The Digital Transformation Agency (DTA) procurement of ICT-related services has been ineffective for all the nine procurements examined by the Australian National Audit Office (ANAO) which looked at nine DTA procurements with a combined value of $54.5 million.
The audited procurements had published start dates in 2019-20 and 2020-21 and included an open tender, seven panel procurements (including four where the DTA approached one supplier off the panel) and one which was a limited tender.
The audit showed that although the DTA had established a procurement framework, its implementation and oversight had been weak.
Additionally, for the nine ICT-related procurements examined by the ANAO, the DTA did not conduct the procurements effectively and its approach fell short of ethical requirements.
The ANAO also found that the DTA had not managed contract effectively.
As a result, the audit, which was conducted to provide increased transparency over the DTA’s procurement framework and assurance that contracts were effectively managed, made eight recommendations to the DTA to improve compliance with the Commonwealth Procurement Rules (CPRs) and one recommendation to the Australian Government to improve transparency on the reporting of panel procurements.
The chief executive of the DTA, Chris Fechner, said in the official statement that the audit “was not a review of the DTA’s whole-of-government digital sourcing responsibilities” and, as such, the ANAO’s findings had no bearing whatsoever on the DTA’s whole-of-government agreements, panels, marketplaces and BuyICT platform.
“The DTA welcomes this review and takes seriously the ANAO’s focus on providing increased transparency over our internal procurement framework and practices with a view to ensuring contracts are managed effectively and value for money continues to be achieved,” he said.
“The DTA accepts all identified opportunities for improvement and agrees with each of the eight relevant recommendations proposed in the review.”
The DTA said that remediation work undertaken to date, and planned for the immediate future, included strengthened internal controls as well as training and education.
Strengthened internal controls included:
- review of risk-management framework, including update of strategic risks and risk register
- update guidelines strengthening processes around potential fraud and probity breaches
- review of approach-to-market, tender-evaluation and contract-management processes
- improved management of internal payment controls, with an internal audit to verify the effectiveness of these controls by March 2023
- implementation of register of declared interests for Senior Executive Service staff
- update of gifts and benefits policy, and online publication of gifts and benefits register.
Training and education included:
- mandate and scheduling of annual fraud awareness training for all staff
- training and education campaigns around finance and procurement processes, including approach to market, tender evaluation, declarations of interest and contract management
- review of e-learning modules to determine if updates and/or new content are required
- bi-annual training for SES staff on internal controls around declarations of interest
- training of relevant staff on internal payments system
The audit also found that four of the DTA’s five highest value procurements in 2019-20 and 2020-21 involved an approach to only one supplier and the contract value (over two years) for one direct-approach procurement increased 40 times, from $121,000 to almost $5 million.