Commonwealth Procurement series: The importance of sticking to your (evaluation) guns!

The ANAO has recently emphasised the importance of establishing clear evaluation criteria and evaluating against those criteria only. Officials need to carefully consider what is important to evaluate, and then must stick to their (evaluation) guns! This was the key message coming out of the Australian National Audit Office (ANAO) performance audit report into Home Affairs’ (Home Affairs) procurement of the Permissions Capability (the Audit).

The upshot? The ANAO emphasised that officials must evaluate solely against the evaluation criteria. If pricing is requested in a particular way, then officials need to ensure it is something tenderers are able to provide (so you don’t end up trying to assess apples and oranges).

Background

The contract, now terminated, was awarded to Accenture Australia Pty Ltd (Accenture) for $61.5 million through five work orders issued under the deed of standing offer.

Key audit questions answered

Why were the audits undertaken?

The Audit was undertaken to provide independent assurance to Parliament as to whether the procurement demonstrated achievement of value for money and whether it was open, competitive, fair, and non-discriminatory.

Key Findings

• The conduct of the procurement reduced Home Affairs’ ability to demonstrate achievement of value for money.
• Accenture was the only shortlisted tenderer that was evaluated as representing value for money. However, in reaching that decision, Home Affairs departed in several respects from the approach it had set out in the RFT, by:
  • including for evaluation tenders that adopted different commercial models to those requested by the RFT, making pricing comparisons during the tender evaluation stage more difficult;
  • undertaking a hosting certification process that was not a requirement in the RFT; and
  • changing the service delivery model.

A key theme here is the importance of setting appropriate and clear tender response requirements and evaluation criteria and then sticking to them, to ensure value for money is effectively assessed and achieved.

What did the ANAO recommend?

The ANAO recommended that Home Affairs set out in:  

• request documentation, whether responses that depart from its preferred contracting approach will be accepted; and
• tender evaluation plans, how departures will be addressed in the evaluation of competing tenders.

Home Affairs partially agreed to these recommendations.

The ANAO also identified an opportunity for improvement - that all request documentation set out the relative importance or weight of all evaluation criteria.

What the ANAO wants you to know

The ANAO emphasised the importance of competition in the procurement process, with the following key messages:

• Clearly establish evaluation criteria and then evaluate against those criteria only. Do not evaluate against things you haven’t asked for.
• If pricing is requested in a particular manner or form, then officials must ensure it’s something tenderers can provide. A good understanding of what the market can provide (by getting that intel before you approach the market) is key to this.
• Competition is enhanced when entities implement measures to level the playing field in instances where potential suppliers have gained a competitive advantage. (In this process, two tenderers had gained a competitive advantage because of their deep engagement over 24 months in the terminated process.)
• Commonwealth entities should adopt processes to ensure that all potential tenderers have a detailed understanding of the requirements. This can be achieved by providing potential tenderers with:
  • the opportunity to clarify the entity’s requirements through information sessions;
  • the disclosure of all relevant information;
  • the opportunity to ask questions;
  • as much notice in advance of the likelihood of an upcoming procurement; and
  • as much time for tenderers to respond to a complex approach to the market as possible.

To read more about this performance audit report or to view other performance audits into Australian Government procurements visit the ANAO website.