Agencies dodged tender process

04 Oct 2010

Source: The Australian- National Affairs

FEDERAL government agencies ducked the tender process to buy nearly half the $45.5 billion in goods and services contracted out last year.

Direct procurement -- which circumvents the open tender process and does not require any comparison of quotes -- accounted for $20.3bn of the government's purchasing bill in 2008-09. Only one in three of the 80,586 contracts let by government departments and agencies was put to open tender. Another 18 per cent of the contracts -- worth $4.6bn or 10 per cent of the total value -- went through a "select tender" process, by which agencies invite quotes from a pre-approved list of contractors.

An analysis by the Australian National Audit Office discovered that in 85 per cent of the 248 contracts it sampled, agencies approached only one supplier and failed to seek a quote -- or sought only a single quote -- before purchase. In 74 per cent of the contracts analysed, agencies could not demonstrate value for money, the ANAO reported.

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