EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 148
Productivity Commission Act 1998
Productivity Commission Amendment Regulations 2007 (No. 1)
The Productivity Commission Act 1998 (the Act) provides under subsection 45(4) that if the estimated value of a consultancy exceeds the amount prescribed by the regulations, the Chair must ensure that an open, competitive tendering process is used in selecting the consultant.
Section 60 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Regulations amend the mandatory open tender threshold for engaging consultants as set out in the Productivity Commission Regulations 1998.
The Regulations reflect the mandatory open tender threshold for Financial Management and Accountability Act 1997 agencies as set out in the Commonwealth Procurement Guidelines – January 2005 of $80,000.
The Regulations assist the Productivity Commission in its operational requirement to engage consultants when specific skills, expertise or independent advice is required by ensuring that relatively minor consultancy contracts are not required to be put to an open tender process. This enables the Productivity Commission to procure such services in an efficient and effective manner.
No consultations were conducted in relation to these Regulations as the amendments were considered not to have relevant implications for any external agencies or other bodies.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Overview
The Productivity Commission Amendment Regulations 2007 (No. 1) were enacted to modify the mandatory open tender threshold for engaging consultants as specified in the Productivity Commission Regulations 1998. This legislative instrument was introduced in response to a need for alignment with the Commonwealth Procurement Guidelines – January 2005, particularly concerning the threshold for financial management and accountability agencies, which was set at $80,000. The Productivity Commission Act 1998 provides the legislative framework, and under section 60, the Governor-General has the authority to make regulations necessary for the implementation and effect of the Act. The primary policy objective of these amendments is to facilitate the Productivity Commission's operational efficiency by allowing it to engage consultants for specific skills and expertise without the necessity of an open tender process for relatively minor consultancy contracts. Consequently, this allows the Commission to procure such services more effectively and efficiently.
Scope and Application
The Productivity Commission Amendment Regulations 2007 (No. 1) pertain to the selection of consultants by the Productivity Commission in accordance with the Productivity Commission Act 1998. These Regulations amend the threshold value for consultancy contracts that must undergo an open, competitive tendering process. Specifically, they set this threshold at $80,000, aligning with the mandatory open tender requirements stipulated in the Commonwealth Procurement Guidelines as of January 2005. This adjustment ensures that minor consultancy contracts are not unnecessarily subjected to an open tender process, thereby allowing the Productivity Commission to efficiently and effectively engage consultants when specific skills, expertise, or independent advice are required. The Regulations apply to the operations of the Productivity Commission and were enacted without external consultation as they were deemed not to impact other agencies or bodies.
Key Provisions
The Productivity Commission Amendment Regulations 2007 (No. 1) introduce significant changes to the tendering process for consultancy services under the Productivity Commission Act 1998. Section 45(4) of the Act stipulates that if the estimated value of a consultancy exceeds the prescribed amount, the Chair must ensure that an open, competitive tendering process is used to select the consultant. The Regulations amend this threshold, aligning it with the mandatory open tender requirements of the Financial Management and Accountability Act 1997, as outlined in the Commonwealth Procurement Guidelines – January 2005. Specifically, the new threshold is set at $80,000, meaning that consultancy services estimated to exceed this value must be subjected to an open tender process to ensure transparency and competition.
Under these Regulations, the Productivity Commission is obliged to adhere to the new tendering requirements when engaging consultants for projects valued over $80,000. This includes conducting a thorough and open tender process to select the most suitable consultant for the job, ensuring that the selection is based on merit and not on pre-existing relationships or non-competitive practices. The intent behind these obligations is to facilitate an efficient and effective procurement process for the Commission while maintaining high standards of accountability and integrity in the selection of consultants.
Breach of the provisions outlined in the Regulations can result in serious consequences. Although the specific offences, penalties, or consequences for non-compliance are not detailed in the explanatory statement, it is clear that failure to follow the mandated tendering process for consultancy services valued over $80,000 could lead to legal and administrative repercussions. The Productivity Commission, as well as any consultants or entities involved, may face scrutiny, potential legal action, or other penalties as prescribed by the relevant legislation. The precise nature of these consequences would be determined by the courts or administrative bodies, but the implications of non-compliance are significant.