The Government today has fully or partially accepted all 60 recommendations of the SA Productivity Commission report from the second stage of its inquiry into public procurement.

It plans to establish a new, central procurement branch within the Department of Treasury and Finance to replace the State Procurement Board and repeal the State Procurement Act, in favour of a new “streamlined framework”, applying to all agencies.

The new branch of Treasury is to be led by a senior executive – reporting to the Treasurer via the department’s chief executive – who will work with the Office of the Industry Advocate to “reduce the complexity, time and costs associated with tendering for government work”.

Another report, by the cross-party Statutory Authorities Review Committee of Parliament, also released today, recommends the abolition of the State Procurement Board.

The committee found that Board had provided advice to a responsible Minister relating to procurement operations of public authorities only once since 2004.

The Board, moreover, was “not in a position to adequately achieve its functions and to enable the necessary balance required for local business participation in Government tenders and providing value for money for the state,” the report says.

The committee also found that the Board’s Chief Procurement Officer position had been left vacant since November 2018, and “the very need for such a role shows, in the Committee’s view, that the Board was not in a position to provide this important function”.

Lucas said the new “framework”, informed by the Productivity Commission and Committee reports, would improve businesses’ access to these contracts by cutting “red tape”.

“The Marshall Liberal Government is committed to maximising the value to taxpayers from this expenditure while creating a unified and consistent approach to procurement across government that enhances opportunities for local industry and South Australian businesses to be involved,” said Lucas.

He added that the Government spends more than $11 billion each year purchasing goods, services and construction activities each year.

In accepting the recommendations of the SA Productivity Commission’s report today, the Government has promised to:

• Simplify and standardise financial thresholds in agency procurement processes;
• Develop a single set of standards for, and improve the monitoring of, ‘single-supplier’ tenders;
• Clarify the State Government’s official position on the ownership of intellectual property;
• Launch an accreditation process to assess agencies’ capacity to procure contractors for small and specialised construction projects;
• Shift focus away from a series of financial thresholds as the key ‘procurement decision gateways’, to a smaller number of financial thresholds that incorporate holistic considerations of risk, complexity and capability, and;
• Implement annual reviews of each agency’s value thresholds.

The report singles out the Department of Planning, Transport and Infrastructure, recommending it finalise the development of “standard contracts” for all construction projects within nine months.

The Government has agreed to do so, but within 12 months.

The report also recommends that the Government addresses “inappropriate uses” of agency rebates, site access fees and requests that tenderers contribute to charity.

But the Government has only “partially” accepted another recommendation – to publish the formula used to select the winner of each tender – arguing that “the current requirements provide sufficient transparency”.

However, it concedes “there is an opportunity to improve the guidance and education provided to agencies”.

You can read the Government’s full response to each of the SA Productivity Commission’s recommendations below.

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And you can read the parliamentary committee’s report from its inquiry into the State Procurement Board below.

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