Procurement Complaints Handling

Key Takeaways

Procurement complaints are a risk to the achievement of agency objectives. Not only can procurement complaints result in the suspension of procurement activities, but even if the procurement is not suspended, responding to a complaint can derail the progress of a procurement. 

ANAO’s recommendations in its Report, if fully implemented, could have the effect of increasing the number of procurement complaints. This is because they are aimed at broadening the application of Government Procurement (Judicial Review) Act 2018 (Cth) (GPJR Act) to cover procurements off panels and increasing awareness of, and access to, complaint mechanisms within the market. 

Consistent with the ANAO guidance, agencies must uplift their existing materials to ensure suppliers are informed about complaint processes, including on their websites and as part of approach to market documentation. 

Agencies may need to uplift capability and processes to be positioned to prevent and respond to an increasing prevalence of procurement complaints.

A snapshot of the ANAO Report

The objective of the Report was to assess the effectiveness of procurement complaints handling by a number of Commonwealth agencies, by considering:

• Whether mechanisms and processes were clear and accessible to suppliers; and 
• If complaints were handled appropriately.

While the ANAO was satisfied that procurement complaint procedures and handling were ‘largely effective’, the ANAO did find:

• The current procurement framework limits suppliers making complaints under the GPJR Act. In particular, the exclusion of panel procurements substantially limits supplier access to the GPJR Act. The ANAO estimated that the GPJR Act did not apply to at least 89% of contracts by volume, or 62% of contracts by value, reported from 1 July 2019 to 30 June 2022.
• Entities need to better inform suppliers about complaint options and improve access to the available mechanisms, including the GPJR Act, Commonwealth Ombudsman and Department of Finance Procurement Coordinator; and
• There were various deficiencies in complaint handling processes by Government. For example, only 32% of 28 open tenders by the four audited entities, and only 5% of 43 open tenders by 41 other entities, advised suppliers where to make a complaint, what to put in their complaint and how it would be handled, including under the GPJR Act.

The ANAO made four key recommendations for the Department of Finance, all of which were agreed to. There were:

1. Revisit whether the Commonwealth Procurement Rules (CPRs) provide sufficient coverage of the complaint mechanisms established by GPJR Act to meet Australia’s international trade obligations and as per Senate Committee recommendations. Subsequent changes to the CPRs which commenced on 1 July 2024 appear to only partially implement this recommendation. 
2. Amend the Commonwealth Contracting Suite approach to market templates to better support access to the GPJR Act, including by stating whether the procurement is or is not a ‘covered procurement’.
3. Publish a guide for suppliers about the GPJR Act. Notify relevant Australian Government entities of this guide and suggest they include a link to the guide on their websites and in their approach to market templates for covered procurements.
4. Review how the Procurement Coordinator complaint mechanism is promoted and operated, and implement arrangements that improve accessibility and customer service. 

Implications for Commonwealth agencies

It has now been five years since the GPJR Act came into force. Without any public litigation on the regime, this Report provides some useful guidance to Commonwealth agencies in managing their GPJR Act compliance. 

Based on this Report, there is an opportunity to leverage off ANAO ‘endorsed’ complaints handling processes. The Report flags the potential for upcoming changes to CPRs, templates and guidance on procurement complaints. If the ANAO’s recommendations are fully implemented, agencies can position themselves to be ready and responsive to any new requirements.

Importantly, we think it is likely that measures which improve access to GPJR Act complaint mechanisms may increase complaints in future procurements. That is, agencies may receive new complaints, or have an increasing number of complaints to deal with. It is therefore crucial that agencies have applicable guidance, standard operating procedures, templates and other materials in place to facilitate the handling of complaints. For example, does your agency know who is responsible for responding to a GPJR Act complaint? Does your agency’s delegation instrument reflect this?

Agencies should not underestimate how difficult it can be to respond to procurement complaints. Complaints impose additional workload on key legal and procurement resources, require additional senior executive engagement, as well as add complexity and risk to related procurement activities. Without a Public Interest Certificate (PIC) in place, this all needs to occur during an active procurement process. 

The increased scrutiny by the ANAO, and other areas of Government, also indicates the increasing importance that Commonwealth agencies undertake procurements properly, and PICs are used appropriately.

Links to broader procurement trends

The strengthening of the procurement complaints regime is consistent with the emphasis on transparency and ethics in procurement, as part of broader ESG trend across Commonwealth Government. 

In practice, we are seeing greater awareness of GPJR Act rights and Commonwealth agencies are starting to receive complaints in relation to their procurements. Although still not necessarily common in Australia, that trend may accelerate—if the ANAO recommendations in this Report are fully implemented. This risk of procurement complaints may also be exacerbated by the difficulty in accessing procurement expertise in the current labour market. 

It is also worth noting that the ANAO appears increasingly interested in procurement activities and providing guidance to agencies as part of its reports. ANAO has now started publishing best practice ‘Insights’. (Some readers will remember that the ANAO decided to discontinue a range of better practice guides in 2017, to avoid duplicating similar guidance from other agencies). In this context, this report does seem to be a ‘shot over the bow’ at the Department of Finance in relation to procurement activities. 

How should agencies respond? 

• Assess compliance with procurement complaint best practice; identify areas of procurement risk in your organisation
• Update your agency’s website and approach to market suite to better inform suppliers about when the GPJR Act applies and complaints processes which apply
• Develop procurement complaints handling processes, including guidance on issuing PICs and delegations
• Ensure your organisation has sufficient capacity and capability to deal with procurement complaints, including providing additional training and development for relevant personnel and decision makers.