Commonwealth Procurement Rules Explanatory Statement
The Commonwealth Procurement Rules (CPRs) are issued by the Finance Minister under s105B(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). As per s105B(2) of the PGPA Act, neither instrument is subject to section 42 (disallowance) of the Legislative Instruments Act 2003. This instrument commences on 1 March 2017.
The updated CPRs incorporate the requirements of Australia’s international trade obligations and government policy in procurement into a set of rules which apply to Commonwealth procurement. The CPRs apply to procurement conducted by non-corporate Commonwealth entities and certain procurements conducted by prescribed corporate Commonwealth entities as listed in section 30 of the PGPA Act.
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.
Division 1 of the CPRs contains rules applying to all procurements regardless of their value or whether an exemption applies. Division 2 of the instrument contains additional rules applying to procurements valued at or above the relevant procurement threshold.
The changes to the CPRs support ethical supplier practices such as compliance with regulations and regulatory frameworks as well as applicable standards and include considerations on the broader benefits to the Australian economy for certain procurements.
The CPRs are supported by guidance available at http://www.finance.gov.au/procurement/.
Consultation
The Minister for Finance approved the updated CPRs.
No consultation was undertaken as the amendments are minor changes that will improve clarity of language and presentation.
Overview
The Commonwealth Procurement Rules (CPRs) were enacted in 2017 to provide a consolidated framework for the procurement of goods and services by the Commonwealth government, aligning with Australia's international trade obligations and government policy. These rules, issued by the Finance Minister under the Public Governance, Performance and Accountability Act 2013, apply to non-corporate Commonwealth entities and specific corporate entities, governing the entire procurement process from identifying a need to managing the contract. The CPRs aim to promote ethical procurement practices, ensuring compliance with relevant regulations, standards, and frameworks, while also considering the broader economic benefits. The changes to the CPRs were minor, focusing on enhancing the clarity and presentation of the rules, and were approved by the Minister for Finance without the need for public consultation.
Scope and Application
The Commonwealth Procurement Rules (CPRs) govern procurement processes undertaken by non-corporate Commonwealth entities and certain procurements by prescribed corporate Commonwealth entities as specified in the Public Governance, Performance and Accountability Act 2013 (PGPA Act). These rules are designed to incorporate Australia's international trade obligations and government policy in procurement into a cohesive set of regulations. The CPRs apply to the entire procurement process, from the initial identification of need through to the evaluation of alternative solutions, contract award, delivery and payment of goods and services, and the management and disposal of contracts. Division 1 of the CPRs applies universally to all procurement activities regardless of their value or whether exemptions apply, while Division 2 outlines additional rules for procurements valued at or above a specified threshold. The rules support ethical supplier practices and consider broader economic benefits, ensuring compliance with regulations, standards, and frameworks. The CPRs are effective from 1 March 2017 and are not subject to disallowance under the Legislative Instruments Act 2003. Guidance on the CPRs can be found on the Department of Finance website.
Key Provisions
The Commonwealth Procurement Rules (CPRs) are the primary instrument governing procurement activities within the Commonwealth, issued under section 105B(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). These rules apply to procurement conducted by non-corporate Commonwealth entities and certain procurements by prescribed corporate Commonwealth entities, as specified in section 30 of the PGPA Act. The CPRs are designed to incorporate Australia's international trade obligations and government policy into the procurement process, covering the entire acquisition cycle from identifying a need to managing and disposing of goods or services. The CPRs are divided into two main sections: Division 1 applies to all procurements, irrespective of value or exemptions, while Division 2 provides additional rules for procurements valued at or above specified thresholds.
Under these rules, agencies must ensure their procurement processes adhere to ethical supplier practices, which include compliance with relevant regulations, standards, and frameworks. This encompasses the evaluation of alternative solutions, contract award, and the ongoing management of procurement activities. The CPRs emphasise broader economic benefits and ethical considerations, ensuring that procurement practices align with national interests. Guidance and further information are available on the Finance Department’s website, providing additional support for agencies in interpreting and applying the rules.
The CPRs impose several obligations on the parties involved in procurement activities. Agencies must conduct procurements in a transparent, fair, and competitive manner, ensuring that all procurement processes are documented and justified. They are required to seek and evaluate alternative solutions, including considering local and international suppliers. Additionally, agencies must ensure that contracts are awarded based on clear and justifiable criteria, promoting fairness and integrity in procurement. The rules also mandate the consideration of broader economic impacts, particularly for significant procurements, ensuring that the procurement process contributes positively to the Australian economy.
Failure to comply with the CPRs can result in various consequences, both civil and criminal. Civilly, non-compliance may lead to the invalidation of contracts, financial penalties, and the requirement to re-tender procurement processes. The PGPA Act also provides for the possibility of criminal sanctions for procurement-related misconduct, including fines and imprisonment for serious breaches. Specific penalties are outlined in the PGPA Act, with maximum penalties varying based on the severity of the breach. The importance of adhering to the CPRs is underscored by these potential consequences, which serve to uphold the integrity and effectiveness of Commonwealth procurement processes.