Probity Audit of Procurement Process

Probity Audit of Procurement Process

Assignment 3 involves conducting a probity audit of a procurement process and providing a written probity advice on that procurement. You may complete the assignment either as an individual or as one of a pair of students. Should you elect to complete the assignment as one of a pair, then both students must submit the same assignment (and will receive the same mark for the assignment). If you submit the assignments as part of pair, then you must name both students on both of the assignments.The probity advice is a professional document submitted to a client. It isnot an essay, a journal article or a literary search. The probity advice must be no more than 2500 words. I will stop marking when I reach 2500 words and any content after that point will not be awarded marks. You may use footnotes, but marks will not be awarded for substantive information in footnotes. You are not required to submit a bibliography and I would advise you not to waste your word count on one. There must be an Executive Summary at the start of your probity advice of no more than 250 words.

Your probity advice does not need a covering letter. You may use tables and bullet points to organize your probity advice. It is strongly suggested you use headings and sub-headings.

You have been provided with three procurement documents:

  1. The DWKM Probity Plan;
  2. The DWKM Procurement and Evaluation Plan; and
  3. The Deep Bunker Infrastructure Conditions of

Additional information and facts are provided in the ‘Deep Bunker Infrastructure Procurement Scenario’. Working with this information and the supplied documents you are to prepare and submit the probity audit advice, as requested in the Deep Bunker Infrastructure Procurement Scenario.

It is important to note that all of the factual information (dates, times, numbers, people etc.) in the Deep Bunker Infrastructure Procurement Scenario is correct. However, actions undertaken or proposed to be undertaken in the Deep Bunker Infrastructure Procurement Scenario and in the three procurement documents may be in breach of probity principles and Commonwealth Procurement legislation and policy.The bulk of the marks for the assignment will be awarded in accordance with the following rubric: 

1 Identifying issues and making suitable recommendations in relation to the

Commonwealth Government’s proposed procurement strategy in response to the

2020 Bushfire Economic Stimulus Plan.

5 marks
2 Identifying issues and making suitable recommendations in relation to issues in the

Probity Plan.

10 Marks
3 Identifying issues and making suitable recommendations in relation to issues in the

Deep Bunker Infrastructure Conditions of Tender.

5 Marks
4 Identifying issues and making suitable recommendations in relation to issues in the

DWKM Procurement and Evaluation Plan.

15 Marks
5 Identifying issues and making suitable recommendations in relation to issues in the procurement and tender processes undertaken by DWKM. (These are issues that relate to deficiencies in the procurement process, rather than deficiencies you have

identified in elements 1-4).

15 Marks
6 Bonus – Marks awarded at the Unit conveners’ discretion for excellent analysis or

for commenting upon a very subtle error or issue.

Up to 5

Please note that the total marks available to achieved from the assignment is 55. The best grade that can be achieved is 50/50. The bonus marks are there to give me some flexibility in the fixed marking scheme to reward quality work (and so you won’t panic if you think you did not find every procurement law Easter egg).

The assessment materials contain deliberate errors I have placed in the procurement documents and the procurement processes described. I am looking for students to apply what we have discussed in the first four lectures and workshop days and demonstrate their understanding of the legislation and policies that govern Commonwealth procurement by identifying those errors and proposing appropriate suggestions to remedy the errors.

 ‘Deep Bunker Infrastructure Procurement Scenario’.

On March 23rd, 2020 the Prime Minister announced a Federal Government initiative to fund the construction of infrastructure projects through New South Wales, Victoria and the Australian Capital Territory to assist in the recovery of native animal stocks from the 2020 Bushfire Economic Stimulus Plan. As part of that Economic Stimulus Plan the Federal Executive has elected to fund the Department of Wombat and Koala Management to deliver the infrastructure through a series of outsourced construction procurements. An Appropriation Bill (Wildlife Infrastructure) 2019-2020 is scheduled to be tabled in the Federal Parliament in October 2020 (the Federal Executive wishes to defer the expenditure until after it reports a budget surplus in May 2020).

On April 1st, 2020, the Department of Wombat and Koala Management (DWKM) (A Federal Government NCCE) was advised by Cabinet that they would receive $150,000,000 under the Economic Stimulus Plan to construct fire resistant animal shelters in the Namadgi National Park in the Australian Capital Territory and that DWKM should plan to conduct the associated procurement with utmost haste. Based on recent research into how wombats saved other wildlife by creating deep tunnels, DKWM plans to have constructed approximately 100 ‘deep bunkers’ which can be used by a range of wildlife to avoid future fires (Deep Bunker Infrastructure Project). DWKM’s annual Procurement Plan (published on-line via Austender) was updated on the 3rd of April 2020 to announce a “procurement of construction services for wildlife recovery, in the range of $100-$150 million in May 2020, with tender documents downloadable from Austender”.

The DWKM Project Director created a Procurement and Evaluation Plan, which identified the following issues:

  • An estimated cost of between $78,000 to $100,000 to construct each bunker;
  • That the procurement would entail construction services;
  • At least eight firms who operate in the Canberra area have the construction expertise to construct the bunkers;
  • A lack of expertise within DKWM in both designing and managing construction services and procurement processes;
  • Significant concerns about the potential for the construction services to start further fires, likely further damaging the fragile wildlife

(A copy of the Procurement and Evaluation Plan is a provided as a separate document for this assignment. The Procurement and Evaluation Plan provides more details on the identified issues and mitigation strategies identified.)The DWKM Project Director also drafted a ‘Probity Plan’ to cover the probity processes that would be

conducted during the Deep Bunker Infrastructure Project.

(A copy of the Probity Plan is a provided as a separate document for this assignment.)

The Procurement and Evaluation Plan recommended that external consultants be engaged to prepare the design documents for the proposed tender and a separate consultant be engaged to support the procurement activities. The DWKM Delegate approved the recommendation to engage external consultants to prepare the design documents but did not approve the engagement of external procurement staff.

A limited tender for Environmental Design consultants was conducted through DWKM Standing Offer 298776 (This is not a real Standing Offer but is valid for the purposes of this Assessment exercise) on April 6th, 2020. Six firms on the panel were asked to tender (The Technical Tender) on providing two consultants for a twelve-month period, to develop design documents for the procurement and to act as technical evaluators on the Deep Bunker Infrastructure Tender (the DBI Tender). Six firms responded to the Technical Tender, with Cuddly Engineers Pty Ltd (CE) being selected as the preferred tenderer. After some minor negotiations, a contract for $750,000 (GST inclusive) was awarded to CE on April 26th. CE supplied two of their staff, Richard Grommet and Jennifer Wallace to conduct the scope of the Technical Tender. The contract placed no restrictions on CE, in relation to CE participating as a tenderer in future DWKM procurements.

In conjunction with DWKM staff, the two CE staff helped prepare:

  1. A Request For Tender (RFT), including the Deep Bunker Infrastructure Conditions of Tender; and
  2. A Statement of Requirement (SoR).

(A copy of the Deep Bunker Infrastructure Conditions of Tender is provided as part of the procurement documents.)

On the 7th of May 2020, the DBI Tender was released via AusTender as an open tender. The tender featured electronic tender documents available through Austender and with tender responses to be lodged via Austender. The closing date for tender responses was the 25th of May 2020.

An Industry Brief for potential tenderers was held at the National Arboretum on the 12th of May 2020. Twelve potential tenders attended the briefing.To the DWKM project teams’ surprise senior executives of CE attended the Industry Brief and announced that CE planned on tendering for the design and construction of the bunkers. The Tender manager for one of the potential tenderers, EnviroFriendly, privately, approached the DWKM Project Director. EnviroFriendly planned to bring two experts out from Canada to conduct the Design Concept Brief (Deep Bunker Infrastructure Conditions of Tender Clause 5.4.1) but due to CONVID-19 quarantine their experts would not be able to be present at the Concept Brief until 28 May 2020. EnviroFriendly would bring the two experts out to Australia (at a cost of $70,000 GST inclusive) if DWKM would guarantee an extension. DWKM advised that EnviroFriendly needed to submit a formal request for a tender extension but there should be no problems with ‘granting a one or two day extension’. On the same day the EnviroFriendly Tender Manager instructed the two Canadian experts to fly out to Australia. On the 14th of May, EnviroFriendly submitted a formal request for three days extension. The DWKM Project manager approached the DKWM Delegate for approval of the extension, explaining the circumstances and the two experts had entered quarantine in Australia. The DWKM Delegate declined to extend the tender period, citing the Executive Cabinet mandate for urgency.

On the 15th of May, Richard Grommet announced that he was leaving the Technical team immediately, as CE were recalling him to work on an unstated ‘tender’. CE were supplying a suitably qualified replacement who would start on the following Monday. The DWKM Project Director had some concerns about the departure but was confident that it was covered under a conflict of interest declaration that Richard had signed. A search of the document register was unable to locate a signed conflict of interest declaration from Richard Grommet or Jennifer Wallace. Jennifer has indicated she will be staying on and completing the contract, though it has come up in conversation that she is married to Richard Grommet.

It is now the 22nd of May, so far neither of the Canadian Experts have shown any symptoms of CONVID- 19 and are scheduled to be released from quarantine on 28 May.

At 3pm on the 22nd of March, the DWKM Project Director receives a call from DWKM Legal. The DWKM legal officer advises that he has just had a call from a lawyer representing EnviroFriendly. EnviroFriendly intend to lodge a complaint under the Government Procurement Judicial Review (GPJR) Act, citing breaches of the relevant sections of Division 1 and Division 2 of the Commonwealth Procurement Rules.

The DWKM now seeks an urgent probity audit of the Deep Bunker Infrastructure Procurement. He needs to understand what probity and procurement breaches may have occurred in the procurement and what he should do about them, including but not limited to:

  1. whether the procurement documents will stand an audit from the Australian National Audit Office;
  2. what he can can do about CE’s involvement in the tender process and as a prospective tenderer;
  3. what impact the GPJR complaint may have;
  4. whether the GPJR complaint has any legitimacy;
  5. what he can do about the GPJR complaint; and
  6. any other procurement or probity issues you identify

Late on Friday afternoon the DWKM Project Director provides a verbal brief of the facts (as stated in the Deep Bunker Infrastructure Procurement Scenario), hands you a set of the three procurement documents and asks you to complete the Probity Advice by 10am on Monday the 25th of May 2020.

HINT: Please always make use of Commonwealth Procurement Rules and Government Procurement Judicial Law. It is advised that while writing the probity, more usage and quoting sections this two documents will attract very good marks. As far as possible, please support the writings with these 2 documents.

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