EXPLANATORY STATEMENT
Issued by Authority of the Minister for Infrastructure and Regional Development
Subject - National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014
Subparagraph 24(1)(c)(vi) of the National Land Transport Act 2014 allows for work on a funded project to be exempt from public tender requirements if it is less than an amount determined by the Minister.
Subsection 24(4) of the National Land Transport Act 2014 provides that the Minister may determine the amount under which work is exempt from public tender requirements through a legislative instrument. Accordingly, the National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014 prescribes an amount ($100,000) below which work on a funded project can be exempt from public tender requirements.
The decision to set this amount was based on the need to simplify procurement processes, yet still manage risk. In the construction industry an infrastructure project below this amount would be viewed as minor in nature, therefore the cost of conducting a tender process would likely outweigh the benefits. This takes into consideration the cost and time requirements of a tender process, and will also reduce the regulatory burden on jurisdictions by simplifying the procurement process.
This means that works exempt from public tender by subparagraph 24(1)(c)(vi) are likely to be works of a similar nature to those outlined in subparagraphs 24(1)(c)(i)-(iv), which may also be exempt from public tender requirements if Ministerial exemption is granted. The works included under subparagraphs 24(1)(c)(i)-(iv) are works of such a minor nature that the invitation of tenders would involve undue additional cost; or where the work is of a kind which is not practicable to prepare tender specifications; or where competitive tenders are unlikely to be received.
Despite the exemption of public tender requirements for works less than $100,000, appropriate levels of oversight will still be provided through the requirements under the funding approval and through terms of the National Partnership Agreement on Land Transport Infrastructure Projects. As currently drafted, this National Partnership Agreement requires reporting and appropriate measures to ensure transparency, value for money and protection of the Commonwealth’s investment.
Consultation occurred with jurisdictions on the provisions of the National Land Transport Act 2014. As part of this consultation the terms of this Determination were explained. This Determination has no impact on business.
The instrument commences on 10 October 2014.
Authority: Subsection 24(4)
of the National Land Transport Act 2014
Overview
The National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014, issued under the authority of the Minister for Infrastructure and Regional Development, was introduced to streamline procurement processes while managing risk within the context of the National Land Transport Act 2014. The determination, effective from 10 October 2014, sets an exemption threshold of $100,000 for public tender requirements on funded projects, as authorised by subsection 24(4) of the Act. This legislative instrument aims to address the problem of unnecessary regulatory burdens on jurisdictions by simplifying procurement processes, particularly for minor infrastructure projects where the costs of conducting a tender process may outweigh the benefits. By exempting works below this threshold from public tender, the determination seeks to reduce the overall regulatory burden while maintaining appropriate oversight through funding approval and the terms of the National Partnership Agreement on Land Transport Infrastructure Projects.
Scope and Application
The National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014 applies to funded projects under the National Land Transport Act 2014, providing an exemption from public tender requirements for works valued less than $100,000. This determination is intended to streamline procurement processes for minor projects while still ensuring risk management and oversight. It applies to infrastructure projects deemed minor, where the tender process costs would outweigh the benefits. This exemption simplifies the procurement process and reduces the regulatory burden on jurisdictions by avoiding unnecessary tender processes for minor works. Despite the exemption, appropriate oversight is maintained through the funding approval process and the terms of the National Partnership Agreement on Land Transport Infrastructure Projects, which ensure transparency, value for money, and protection of the Commonwealth's investment. The exemption is limited to projects valued under $100,000, which are considered minor in the construction industry. This Determination operates nationally and is effective from 10 October 2014.
Key Provisions
The National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014 sets out the conditions under which certain funded projects can be exempt from public tender requirements. According to section 24(1)(c)(vi) of the National Land Transport Act 2014, projects that are less than the specified amount can bypass the public tender process. This Determination, in line with section 24(4), prescribes that work on a funded project can be exempt if it is below $100,000. This threshold aims to balance the need for streamlined procurement processes with effective risk management.
The Act imposes obligations on the entities involved in these projects to ensure they comply with the funding approval requirements and adhere to the National Partnership Agreement on Land Transport Infrastructure Projects. This includes ensuring transparency, delivering value for money, and protecting the Commonwealth’s investment. The Agreement mandates reporting and appropriate oversight measures, ensuring that even projects exempt from tendering are subject to sufficient regulatory scrutiny.
Failure to comply with the requirements set out in the Determination or the National Partnership Agreement may lead to civil or criminal consequences. The specific penalties are not detailed in the Determination but could include fines, legal action, or other sanctions as prescribed by the relevant legislation. The Act ensures that while the tendering process may be simplified for smaller projects, the integrity and oversight of funding remain paramount.
The Determination also ensures that the exemption does not undermine the integrity of the procurement process. By maintaining a defined threshold, it ensures that only minor projects are exempt, thereby avoiding the potential pitfalls of bypassing competitive tendering for larger or more significant works. The intention is to facilitate efficiency in procurement without compromising on quality or value.
In summary, the National Land Transport (Exemption from Public Tenders for State Projects) Determination 2014 allows for the exemption of funded projects worth less than $100,000 from public tender requirements, aiming to streamline procurement processes while maintaining necessary oversight and compliance with funding agreements. This balance is crucial for ensuring both efficiency and accountability in the execution of land transport infrastructure projects.