DIMA Annual Report 2000-01
Management and accountability - continued
Assessment of purchasing against key objectives
The department uses a wide range of purchasing arrangements. These include formal arrangements with suppliers including contracts for goods and services, consultancy contracts, grants, standing offers, memoranda of understanding with other Commonwealth agencies and existing panel arrangements established by the Department of Finance and Administration.
In its contract and market testing arrangements, the department ensures that initial contract specifications are clearly defined. These include expected outcomes, selection criteria, key performance indicators and acceptable service levels. This involves extensive industry research and consultation with key stakeholders.
Value for money is a key performance measure in the assessment of all quoted and tendered purchases and a key criterion in market tested services. Around 70 per cent of DIMA's budgeted services operate under existing contract or are being market tested.
All purchases over $2,000 are gazetted. The department ensures there is reasonable access for suppliers to procurement opportunities through advertising business opportunities on the Government publishing system and through newspaper advertisements. The department market tests competitively using tender processes, appropriate to market maturity being open, select or sole tender.
Accountability for purchasing is devolved to line areas responsible for contract outcomes. The internal control framework that DIMA has developed ensures efficient and effective management and accountability for purchases and contract activity. The framework is consistent with the FMA Act and is underpinned by departmental Chief Executive Instructions and Administrative Circulars.
The department has recently revised tender documentation to include more consistent mechanisms to assess suppliers' capabilities in meeting key Government policies. Advice from the Department of Finance and Administration is that the department is well above the required small and medium enterprises participation rate.
Support for Commonwealth policies continues to include compliance with various policies and laws with the department recently adopting a new illegal workers policy for standard contracts. It ensures that contractors employees, subcontractors and any other person engaged are not engaging illegal workers.
Payment of contract fees is generally linked to the achievement of specified milestones and invoices for payment are checked against the terms of the contract.
The department runs a contract management forum in which current topical
competitive tendering and contracting issues are discussed in an open
forum, contract experts share knowledge and experiences on recent activities.
External private and public sector agencies have participated in the forum.
The department has also run contract management training courses covering
such topics as planning procurement process, establishing contract management
strategies, monitoring and maintaining performance, and end of cycle review.
The department's Central Purchasing Unit provides procurement advice
to program areas on all facets of procurement activities including contract
formation and management.
The unit maintains a suite of proforma contract
and tender documentation that incorporates key purchasing objectives.
It also provides contract formulation and management training for appropriate
staff, and provides or arranges for contract legal advice.
Consistent with the Government's decision on e-Commerce, the department
is now paying goods and services accounts electronically, with less than
a five per cent exception rate.
The department procures with a small section
of the business community electronically, and will increase this activity
as the broader business community become e-compliant. In accordance with
the Government's Investing for Growth statement of December 1997, a strategy
for the implementation of e-Procurement has been developed.
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