How much do you like updating procurement policies? Hopefully a lot: Appeal mechanism to be introduced to Public Works and Procurement Act (NSW) any day now

Key Points
  • The NSW Government has recently passed a bill that will give suppliers the power to challenge procurement decisions that are in breach, or potentially, in breach of an ‘enforceable procurement provision’ of the NSW Procurement Board. 
  • Challenges will be able to be raised with Government Agency Heads or the Supreme Court of New South Wales. In either scenario there is the potential for the implementation of procurement decisions to be halted.
  • If there ever was a time for NSW Government Agencies to review their procurement policies and procedures it is almost certain to be in the next few months
The Amendment Act

On 22 November 2018 the Public Works and Procurement Amendment (Enforcement) Act 2018 (NSW) (Amendment Act) was assented to by the NSW Government.

The Amendment Act is part of a raft of Commonwealth, State and Territory legislation aimed at bringing Australia into line with Trans-Pacific Partnership requirements concerning independent review mechanisms for government procurements.

Once the Amendment Act commences, suppliers will have a formal mechanism for lodging complaints with NSW Government Agencies directly and, if not satisfied with that, to commence proceedings in the NSW Supreme Court. The trigger for these rights will be the supplier believing a NSW Government procurement decision breached or may have breached an ‘enforceable procurement provision’.
The NSW Procurement Board will have expanded powers to, not only, issue directions to NSW Government agencies and determine which aspects of its directions will be ‘enforceable procurement provisions’.

How do the new mechanisms differ from existing mechanism?

The current NSW Procurement Board complaints management guidelines are directed at devolving procurement and complaints management to the agency level, and giving agencies guidance for developing effective complaints management processes.  Under these guidelines complaints can be escalated to the NSW Procurement Board for investigation but this is not the preferred first step.

Under the Amendment Act, the existing mechanisms will be supplemented by an appeal mechanism that includes obligations on the heads of government agencies to:
  • investigate complaints and attempt to resolve them,
  • prepare a report in relation to each complaint,
  • if continuing with parts of the procurement would adversely affect the complainant’s participation if the procurement continued:
    • suspend those parts of the relevant procurement, or
    • issue a public interest certificate stating that the procurement is of significant public interest and should continue while the complaint is being resolved.
This suspension pending investigation is a key feature of the Amendment Act.
Another key feature is the ability of suppliers to escalate unresolved complaints to the Supreme Court of NSW where they have made a genuine attempt at resolution through the internal review process but this has failed.
The Amending Act grants the Supreme Court power to grant an injunction forcing agencies to refrain from, avoid, or remedy a contravention, and the power to make an order for compensation, subject to some preconditions.

What next?

The commencement of the Amendment Act will have significant implications for NSW Government Agencies.

The final step before the Amendment Act commences is its proclamation. We would expect that shortly after the Amendment Act has commenced the NSW Procurement Board will issue guidance on implementation of the Amendment Act.

The Amendment Act also allows for the development of regulations governing:
  • the persons, groups of persons or bodies who have standing to make complaints,
  • the kinds of complaints that can be made,
  • the manner, form and time period for making complaints, and
  • the resolution of complaints.

To date, draft regulations haven’t been released.

Government agencies should take steps to ensure their policies, processes and templates address and are brought into line with the Amendment Act and any guidance or regulations.

Post by Catherine Pittaway, Phillip McKay and David Fischl

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