Commonwealth Procurement Rules
The instrument to which this explanatory statement relates
This explanatory statement relates to the “Commonwealth Procurement Rules” (the instrument).
The legislative authority under which the instrument is made
Section 64(1) of the Financial Management and Accountability Act 1997 (FMA Act) enables the regulations to authorise a Minister to issue guidelines to officials on matters within the Minister’s responsibility. Section 64(3) of the FMA Act provides that “A guideline is a legislative instrument, but neither section 42 (disallowance) nor Part 6 (sunsetting) of the Legislative Instruments Act 2003 applies to the guideline”. A statement of compatibility with human rights is not required. Regulation 7(1) of the Financial Management and Accountability Regulations 1997 enables the Finance Minister to issue guidelines in relation to procurement.
The guidelines are to have a title approved by the Finance Minister.
Purpose of the instrument
The instrument combines the requirements of Australia’s international trade obligations, government policy and good practice in procurement into a core set of rules which apply to Commonwealth procurement.
Notes on the instrument
The instrument applies to all procurement conducted by FMA Act agencies and certain procurement by prescribed bodies specified under Regulation 9 of the Commonwealth Authorities and Companies Regulations 1997. Division 1 of the instrument contains rules applying to all procurements regardless of their value or whether an exemption applies to them. Division 2 of the instrument contains additional rules applying to procurements valued at or above the relevant procurement threshold.
Procurement encompasses the whole process of acquiring goods or services. It begins when an agency has identified a need and decided on its procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, the awarding of a contract, the delivery of and payment for goods and services and, where relevant, the ongoing management of the contract and consideration of disposal of goods.
Consultation
All FMA Act agencies and those Commonwealth Authorities and Companies Act 1997 bodies subject to the instrument were consulted on the development of the instrument.
Over the past twelve months Finance has engaged with agencies through seminars, working groups with senior procurement officials and the distribution of drafts to procurement and CFO areas for comment in order to collaboratively redevelop the instrument.
The Office of Legislative Drafting and Publishing and the Australian Government Solicitor were also consulted.