do nothing in future is not an option.

Broad view of sustainability

The development of ISO 20 400 sought to collate a wide range of disparate examples of socially responsible and sustainable procurement activity into a single non-mandatory guidance document. The standard takes a wider scope for sustainable procurement beyond sustainability in its narrowest definition of environmentalism. In fact, the term sustainability now envelops social (good), economic (development) and environmental (improvement) factors.   This approach was a natural result of garnering input from 52 countries and 1,000 people who contributed over a two-year period. Australia was a key part of the process and the eclectic Sydney committee, which included NSW Government, consultants, practitioners, companies, not-for-profit organisations and professional bodies had a significant input. Subsequently, those Sydney members have championed the new standard and set up a website as a free reference. They seem to have made a difference within their spheres of influence. Critics of the new standard complain it is overlong, overreaching, overly detailed and overambitious. Champions retort it needs to cover the breadth of both practice and theory to remain relevant in future and, crucially, offer something of the how as well as the why of socially responsible and sustainable procurement. Advocates also say it must be consistent with other standards and initiatives around the world, even with the intent of potential future laws; Australia is expected to enact its own Modern Slavery Act and many expect procurement to play a lead role in this area.

Prior good practice

There are many examples of good practice in sustainable and socially responsible procurement that existed well before the new standard was formed. The Victorian Level Crossing Removal Authority’s social procurement policy is held up as an example that delivers a wide range of benefits. Key projects at Australia Post and Rio Tinto that started as supply side corporate social responsibility initiatives have subsequently delivered material business benefits. In the case of Australia Post it’s been recyclable uniforms with predestined outlets, while for Rio Tinto it was the boring of water wells in Mauritanian villages to improve health of local support workers. [caption id="attachment_30566" align="alignright" width="235"] Many organisations have adopted a form of social procurement.[/caption] Many organisations have now adopted some form of social procurement policy. Most were largely in train before the new standard was published, although drafts were widely available in the two years previous. Corporate companies have adopted supply side corporate social responsibility policies because of conviction, shareholder and staff pressure, brand positioning theory, customer preference or post-crisis after a major supply chain shock. However, how well these new policies have gained traction is not always clear. Similarly, government jurisdictions and agencies usually have sustainability policies, often influenced by government policy at federal or state level. The NSW Government is finalising its own sustainable procurement policy framework, although it is unclear how closely this might or might not be aligned to ISO 20 400. The Commonwealth procurement rules apply to federal government buyers. But they are often reflected in other jurisdictions such as state governments, public agencies and even local councils. And these are more influential in the private sector than given credit for. These were implemented in July 2015, well before the new standard was launched, although revisions to Commonwealth’s rules have been subsequently implemented – as recently as January. The Department of Finance, which administers the Commonwealth’s procurement rules, points out they are broadly consistent with the principles behind ISO 20 400 and that they “allow for the consideration of a range of social and sustainability factors when undertaking a procurement.”

Taking stock

Perhaps naively, some practitioners and analysts felt that ISO 20 400 would be a real catalyst for change, that procurement professionals might use it as a lever to drive broader and deeper sustainability initiatives – even down the length of the supply chain, the holy-grail of sustainable procurement.    Some supply chains have no choice but to clean up; their core business is driven by a vulnerable supply chain, which ironically can make it easier to change. Often it’s sparked by a visible issue or incident – such as child labour becoming evident within a high-tier supplier, or a major producer of smartphones allegedly exploiting workers. It’s not easy mapping 17 tiers down the supply chain from your local 7/11 service station back to the Ivory Coast fields where the coca-beans are picked to make certified chocolate – like Fair Trade did. But not everyone has to take on that sort of commitment or budget to improve the impact of a singular global supply chain.

Bottom-up momentum

Individuals in key procurement roles seem increasingly keen to drive their own initiatives where possible – whether they are directly or indirectly relevant for their organisations. These (sometimes almost random) initiatives fly because they are broadly consistent with stated corporate intent from the top, more than hard policy or practical strategy. And, they are difficult to deny. Indeed, many good sustainable procurement initiatives seem almost coincidental to corporate policy, rather than driven by it. The staff seem to take a lofty mandate from the boss and turn it into action. Ultimately, it appears the top-down intent of both public departments and corporates is often currently driven more by bottom-up individual employee activism than by departmental or corporate leadership. More work to do then, in order to match top-down policy with bottom-up enthusiasm. But it’s still early days; why not start by drafting your own department’s sustainable procurement policy?
Jonathan Dutton, an independent management consultant specialising on procurement, was the founding CEO of CIPS in Australia from 2004 to 2013. 
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[post_title] => Sustainable procurement: bottom-up efforts gain momentum [post_excerpt] => SPECIAL FEATURE: A year since the publication of a new global sustainable procurement standard, Jonathan Dutton looks at the impact on procurement and contract management in government and the corporate sector. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => sustainable-procurement-bottom-up-efforts-gain-momentum [to_ping] => [pinged] => [post_modified] => 2018-06-08 09:13:32 [post_modified_gmt] => 2018-06-07 23:13:32 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30559 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 30413 [post_author] => 674 [post_date] => 2018-05-25 08:05:02 [post_date_gmt] => 2018-05-24 22:05:02 [post_content] => [caption id="attachment_30415" align="aligncenter" width="609"] NSW's policy tackles barriers to government supply chains for Aboriginal businesses, experts say.[/caption] Experts have praised the Berejiklian Government’s new indigenous procurement policy but caution effective implementation and broader efforts to nurture businesses are crucial. Three per cent of the NSW Government’s goods and services contracts will be offered to Aboriginal owned businesses under the state’s new Aboriginal Procurement Policy, which the government says will support 1,000 Aboriginal jobs a year over three years. Given it spends $20 billion each year on goods and services contracts, Premier Gladys Berejiklian said the State Government was in a unique position to offer practical support for the creation of Aboriginal employment. “These jobs could include electrical services, catering, recruitment and landscaping,” she said while launching the policy last week. Under the changes, government agencies will be able to procure goods and services up to $250,000 directly from Aboriginal businesses, an increase on the current limit of $150,000. The policy will also see procurement activities over $10 million required to “consider” employment opportunities for Aboriginal people and engagement of Aboriginal businesses. For the first time, the government says it will track the number of jobs supported through the policy in addition to the number of contracts awarded.         

Substantial policy: expert

[caption id="attachment_30449" align="alignright" width="149"] Michelle Evans[/caption] Michelle Evans, an academic and partnership broker who leads research on indigenous business at the Asia Pacific Social Impact Leadership Centre, welcomed the policy, saying it appeared to tackle the barriers to government supply chains facing Aboriginal businesses. “It follows the Federal Government’s great work in the indigenous procurement policy space, which has seen so many businesses come into the supplier chain of the government at the federal level,” she told Government News. Dr Evans said that efforts to boost Aboriginal businesses would lead to job creation:
“We know that Aboriginal businesses are 30 per cent more likely to employ Aboriginal and Torres Strait Islander people.”
However, she said there were many different types of Aboriginal businesses and not all would benefit from a procurement policy, which means governments need to think of other ways of providing support. “A lot of Aboriginal businesses, particularly the business-to-customer enterprises, are delivering cultural products and services, and they are doing it really tough. We can’t forget about these other types of businesses,” she said.

Implementation and monitoring is key

Jo Barraket, director of the Centre for Social Impact at Swinburne University, praised the policy’s inclusion of key targets. [caption id="attachment_30439" align="alignright" width="150"] Jo Barraket[/caption] “The research we’ve done in the past on social procurement suggests the only context in which there’s any semblance of success is where there’s concrete goals,” she told Government News. Recent work had highlighted a concerning lack of follow-up monitoring or evaluation of the outcomes of social procurement practices internationally, Professor Barraket said. “It’s terrific to have governments in Australia, NSW now being one of them, saying they’re going to commit to doing that work.” Professor Barraket said that while good policy is welcome, effective implementation is critical.
“What we know about procurement is that having the policy isn’t enough. Policy commitments like these require implementation and that often involves changes to systems and culture within government agencies. That’s what is needed; its policy plus implementation.”
Commenting on indigenous procurement policies more broadly, Professor Barraket cautioned governments to be aware of potential unintended consequences. “It’s reminiscent of some predatory practices that emerged when mining licences regulations changed about a decade ago to commit mining companies to stronger local economic development. We’re starting to hear anecdotal information about large firms building effectively shell companies in Aboriginal communities and embedding those in their supply chains in order to meet targets,” she said. Australia was fortunate to have Supply Nation as an intermediary given it undertakes a lot of the certification and due diligence work, Professor Barraket added.  "That said, there’s still scope for some predatory practices to emerge.”
Related GN coverage: Social enterprises an untapped partner for councils
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[post_title] => NSW Government boosts Aboriginal procurement [post_excerpt] => Experts have praised the Berejiklian Government’s new indigenous procurement policy but caution effective implementation and broader efforts to nurture businesses are crucial. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nsw-government-boosts-aboriginal-procurement [to_ping] => [pinged] => [post_modified] => 2018-05-25 10:02:44 [post_modified_gmt] => 2018-05-25 00:02:44 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30413 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 30359 [post_author] => 674 [post_date] => 2018-05-21 09:42:14 [post_date_gmt] => 2018-05-20 23:42:14 [post_content] => [caption id="attachment_30360" align="aligncenter" width="659"] NSW is applying the principles of digital transformation to procurement, Dawn Routledge tells CeBIT.[/caption] A new procurement platform to be launched on 31 May is part of a broader approach to making it easier to do business with the NSW Government, its most senior ICT executive says. The NSW Government’s buy.nsw procurement platform, which is to be launched at the end of this month, aims to “take the friction out of connecting buyers and sellers,” according to Dawn Routledge, acting government information and digital officer. But it also signals how the State Government is trying to “apply the principles of digital transformation to procurement processes,” she says, adding the aim is to have robust but faster on-boarding for vendors and single registration to sell to different government agencies. In addition, the government’s digital.nsw website creates visibility around the pipeline of digital projects and activities across government, “which again is something our suppliers often talk about,” Ms Routledge told the CeBIT conference last week. “There are nearly 150 projects accessible via that site,” she said. During consultations on ways to nurture innovation, industry said it wanted more of an opportunity to help solve problems confronting government, Ms Routledge said. “In other words, put the problems to market and tap into the innovation in the supply chain and the start-up space.” That prompted the government to launch its innovation challenges in which a range of stakeholders including researchers, non-government agencies, corporates and start-ups pitch ideas to help tackle social challenges. One of these is the youth employment innovation challenge, which seeks to find new ways to help young people aged 15 to 24 to find work. “We’ve had 30 applicants who have been shortlisted. There was a pitch session earlier in the month and from that process we’ll identify the strongest ideas and then we’ll start supporting them through an incubation process,” she said. The program ran twice last year with challenges seeking new ideas on accessible cities and ways to reduce domestic violence reoffending rates. One of the ideas that came through the domestic violence challenge is now at pilot stage and had been garnering interest from other areas, Ms Routledge said. [caption id="attachment_30361" align="aligncenter" width="636"] The digital.nsw website outlines the pipeline of projects.[/caption]

Digital licences

Elsewhere, the NSW Government is now moving to roll out digital driver licences across the state following a trial in Dubbo that has seen 1,400 take part since November. Some 140,000 digital licences have been issued since the government started its digital licences work in 2016 in areas such as fishing, boating and responsible service of alcohol, Ms Routledge said. Last Monday the NSW Government confirmed it will introduce legislation into parliament this month to enable state-wide rollout of digital driver licences.   
More from the CeBIT conference: 
[post_title] => NSW looks to market for solutions to wicked problems [post_excerpt] => A new procurement platform to be launched on 31 May is part of a broader approach to making it easier to do business with the NSW Government, its most senior ICT executive says. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nsw-looks-to-market-for-solutions-to-wicked-problems [to_ping] => [pinged] => [post_modified] => 2018-05-25 10:03:36 [post_modified_gmt] => 2018-05-25 00:03:36 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30359 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [5] => WP_Post Object ( [ID] => 30328 [post_author] => 675 [post_date] => 2018-05-18 10:43:59 [post_date_gmt] => 2018-05-18 00:43:59 [post_content] => [caption id="attachment_30329" align="aligncenter" width="620"] Angus Taylor discusses plans to reduce cyber incidents to zero at CeBIT yesterday.[/caption] Cyber Security Minister says all governments must work together to abolish cyber threats, while a leading cyber-defence CEO points to managing risk in the supply chain as a key issue. The Minister for Cyber Security Angus Taylor says the Commonwealth will work to reduce cyber threats to zero through a focus on critical IT infrastructure, collaborating with the private sector, tackling cybercrime and raising public awareness. Minister Taylor said that collaboration with the private sector “will be a major theme in the coming months” as part of a broader bid to tackle cybercrime nationally and within the federal government which he says “starts with the way we invest and procure.” “The collective power of agencies is critical. It is clear that government can’t succeed on this alone, we need to work across all agencies in the federal government, the state and local government, the private sector and international agencies and governments if we want to succeed,” he told the CeBIT conference yesterday.  The sophistication of cyber threats was a key topic at the conference, with Minister Taylor pointing to the global and pervasive nature of threats. “It’s clear to me that if we’re facing adversaries that are increasingly global, well-organised and adept that we have to combat them with the exact same capabilities,” he said. The move follows a series of measures aimed at tackling cyber threats, including the opening of the Home Affairs ministry, which Minister Taylor said aimed to encourage an inter-departmental approach, as well as the new 24/7 cyber security centre in Canberra.

CEO: minimising risk in the supply chain

Symantec CEO Greg Clark told the Sydney audience that tackling cyber attacks within supply chains is “one of the most relevant things” currently on his desk, saying the industry is at its highest risk level in decades. A recent Symantec report found a 200 per cent spike in software supply chain attacks, where attackers inject malware implants into the supply chain to infiltrate unsuspecting organisations. These breaches are often sub-tier suppliers of critical IT components or software within systems or products. [caption id="attachment_30330" align="alignright" width="300"] Symantec's CEO Greg Clark speaking yesterday.[/caption] Speaking to Government News on the sidelines of the event, Mr Clark said that managing risks in outsourced IT infrastructure and through the supply chain was a key  issue. When asked how the Australian Government can minimise risk in the supply chain through procurement, he recommended a risk framework to “buy risk down and lay risk off.” “With a risk framework we can assign accountability to the operators to effect change that reduces that risk," he said. In 2014, the United Kingdom introduced legislation to improve procurement processes within government by mandating a new cyber security standard for suppliers. The standard, which offers two levels of assurances, means all organisation must comply with the standard if bidding for government contracts. According to Mr Clark, negotiating terms with suppliers in the procurement process is another crucial standard to mitigate cyber risks. “I always tell people to be careful when you push seriously low risk terms on your supplier because it only takes one of those to put it out of business and if they’re doing it with hundreds of companies that’s risky,” he said.

New report: spike in government attacks

Meanwhile, a report released yesterday claims the government sector is the fourth most vulnerable to cyber attacks, suffering 13 per cent of all known cyber attacks over the past year, up 5 per cent from the previous year. Findings from Dimension Data’s NTT Security’s Global Threat Intelligence Report 2018 found an increase in cyber attacks targeting the supply chain. Mark Thomas, the group's CTO for cybersecurity, said supply chains are becoming increasingly vulnerable to cyber threats. “There are numerous moving parts to supply chains and outsourcing companies, which often run on disparate and out-dated network infrastructures, making them easy prey to cyber threat actors. Service providers and outsourcers are also a prime target, due to their trade secrets and intellectual property," he said. The report found that while Australia is a frequent target, it’s also a major source of attacks. It found that 66 per cent of attacks on the financial sector in the Asia Pacific region originated from Australia.
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[post_title] => Cyber security: collaboration key as government sets sights on zero risks [post_excerpt] => Cyber Security Minister says all governments must work together to abolish cyber threats, while a leading cyber-defence CEO points to managing risk in the supply chain as a key issue. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => cyber-security-collaboration-key-as-government-sets-sights-on-zero-risks [to_ping] => [pinged] => [post_modified] => 2018-05-18 10:44:26 [post_modified_gmt] => 2018-05-18 00:44:26 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30328 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [6] => WP_Post Object ( [ID] => 30243 [post_author] => 674 [post_date] => 2018-05-11 09:08:28 [post_date_gmt] => 2018-05-10 23:08:28 [post_content] => [caption id="attachment_30245" align="aligncenter" width="650"] More than 80% of the budget's transport spending is on roads, analyst says.[/caption] The Commonwealth should link its budget's infrastructure investment to its innovation agenda to ensure new technologies are used to reduce construction and maintenance costs, analysts say. Given the budget’s injection of $24.5 billion for major roads and rail infrastructure, the private sector and universities should work closely with federal and state governments to ensure the skilled workforce required to deliver the landmark projects can be trained locally. That’s according to Dr Behzad Fatahi, an associate professor of civil engineering at The University of Technology Sydney who said the new funding should be tied to the government’s innovation agenda. [caption id="attachment_30249" align="alignright" width="110"] Behzad Fatahi[/caption] “Federal government should try to link the national innovation and science agenda with these new infrastructure investments to ensure smart ideas and new technologies will be proposed and used to reduce the construction and maintenance cost of transport infrastructure, to ensure projects are viable,” Dr Fatahi said. Smarter, more efficient ways of constructing and maintaining large-scale infrastructure is needed given maintenance cost of transport infrastructure has been increasing, he said. “For example, over the past five years, the expenditure for local road maintenance has increased by $97 million.” At the same time disruption to infrastructure systems can cause tremendous challenges for society, such as a significant reduction in the freight capacity of roads and railway lines and delayed commuter access to ports, airports, industrial areas and business precincts, he said. “Therefore, Australian industries together with research organisations should focus their research and development efforts on developing efficient construction technologies to reduce future maintenance cost of transport infrastructure, so the return on investment on the upcoming projects could enhance," Dr Fatahi said.

Spend on roads

While the budget funding for rail projects is welcome, it does not go nearly far enough to meet the challenges facing the country, especially the cities where most Australians live, according to Dr Ian Woodcock from the Centre for Urban Research at RMIT University. He said: 
"Roads represent about 84 per cent of the transport project funding, far more should be going to rail where we are playing catch up for an advanced economy.”
A funding program for comprehensive, integrated transport planning is needed more than support for project-based business cases for politically-driven road projects, he said. "The ‘up to $5 billion’ for airport rail for Victoria comes with strings attached that may re-ignite the political differences that have stalled this link for several decades," Dr Ian Woodcock said. 

Key projects

Budget papers show that the key rail infrastructure projects among the $24.5 billion of new funding include:
  • up to $5 billion for construction of a rail link to the Melbourne Airport
  • $1.1 billion towards further components of Perth's METRONET program
  • $400 million to duplicate a section of the Port Botany Rail Line
  • $390 million for the upgrade of the Beerburrum to Nambour Line on the Sunshine Coast
  • $300 million for the Brisbane Metro project
  • $220 million for the electrification of the Gawler Line in northern Adelaide.
The major urban and regional road projects include:
  • $1 billion for the M1 Motorway corridor
  • $3.3 billion for the Bruce Highway in Queensland
  • $1.4 billion for Adelaide's North–South Corridor
  • $971 million to build the Coffs Harbour Bypass on the Pacific Highway in NSW
  • $1.75 billion for the new North East Link in Melbourne
  • $560 million to deliver Stages 2 and 3 of the Bunbury Outer Ring Road in WA
  • $280 million for regional road works in the NT
  • $461 million to build a new Bridgewater Bridge in Hobart.
Minister for Infrastructure and Transport Michael McCormack said that strong governance arrangements linked to funding commitments would ensure value for money on the projects while the Commonwealth would “continue to press the states and territories to provide their fair share of funding”. “The government also remains committed to exploring every opportunity for private sector involvement to help reduce the cost on hard-working Australians,” he said.

Industry reaction 

Denita Wawn, CEO of Master Builders Australia, welcomed the budget's infrastructure spend. "The additional $24 billion investment in infrastructure across the country will boost the productivity and liveability of our cities,” she said The Green Building Council of Australia said the Federal Government must continue to make "future-focused infrastructure investments" to ensure the livability of towns, cities and communities remain livable. Jonathan Cartledge, the council's head of public affairs, said the attention on urban congestion hot spots backed by $1 billion in funding is welcome and should be part of a broader strategy to support better urban design outcomes.
Related GN budget coverage:
[post_title] => Budget: transport infrastructure spend needs 'smart ideas' [post_excerpt] => The Commonwealth should link its budget's infrastructure investment to its innovation agenda to ensure new technologies are used to reduce construction and maintenance costs, analysts say. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => budget-transport-infrastructure-spend-needs-smart-ideas [to_ping] => [pinged] => [post_modified] => 2018-05-11 10:50:41 [post_modified_gmt] => 2018-05-11 00:50:41 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30243 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [7] => WP_Post Object ( [ID] => 30121 [post_author] => 675 [post_date] => 2018-04-30 16:52:07 [post_date_gmt] => 2018-04-30 06:52:07 [post_content] => [caption id="attachment_30117" align="aligncenter" width="505"] The Seed Women group funded by the WA Government’s Ranger Program.[/caption] An indigenous ranger employment program in remote south-western Australia is tackling rural unemployment while rehabilitating native plants through traditional indigenous agricultural techniques. Under the program, announced last week by the West Australian Government, 12 indigenous Noongar people will be recruited by the government. West Australian Minister for the Environment Stephen Dawson says the ranger program, a first for the state government, will deliver on cultural, environmental and economic outcomes. “This will be an integral step towards improved community wellbeing and health, reducing poverty and cycles of dependency through economic opportunities and building leadership in remote and regional communities.” The 12 new positions are part of the West Australian Government’s broader $20 million five-year program to create 85 new jobs and 80 training opportunities, including 47 female ranger jobs, for indigenous rangers across Western Australia.

'The Seed Women'

Rehabilitating native plants on land destroyed by mining and dispersing culturally significant Arnhem seeds are some of the initiatives to be undertaken by the Ninyma Uninypa “Seed Women” in the Central Desert, one the groups funded by the State Government program. Earlier this year the group worked on dispersing seeds of the Quandong tree, a native indigenous plant that was used as a food source for thousands of years and features heavily in indigenous mythology but has been progressively destroyed by the local camel population. Samantha Doudle, program coordinator of the Seed Women program, said the initiative is crucial to addressing rural unemployment and facilitating intergenerational exchange of indigenous agricultural knowledge. She told Government News: 
“A lot of the ranger programs are in extremely remote places where the people have an intimate knowledge of the land, plants and animals, so it’s just the most logical thing on earth that one of the main employment opportunities should be looking after these huge strips of land on behalf of future generations.” 
As part of the program the Seed Women will be trained by the Department of Biodiversity, Conservation and Attractions in plant identification, drying and storage and germination while also using traditional indigenous techniques to help rehabilitate native plants.

Closing the employment gap

Western Australian’s program is one of the latest initiatives that aims to address the longstanding under-representation of indigenous people in the public sector. [caption id="attachment_30118" align="alignright" width="198"] One of the Seed Women at work.[/caption] Earlier this year the West Australian Public Service Commission released itsi employment strategy, citing a commitment to a 3 per cent growth in Indigenous employment in the public sector by 2018, up from 2.6 per cent currently. Professor Ken Smith, CEO of the Australia and New Zealand School of Government, said that recognising the value of indigenous culture and knowledge is crucial to improving Indigenous representation in government. “Without listening to Aboriginal and Torres Strait Islander peoples and working with them to design and deliver policy we will never be able to close the gaps between Indigenous communities and the rest of Australia.” Improving employment pathways and economic outcomes for indigenous people relies on procurement and employment programs, says the Western Australian Public Sector Commission. “The Western Australian public sector employs approximately 138,000 people, which provides the opportunity to make a significant contribution towards providing career opportunities for Aboriginal people, while building a capable workforce that is both diverse and inclusive,” it said. Ms Doudle says that similar ranger programs should be mirrored in other states, so that states and local government are encouraged to work closely with Indigenous communities to create employment opportunities. The next round of funding for the second phase of the Indigenous Ranger Program will be available in 2019.
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[post_title] => Aboriginal ranger jobs a boost for native land conservation [post_excerpt] => An indigenous ranger employment program in remote south-western Australia is tackling rural unemployment while rehabilitating native plants through traditional indigenous agricultural techniques. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => aboriginal-ranger-jobs-a-boost-for-native-land-conservation [to_ping] => [pinged] => [post_modified] => 2018-05-01 11:54:10 [post_modified_gmt] => 2018-05-01 01:54:10 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30121 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [8] => WP_Post Object ( [ID] => 29881 [post_author] => 674 [post_date] => 2018-04-13 09:05:29 [post_date_gmt] => 2018-04-12 23:05:29 [post_content] => [caption id="attachment_29891" align="aligncenter" width="520"] Staff at Helping Hands, one of the social enterprises established by Community Resources.[/caption] New paper finds ‘social procurement’ could enable local governments to achieve efficiencies in core service delivery while helping community enterprises realise development goals. In a region like the Great Lakes in NSW, which has markedly higher rates of unemployment and part-time work and lower youth workforce participation than the state average, an organisation that provides jobs for local people experiencing disadvantage has been making a tangible difference. Community Resources, a not-for-profit community development organisation, has established social enterprises that employed more than 280 people in 2017 - many of them Aboriginal people experiencing disadvantage, the long-term unemployed, people experiencing homelessness, those living with a disability and ex-prisoners. Crucially, through a relationship with its local government, Mid-Coast Council, the organisation is contracted to deliver a range of services in community care and waste management. It’s this council business that has helped Community Resources to grow into a national organisation with a turnover of $15 million in June 2017, of which $11 million went into wages focused in high unemployment areas such as Forster Tuncurry, where 140 staff are currently employed. It’s also exploring new ventures in areas experiencing similar disadvantage, such as the Illawarra of NSW. Over 80 per cent of the organisation's income was generated by its community enterprises that include Resource Recovery Australia, which operates re-use shops, transfer stations and sustainability workshops in partnership with councils; Helping Hands, a provider of respite and domestic assistance for seniors; and Soft Landing, which diverts waste mattresses from landfill across NSW, the ACT, Western Australia and Victoria. [caption id="attachment_29885" align="aligncenter" width="570"] Workers at Soft Landing, an entity acquired by Community Resources in 2015[/caption] The organisation is featured as a case study illustrating the benefits of partnerships between social enterprises and local governments in a forthcoming book, Social Capital and Enterprise in the Modern State. “There are more and more social enterprises appearing in Australia, and many of them are starting to establish relationships with local government, but not as much as they could,” Catherine Hastings, the chapter’s co-author and a PhD candidate in the sociology department of Macquarie University tells Government News. Some of the benefits of these partnerships include greater community consultation and participation, decentralised decision-making and local economic and social development.

Barriers to partnerships

[caption id="attachment_29896" align="alignright" width="121"] Catherine Hastings[/caption] But Ms Hasting’s analysis also highlights the barriers preventing more social enterprises from building relationships with local government. These can include a lack of awareness within councils of what these organisations can do, concerns about governance and a lack of trust. “Experience at the national level has demonstrated how hard it is for new or smaller social enterprises to gain a foothold with councils,” said Ms Hastings, a former research officer in the Centre for Local Government at UTS. A key challenge for social enterprises is to effectively convey how they can support local governments’ core operational objectives while also bringing about positive social outcomes. In an era when local governments must deliver on an ever-expanding list of functions, Ms Hastings advocates for councils to consider social enterprises as another potential partner in service delivery.

Delivering core services and local development

“The Community Resources example demonstrates that a council can support a social enterprise to capitalise on business opportunities – in this case, provision of waste management and care for an ageing population – in order to realise community development goals, like jobs for disadvantaged people. “There’s that parallel for local government in terms of core service delivery and community development; this can be a way of doing both at the same time,” she said. If the value of social enterprises’ knowledge and connection to community was better understood by local government, and the capacity to jointly deliver solutions to local social and economic problems was subsequently embraced, then social procurement could become a more prevalent form of “public value creation” for councils, Ms Hastings argued.
Comment below to have your say on this story.
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[post_title] => Social enterprises an untapped partner for councils: analysis [post_excerpt] => New paper finds ‘social procurement’ could enable local governments to achieve efficiencies in core service delivery while helping community enterprises realise development goals. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => social-enterprises-an-untapped-partner-for-councils-analysis [to_ping] => [pinged] => [post_modified] => 2018-04-13 09:05:47 [post_modified_gmt] => 2018-04-12 23:05:47 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29881 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [9] => WP_Post Object ( [ID] => 29475 [post_author] => 674 [post_date] => 2018-03-19 11:35:15 [post_date_gmt] => 2018-03-19 00:35:15 [post_content] => [caption id="attachment_29478" align="aligncenter" width="539"] Accountability concerns surround Commonwealth procurement contracts.[/caption] Current contract arrangements often prevent consultants from being held accountable for the advice they give to government while ambiguous reporting makes it difficult to determine the value for money of outsourced work. That’s according to the Melbourne School of Government, which has told a parliamentary committee into government procurement contract arrangements that the commercial-in-confidence privileges often attached to consultants’ work has given rise to concerns about accountability and transparency. “This is different to advice provided by, for instance, a government department, which forms part of the public record,” the school says in its submission to the inquiry. Last week Government News reported on calls for the Department of Finance to carry out a detailed investigation into whether there is “systematic flouting” of the procurement rules, given the high use of government contracts below $80,000, which are not required to be put to market. The Melbourne School of Government said the way in which value for money is reported by Commonwealth agencies is not specified under procurement contracts and often remains unclear. “This means it is not possible to understand the ways in which value-for-money was assessed for specific consultant engagements, and the extent to which a particular engagement did, in fact, deliver that value.” The school also pointed out the lack of formal accreditation for becoming a consultant or professional body ensuring practitioners meet basic professional or ethical standards. “This means that there are no generally accepted rules regarding who can legitimately call themselves a consultant,” it said. The school also highlighted that more than two-thirds of the public service’s consulting work is completed by five organisations, four of these being the Big Four accounting firms. “It would be helpful to understand why exactly this is.”

Wholesale change to advice needed: expert

Dean of engagement at Griffith Business School, Professor Anne Tiernan, who has been involved in several projects examining public service capability, said successive “reforms” had eroded institutional memory and capacity for long-term thinking. “The public service ‘craft’ is endangered,” Professor Tiernan said in her submission. She argued traditional advisory models were “built for different times” and a new approach that tapped into the knowledge of various community stakeholders, of which commercial consultants were just one, was now needed. “There is great, under-recognised and often under-valued capacity and expertise at state and local government, in not-for-profit organisations, universities and research institutes, local communities and in the lived experience of citizens. The question is how to harness this capacity,” she said. Greater engagement between governments would also require a “refocussed” Council of Australian Governments, she argued:
“More than ever, policy problems are complex, cross-jurisdictional and cross-cutting. COAG is a fundamental vehicle for Australian governance. It needs structures, processes, an advisory capacity that is independent of the Commonwealth government, and administrative disciplines to match the importance of its role... COAG currently lacks the support or the strategic focus to do the job that the country needs it to do.”
Contracting will have a place but should be “more selectively used, particularly in the provision of advice,” she said.

Sub-contractors should be reported: KPMG

KPMG, which earned $620 million in government contracts from 2012 to 2017 according to the national auditor, argued it was unrealistic to expect public service to possess in-house the myriad technical skills needed to meet rising demands. Departments and agencies required specialist skills including data and analytics, artificial intelligence and business and technology transformation, it said. While only the primary organisation in a contract is currently reported, the consultancy argued that the reporting of subcontractors would provide an increased level of transparency, particularly for smaller enterprises working as part of a consortium. KPMG also proposed that AusTender should provide information on other companies and consultants that unsuccessfully tendered for a contract, and not just the winner, to provide “an additional level of transparency” to the procurement process.

Reforms have driven growth: PwC

Fellow consultancy PricewaterhouseCoopers, which said it earned $442 million in government contracts from 2012 to 2017, told the inquiry that the 2014 smaller government reforms have contributed to the growth in use of external consultants. “Underpinning the reforms was a desire for the public service to improve its ability to respond nimbly and realign its resources rapidly to address changing priorities, and manage costs,” PwC said in its submission. It also argued that the use of consultants delivered value for money by providing “access to specialist expertise, when required, at lower cost,” as well as facilitating the transfer of risk from government to consultants. 
Related coverage: Government’s $80,000 procurement contract threshold in focus
Subscribe to the Government News newsletter for ongoing coverage on the inquiry into government procurement.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  
[post_title] => Experts flag lack of accountability in procurement contracts [post_excerpt] => Current contract arrangements often prevent consultants from being held accountable for the advice they give to government while ambiguous reporting makes it difficult to determine the value for money of outsourced work. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => experts-flag-lack-of-accountability-in-procurement-contracts [to_ping] => [pinged] => [post_modified] => 2018-03-19 15:39:11 [post_modified_gmt] => 2018-03-19 04:39:11 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29475 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [10] => WP_Post Object ( [ID] => 29422 [post_author] => 674 [post_date] => 2018-03-13 09:35:22 [post_date_gmt] => 2018-03-12 22:35:22 [post_content] => [caption id="attachment_25246" align="aligncenter" width="461"] Last year's ANAO report on procurement contained several 'red flags', analysts say.[/caption] Inquiry hears the Department of Finance should carry out a more detailed investigation into whether there is “systematic flouting” of the procurement rules. The high use of government contracts below $80,000, which are not required to be put to market, could be a breach of procurement rules and warrants investigation, a parliamentary inquiry has been told. In addition to the “disproportionate” number of contracts just below the $80,000 threshold, the significant awarding of these contracts to the same entities is another “red flag,” analysts have told the Joint Committee of Public Accounts and Audit inquiry into government procurement contract reporting. The Grattan Institute said the Australian National Audit Office report late last year, which sparked the committee's inquiry after estimating the government spent $47 billion on contracts last year, identified “examples of contracting behaviour consistent with agencies avoiding the additional rules” including requirements to approach the market for procurements over $80,000. Since 2012-13 there have been more than 1,500 ‘contract pairs’ – contracts by the same entity for goods or services from the same supplier in the same quarter individually worth less than $80,000 – where neither contract was put to open tender, the institute noted in its submission to the inquiry. “Splitting contracts to avoid these requirements is prohibited under the procurement rules,” wrote the institute’s Danielle Wood and Lucy Percival. They argued the Department of Finance should use the ANAO report as a basis for more detailed investigation of whether there is systematic flouting of the procurement rules. “The department should conduct such a review annually, using the types of screens for potential non-compliance set out by the ANAO,” they said. Similarly, the McKell Institute’s executive director James Pawluk said the ANAO had identified “a disproportionate number of contracts valued just below $80,000” and the significant occurrence of multiple such contracts with a single entity. “This raises concerns about possible deliberate attempts to avoid the additional rules imposed on procurements above that threshold, but it could also be that during the fulfilment of some contracts additional requirements were identified that are outside the scope of the initial contract,” he said.

Accountability on timing, cost overruns

The Grattan Institute said another red flag in the ANAO report was the increase in contracts commencing in June, which might reflect public servants aiming to spend their budget for the year so as to maintain their allocation in future years. “This type of ‘use-it-or-lose-it’ mentality risks diverting focus from the requirements to ensure value for money, as set out in the procurement rules,” it said. It also flagged the “limited public accountability on timing and cost overruns for government contracts” in the current system. “Cost and time overruns are common in these contracts. The ANAO report showed that 17 per cent of non-Defence contracts were amended for one or both of value and end-date within 12 months. Where value was amended, it was increased by more than 50 per cent on average. And the average time extension was more than six months.” The institute cited its own analysis on overruns on transport infrastructure projects for the past 15 years that showed they cost 24 per cent more on average than initially estimated.

Identifying consultancy spending

Referring to suggestions that similar types of services, and services from the same providers, are classed as consultancies under some contracts but not others, the Grattan Institute said its analysis had highlighted similar issues. ‘Management advisory services’ is the largest category by value of consulting services provided to the Commonwealth yet most contracts for this category are not classified as consulting, the think tank said. “This reinforces the concerns articulated by the ANAO about the identification of consulting expenditure by agencies,” the institute said. It pointed out the value of consulting contracts for 2016-17 was revised downwards by $180 million since the ANAO report was released last December, highlighting the "inconsistency in the identification of consulting." 
“The June 2017 AusTender data specified Commonwealth Government agencies entered into $681 million value of consulting contracts in 2016-17... But the most recent AusTender data shows the value of consulting contracts was only $499 million for 2016-17.”
The Grattan Institute said that some contracts were clearly re-classified in the database as general contracts rather than consulting spending. Many appeared to be Department of Defence contracts for engineering services and building construction and maintenance services. “The Department of Finance should audit compliance with the definition, and use the findings to work with agencies to improve their classifications,” the analysts said.

Improved reporting, data

Both institutes made recommendations to the committee around the need to improve procurement reporting. AusTender data in its current form “cannot provide a reliable picture of trends in government procurement spending or use of consultants,” the Grattan Institute submission said. “Improving reporting processes and compliance with existing definitions would help make the data more useful in this regard.” The McKell Institute said the inquiry should look at ways to improve the quality, timeliness and usefulness of reported data “by leveraging new IT platforms and services.” “In the ‘big data’ era, there should be opportunities to significantly improve the visibility of government contracts while reducing the administrative burden rather than adding to it,” it said.
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[post_title] => Government's $80,000 procurement contract threshold in focus [post_excerpt] => Inquiry hears the Department of Finance should carry out a more detailed investigation into whether there is “systematic flouting” of the procurement rules. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => governments-80000-procurement-contract-threshold-in-focus [to_ping] => [pinged] => [post_modified] => 2018-03-13 09:36:11 [post_modified_gmt] => 2018-03-12 22:36:11 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29422 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [11] => WP_Post Object ( [ID] => 29032 [post_author] => 673 [post_date] => 2018-02-01 13:05:31 [post_date_gmt] => 2018-02-01 02:05:31 [post_content] =>

The Federal Government’s new report on ways to boost innovation in Australia has called for more government procurement from SMEs (small and medium enterprises). Government agency Innovation and Science Australia (ISA) has released a report, ‘Australia 2030: Prosperity through Innovation’, making 30 recommendations on how to improve Australia’s poor performance in innovation. On most international rankings, Australia performs very poorly on innovation. The Government’s National Science and Innovation Agenda (NISA), announced in late 2015, is supposed to reverse the trend, but there has been little tangible action. Eight of the recommendations in the report are based on ways government policy and activity might improve innovation in Australia:
  • Create a more flexible regulatory environment that fosters innovation
  • Encourage social innovation investment across Australia
  • Improve provision and use of open government data
  • Grow Government procurement from SMEs to 33 percent by 2022
  • Increase the use of innovative procurement strategies
  • Maximise the spillover benefits of major government programs
  • Deliver greater government savings from digitising service delivery
  • Review the Public Service emphasising improved capability to innovate
The report has been criticised in many quarters for being vague and full of vague aspirations and motherhood statements, but the SME procurement target is very specific. The report says that Australian governments’ economic activity generates approximately one-third of the nation’s GDP. “There are opportunities to strategically use this expenditure to promote innovation through procurement, and to trigger more economic spillover benefits from existing major projects through strategic policy and project design choices. “Government spending on procurement is a significant market in Australia – for example, Australian Government procurement alone has grown from approximately $26 billion in 2007-08 to nearly $57 billion in 2015–16.” The reports points out that many other countries use government procurement to foster innovation and economic benefits. “The UK and US governments both run small business research or innovation initiatives as part of their procurement strategies. “Through these programs, a government department identifies a specific challenge or problem that is released to the public. Small businesses can then submit an application with their proposed solution, and over the course of multiple phases, the company has the opportunity to prototype and possibly scale their solution. “Small Business Innovation Research (SBIR) allocations in the US have led to the creation of new firms, significantly faster growth and employment, and a higher likelihood of attracting venture capital funding. “The SBIR has supported the early stages of businesses that have subsequently become global success stories, such as security firm Symantec and telecommunications equipment and semiconductor maker Qualcomm. UK firms that participate in the Small Business Research Initiative have nearly 10 percent higher job creation than average, and more than 30 percent average annual sales growth.” The report recommends the establishment of an SME procurement target of 33 percent of all government contracts (by dollar value) by 2022. It further recommends that the Australian Government Department of Industry, Innovation and Science should report on progress towards this target annually. In December the Australian National Audit Office released a major report on Federal Government procurement, which showed that only 10 percent of Federal Government procurement was from SMEs in 2016-17 (SMEs are defined as businesses with less than 200 employees. The figure had decline from 16 percent ten years earlier. It will take a significant change of attitude to reverse the trend. The ISA innovation report is available here.   [post_title] => More procurement from SMEs to ‘boost innovation’ [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => procurement-smes-boost-innovation [to_ping] => [pinged] => [post_modified] => 2018-02-09 10:48:03 [post_modified_gmt] => 2018-02-08 23:48:03 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29032 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [12] => WP_Post Object ( [ID] => 28977 [post_author] => 673 [post_date] => 2018-01-24 09:21:26 [post_date_gmt] => 2018-01-23 22:21:26 [post_content] =>

The Productivity Commission’s Report on Government Services (RoGS) contain a large section on Community Services. It breaks the sector into four categories: aged care, services for people with disabilities, child protection services, and youth justice services. It is an enormous sector, second only to health. Total Federal, state and territory government recurrent expenditure on community services was $31.2 billion in 2016‑17, around 13.9 percent of total government expenditure on services covered in RoGS analysis. Aged care was the largest contributor ($17.4 billion, , followed by services for people with disability ($7.8 billion), child protection services ($5.2 billion) and youth justice services ($0.8 billion). The Community Services section of RoGS is available here.

Aged care

The report estimates that 80 percent of older people will access some form of government funded aged care service before they die. The Federal Government funds residential aged care, home care and home support, with state, territory and local governments also funding and delivering some of these services directly. But most services are delivered by non‑government providers such as private-for-profit, religious and charitable organisations. The Australian population is ageing rapidly, with the proportion of people over 65 years projected to increase from 15.3 percent in 2017 to 21.8 percent in 2056. The report compares a large number of metrics across states and territories. One measure, the average number of hospital waiting days used by patients waiting for residential day care, varies enormously by jurisdiction. In Victoria, the average is just one day. In the ACT, it is nearly a month. The national average is 11 days. Other metrics examined include affordability, client experience, complaints received, and efficiency (cost per output unit). It is a very thorough examination.

Services for people with disabilities

The National Disability Insurance Scheme (NDIS), which is still in the process of being implemented, means this sector is in transition and many comparisons are invalid. The NDIS will largely replace the existing system of disability care and support provided under the 2009 National Disability Agreement (NDA). But not all existing NDA service users will be eligible for the NDIS, and not all specialist disability services will be rolled into the NDIS. Governments have agreed that existing service users will not be disadvantaged during the transition under ‘continuity of support’ arrangements. RoGS quotes ABS estimates of 4.3 million Australians – or 18.3 percent of the population – with a disability in 2015, with 1.4 million – 5.8 percent – with a profound or severe core activity limitation. The proportion of the population accessing disability services varies significantly by state and territory. Accommodation support is most common in South Australia and Tasmania (the two states with the oldest populations), and lowest in NSW and Victoria. Community support is highest in Tasmania and lowest in Queensland. Community access is highest in South Australia. Respite care is highest in Victoria, and lowest in Tasmania. The report looks at such things as carer health and wellbeing, employment and social participation of people with disabilities, and use of ‘mainstream services’ by people with disabilities. As with other sections of RoGS, it stops short of drawing conclusions or making recommendations, but it paints a picture of very disparate disability services provisions across Australia, with non-metropolitan areas faring worst.

Child protection services

Child protection services provide support and interventions to promote child and family wellbeing, and to protect children and young people up to the age of 17 who are at risk of abuse and neglect within their families, or whose families do not have the capacity to provide care and protection. Total recurrent funding across Australia was $5.2 billion in 2016-17, with nearly half a million children the subject of some sort of intervention. Per capita spending was by far the highest in the Northern Territory, at nearly $3,500 per child, compared to the national average of around $1,000. The Northern Territory, which has by far the highest proportion of population indigenous, is an outlier in most of the comparisons in the report.

Youth justice services

Youth justice services are responsible for administering justice to those who have committed or allegedly committed an offence while under the age of 18. In 2015-16, 11,000 children nationally were supervised by some aspect of the youth justice system. More than 80 percent were in the community, with the remainder in detention. More than 80 percent were males. With indigenous children 25 times more likely than non-indigenous to have come to the attention of various youth justice services. The greatest disparity was in Western Australia, where they were 40 times more likely to attract attention.     [post_title] => PC Report on Government Services – Community Services [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => pc-report-government-services-community-services [to_ping] => [pinged] => [post_modified] => 2018-01-30 10:13:02 [post_modified_gmt] => 2018-01-29 23:13:02 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=28977 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [13] => WP_Post Object ( [ID] => 28969 [post_author] => 673 [post_date] => 2018-01-23 14:50:19 [post_date_gmt] => 2018-01-23 03:50:19 [post_content] =>

As the old saying goes, you can’t manage what you can’t measure. Perhaps that is why the ‘Approach to performance measurement’ report is the first part of the Productivity Commission’s 2018 Report on Government Services series. This first component of the report focusses on the importance of measurement, the scope of the report, and methodology. It says that measuring the performance of government service delivery and public reporting creates incentives for better performance by:
  • helping to clarify government objectives and responsibilities.
  • promoting analysis of the relationships between agencies and between programs, enabling governments to coordinate policy within and across agencies.
  • making performance more transparent through informing the community.
  • providing governments with indicators of policy and program performance over time.
  • encouraging ongoing performance improvements in service delivery and effectiveness, by highlighting improvements and innovation.
A key focus of the Report is on measuring the comparative performance of government services across Australia various jurisdictions. “Reporting on comparative performance can provide incentives for service providers to improve performance where there is no or little competition, and provides a level of accountability to consumers, who have little opportunity to express their preferences by accessing services elsewhere.” The Report focuses on broadly defined ‘social services’, which aim to enhance the wellbeing of people and communities by improving largely intangible outcomes, such as health, education and community safety. It does this across 17 service areas and seven broad policy areas. The amounts involved are staggering, and dwarf that of individual private sector companies. Government recurrent expenditure on services in Australia is approximately $224 billion. This is s71 percent of all government recurrent expenditure, and represents around 13 per cent of Australia’s Gross Domestic Product (GDP). The largest component is health, at $96.7 billion in 2017. It is followed by childcare, education and training ($70.8) billion, and community services ($31.2 billion). All other expenditure is $25 billion. The report point out that governments use a mix of methods to deliver these services to the community: directly as services provider, by funding external providers through grants or the purchase of services, and subsidising users through vouchers or cash payments to purchase services from external providers. “As non‑government organisations are often involved in the delivery of services, funding from government may not meet the full cost of delivering a service to the community. Since the purpose of the Report is to provide information to assist governments in making decisions about the effectiveness and efficiency of government purchase or supply of services, it is confined to the cost to government. Similarly, it does not provide detailed information on general government income support. For example, the Report covers aged care but not the aged pension, and child care but not family payments. Each of the 17 service areas in the Report has a performance indicator framework. Each framework reflects the process through which inputs are transformed into outputs and outcomes in order to achieve desired objectives. Service providers transform resources (inputs) into services (outputs). The rate at which resources are used to make this transformation is known as ‘technical efficiency’. Each service area has a set of objectives against which performance is reported. The structure of objectives is consistent across service areas and has three components:
  • The high-level objectives or vision for the service, which describes the desired impact of the service area on individuals and the wider community.
  • The service delivery objectives, which highlight the characteristics of services that will enable them to be effective.
  • The objectives for services to be provided in an equitable and efficient manner.
The report has a number of ‘guiding principles’:
  • Comprehensiveness — performance should be assessed against all important objectives.
  • Streamlined reporting — a concise set of information about performance against the identified objectives of a sector or service should be included.
  • A focus on outcomes — high‑level performance indicators should focus on outcomes, reflecting whether service objectives have been met.
  • Hierarchical — high-level outcome indicators should be underpinned by lower‑level output indicators and additional disaggregated data where a greater level of detail is required.
  • Meaningful — reported data must measure what it claims to measure. Proxy indicators should be clearly identified and the development of more meaningful indicators to replace proxy indicators is encouraged where practicable.
  • Comparability — data should be comparable across jurisdictions and over time. However, comparability may be affected by progressive data availability. Where data are not yet comparable across jurisdictions, time series data within jurisdictions is particularly important.
  • Completeness and progressive data availability — aim to report data for all jurisdictions (where relevant), but where this is not possible report data for those jurisdictions that can report (not waiting until data are available for all).
  • Timeliness — data published are the most recent possible. Incremental reporting when data become available, and then updating all relevant data over recent years, is preferable to waiting until all data are available.
  • Use acceptable performance indicators— relevant performance indicators that are already in use in other national reporting arrangements are used wherever appropriate.
  • Understandable — data must be reported in a way that is meaningful to a broad audience, many of whom will not have technical or statistical expertise.
  • Accurate — data published will be of sufficient accuracy to provide confidence in analysis based on information in the Report.
  • Validation — data can vary in the extent to which they have been reviewed or validated (at a minimum, all data are endorsed by the provider and subjected to peer review by the Working Group for the relevant service area).
  • Full costing of services — efficiency estimates should reflect the full costs to government (where possible).
  [post_title] => PC Report on Government Services – Approach to Performance Measurement [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => pc-report-government-services-approach-performance-measurement [to_ping] => [pinged] => [post_modified] => 2018-01-25 08:38:41 [post_modified_gmt] => 2018-01-24 21:38:41 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=28969 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 14 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 30772 [post_author] => 674 [post_date] => 2018-06-18 16:10:10 [post_date_gmt] => 2018-06-18 06:10:10 [post_content] => [caption id="attachment_30774" align="aligncenter" width="614"] Consult Australia is urging governments to adopt its ethical procurement policy.[/caption] Major Australian engineering and design firms are calling on Australian governments to adopt a new policy for ethical and fair dealings with private contractors. The association for consulting firms in the built environment has produced a framework outlining how governments can work better with industry, as several states roll out major infrastructure agendas. Consult Australia, which represents consulting firms in the built and natural environment sectors including major firms such as Aecom, Arcadis and Aurecon, says the new principles would ensure governments behave ethically and fairly in their dealings with suppliers. The 14 principles cover a range of areas including contracts, fairness and risk allocation, working relationships, tendering, briefs and payment. “We hear a lot about industry muscle but government has muscle too, through its size, stability and tremendous purchasing power,” says CEO Megan Motto. The association argues the issue is particularly pertinent as several governments currently invest heavily in various civil and social infrastructure. While there has been a plethora of procurement reviews by Commonwealth and state governments and the Productivity Commission in recent years, successive governments have failed to address the recommendations these inquiries have consistently put forward, Ms Motto said. [caption id="attachment_30779" align="alignright" width="164"] Megan Motto[/caption] “We believe we’re at a point where our desire for infrastructure development, knowing it’s something that keeps cities liveable and drives our economy, means we have to start cutting through and embedding some of these principles for efficiency,” she told Government News. She pointed to the limited use of standard contracts currently as a key issue impacting private suppliers and contractors. “I would suggest there is well in excess of 1,000 contract forms floating around and our industry somehow has to deal with that,” she said. “Small businesses are particular affected as they don’t have in-house legal counsel to look at bespoke contracts and understand the risk allocation and obligations.” Other issues raised by suppliers were contracting out legislative provisions and setting unreasonable limits of liability, she said. “We believe these things are untenable and unreasonable, and they don’t make for a collaborative, sustainable industry.” A 2015 report by Consult Australia highlighted taxpayers could save 5.4 per cent on the cost of projects if government and industry worked better together, she said. “While we do not wish to give such feedback, its important governments are aware of what is taking place. At the moment there is a wall of silence: industry cannot talk to government through fear of being out of favour for future work,” she said. The 14 principles draw on the various recent reviews into procurement, the Commonwealth’s own “model litigant policy” and the extensive work Consult Australia has previously undertaken independently. “The key point is that if we’re looking to have more efficient infrastructure provision and more innovation in the sector then we have to do things in a different way in the future; that means we need much better partnership through the supply chain, which requires all sides to work as model parties,” said Ms Motto. Access the 14 principles here
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Procurement

nisa

More procurement from SMEs to ‘boost innovation’

The Federal Government’s new report on ways to boost innovation in Australia has called for more government procurement from SMEs (small and medium enterprises). Government agency Innovation and Science Australia (ISA) has released a report, ‘Australia 2030: Prosperity through Innovation’, making 30 recommendations on how to improve Australia’s poor performance in innovation. On most international […]

rogs comm

PC Report on Government Services – Community Services

The Productivity Commission’s Report on Government Services (RoGS) contain a large section on Community Services. It breaks the sector into four categories: aged care, services for people with disabilities, child protection services, and youth justice services. It is an enormous sector, second only to health. Total Federal, state and territory government recurrent expenditure on community […]

PC performance

PC Report on Government Services – Approach to Performance Measurement

As the old saying goes, you can’t manage what you can’t measure. Perhaps that is why the ‘Approach to performance measurement’ report is the first part of the Productivity Commission’s 2018 Report on Government Services series. This first component of the report focusses on the importance of measurement, the scope of the report, and methodology. […]