What you need to know
- The Government Procurement (Judicial Review) Act 2018 (the Act) will commence on 19 April 2019.
- Amid heightened scrutiny under the Act, agencies will need to plan ahead to ensure compliance with the relevant parts of the Commonwealth Procurement Rules (CPRs) throughout the procurement process.
- In the event of a complaint or claim, agencies will need to be in a position to demonstrate compliance with the relevant provisions for procurements subject to the Act (covered procurements).
What you need to do
- Proper record keeping will assist agencies to respond to, and defend, complaints and claims under the Act.
- Agencies should be mindful that they may be compelled to produce, or may need to rely on, procurement documentation in legal proceedings.
Procurement projects, large and small, share a common goal - to run an efficient, effective, economical and ethical process that achieves the procurement objectives. But a goal without a plan is just a wish, and it has never been more important to spend time in the planning phase.
The procurement strategy
Agencies should dedicate sufficient time in the procurement schedule to develop and document a procurement strategy that takes into account the operation of the Act on covered procurements. Agencies should seek appropriate advice at this early stage to ensure a "compliance by design" approach to the procurement.
The procurement strategy should balance the objectives and constraints of the procurement and map a way forward that complies with the CPRs and mitigates risk.
Agencies should pay particular attention to the following requirements in the planning stage, which are all relevant CPRs for the purposes of the Act:
- the requirement to encourage competition through non-discriminatory behaviour
- the requirement to accurately estimate the value of the procurement
- the use of AusTender to publish open tenders
- the conditions for a limited tender
- the minimum time limits for open tenders
Reasons for decisions made in the planning stages about these requirements should be clearly recorded.
Additionally, the planning stages of the procurement should address how any complaints received under the Act will be handled, and who will handle them, as such complaints may be received before the tender closing time and before any evaluations are commenced or completed.
Public interest certificates
As part of the procurement strategy, agencies should consider whether the procurement might be a candidate for a public interest certificate.
An accountable authority of an agency, or their delegate, may issue a public interest certificate for a procurement where they consider it would not be in the public interest to suspend the procurement while an application for an injunction is being considered or while a complaint is being investigated. In this way, a public interest certificate provides protection against delay caused by the operation of the Act.
Officials should be aware that a decision to issue a public interest certificate will be a decision under an enactment, and so is likely to be reviewable under the Administrative Decisions (Judicial Review) Act 1977, or section 39B of the Judiciary Act 1903.
Further guidance is expected to be provided by the Department of Finance to assist agencies about when to issue a certificate.
Approach to market documentation
Agencies should take steps to ensure that their approach to market documentation includes the details required by the relevant parts of the CPRs for the purposes of the Act, including:
- the request documentation must include all information necessary to permit potential suppliers to prepare and lodge submissions
- where the agency is undertaking a multi-stage procurement, the initial approach to market must include the evaluation criteria for each stage of the procurement
- the information required to be included in request documentation, as set out in Division 2
Keeping proper records
The requirement to keep thorough and accurate records of procurement processes and decision making is not new. However, the requirement to maintain a level of documentation commensurate with the scale, scope and risk of the procurement is now a relevant CPR for the purposes of the Act.
At a practical level, the ability of agencies to respond to complaints under the Act within the tight statutory time frames will depend in large part on the availability of clear and accurate records, as well as a sound base of corporate knowledge.
Agencies should keep thorough records of procurement decision making. This is particularly important for decisions about the application of relevant CPRs, which could be subject to challenge under the Act. This includes decisions about:
- the satisfaction of the conditions for a limited tender
- the selection of conditions for participation
- late submissions
- receipt and opening of submissions
- awarding contracts (for open tenders)
Privileged communications
As with any commercial transaction that moves into a dispute phase, where proceedings are commenced under the Act, agencies may be required to produce documents relating to the procurement, and may need to rely on those documents themselves in defending any litigation.
A communication may be privileged, and therefore inadmissible and protected from disclosure to the other parties to proceedings, if the dominant purpose of the communication is to provide or obtain legal advice (sometimes called "advice privilege"), or the provision of legal services relating to court proceedings (sometimes called "litigation privilege").
Certain actions may waive privilege, such as broad disclosure of the communication. Agencies should put in place processes and systems to minimise the risk of waiver of any privilege. There are various strategies available to maximise the chance of a successful claim for privilege being made, and advice on the strategies appropriate to the particular procurement process being conducted should be sought at an early stage.
Authors: Sarah Ross-Smith, Partner; Hyans Mach, Counsel; Tess Hemming, Senior Associate; Rob Andersen, Senior Associate; Isabelle Heath, Lawyer.
