Commonwealth Entrepreneurs’ Programme probity issues

The Australian National Audit Office (ANAO) on Friday (24 June 22) tabled the performance audit for the procurement of delivery partners for the Entrepreneurs’ Programme.

The ANAO found that the design and conduct of the procurement undertaken by the Department of Industry, Science, Energy and Resources (DISER) did not comply with the Commonwealth Procurement Rules. The signed contracts are not being appropriately managed. Their findings are extraordinary.

The Entrepreneurs’ Programme was part of the 2014–15 Budget with funding of $484.2 million. It forms part of the Australian Government’s industry policy and part of the National Innovation and Science Agenda.

An RFT was issued in Sept 2019 to engage expert business advisory and facilitation services (the delivery partners) to deliver the program. The estimated value was $182 million for the maximum contract term of 5 years. This was DISER’s largest value procurement in 2019–20. It represented 37 per cent of the total value of their departmental contracting that year.

Fifty-five responses were received to the Entrepreneurs’ Programme RFT. Ten of them were from incumbent providers. Seven contracts were entered into.

ANAO found that:

• the design and conduct of the tender process did not comply with Commonwealth procurement rules
• the contracts did not achieve value for money
• there was no open and effective competition, as competing tenders were not treated fairly or equitably
• the contracts are not being appropriately managed—the contract management framework is inadequate and the contracts do not include an effective performance management framework

The mismanagement they found included:

• not evaluating the tenders against each of the published criteria
• not meeting ethical requirements—key aspects of the approach were not outlined or were inconsistent with the RFT
• the evaluation plan did not include the same criteria as the RFT
• only 14 of the compliant tenders (53) were assessed against the price criteria
• none of the compliant tenders were assessed against the risk criterion or the Commonwealth policies criterion

In the most comic of the findings—ANAO found the engagement of the probity adviser “was deficient, including an absence of open and effective competition for the role”. In other words DISER even failed probity requirements in engaging the probity advisor. Read our post on why probity in tendering is so important.

ANAO made ten recommendations to DISWE which they have agreed. However, DISER in their response, stated that the Entrepreneurs’ Programme has successfully supported over 22,000 Australian companies to strengthen and grow since its launch in 2014. Businesses participating in the growth element of the program have experienced average increases of 3.5 new jobs and an additional $1.47 million in turnover.

There were no recommendations about the ramifications for the public servants involved.