The Northern Territory government housing department recently found itself in hot water over its procurement practices.
Auditor-General Julie Crisp said investigations “identified control deficiencies and weakness across the procurement lifecycle and non-compliance with procurement rules”.
To make matters worse, the department was not able to produce its documentation for audit purposes.
While the exact value of the contracts under dispute is not known, it is thought to run into millions of dollars as 27 of the 31 tenders Ms Crisp investigated were found to deviate from procurement rules.
The AG’s report and the subsequent political fall-out highlight once again the minefield of public sector procurement.
And as we’ve long pointed out, there are two main challenges – getting it right and being able to prove you got it right.
Robust solutions needed
The NT debacle demonstrates once again the need for clear and comprehensive policies and processes. While the NT government appears to have that box ticked, it is just as important to ensure that the guidelines are followed.
One way is to adopt procurement technology and to mandate its use to make sure that all procurement ‘goes by the book’.
For procurement, the benefits of automated systems go further still, improving purchasing process transparency.
What’s clearly lacking in the NT case is visibility, and e-procurement can monitor every step of the procurement process, providing real transparency.
Policies can be fully embedded into e-procurement solutions. This ensures rigorous audit trails, with oversight of every stage of the process. It guarantees that all contract awards comply with probity requirements and avoids the significant risks associated with public purse expenditure.
NT officials have acknowledged deficiencies within the procurement processes and have implemented “a series of structural changes within its procurement group to address these deficiencies”.
Let’s hope those changes remove the real causes of the current woes and replace subjective, manual activities with transparent, automated solutions which will stand up to scrutiny.
Rob Cook is Marketing Manager of illion TenderLink - Australasia's leading integrated web-based procurement solutions provider.