The NT Buy Local Advocate has once again been unable to conclude whether the Buy Local Plan increased government procurement through Territory businesses because of a lack of reliable and verifiable data, while his annual report also states some agencies have no way of judging if contractors provided what they were paid to do.
The fifth NT Buy Local Advocate annual report was released on Monday by Denys Stedman, taht was scheduled to be published in December but was delayed because of personal illness and a lack of resources. He did not expand on why he felt he had a lack of resources.
Mr Stedman made note that Business Minister Paul Kirby, and the Department of Business, no longer provide him progress reports on the government’s response to 21 recommendations previously made about strengthening and improving the procurement framework, the Buy Local Plan, and to enable meaningful measurement of the effectiveness of the Buy Local Plan.
The government data provided to Mr Stedman was only for tier two contracts and above, or those above $15,000, with 76.6 per cent of the 1783 contracts awarded to local enterprises, accounting for 90.6 per cent of the value of all contracts. It was the second lowest year for percentage of local contracts awarded with data going back to 2018-19 with the high point recorded as 81.5 per cent in 2019-20. That was the highest year of total value of local contracts awarded, with the low being 80.8 per cent in 2020-21.
“The data provided to me this year, which includes the comparative data for previous years, has again altered when compared to the data provided to me for these same periods last year,” he wrote.
“This is an example of why I continue to be uncomfortable to rely on statistical information extracted from the current government procurement recording systems.
“The absence of information continues to leave me unable to make a reliable assessment of the effectiveness of the Buy Local Plan based on verifiable data.
“I am unable to reliably report on the effectiveness of the Buy Local Plan until accurate baseline information is available, and given that the government has done nothing this past year to address this matter I consider that no progress has been made on this recommendation this year.
Mr Stedman added that problems have arisen by the government continuing to fail to implement a single whole-of-government procurement management system.
“I have been advised that this recommendation still does not fit within the government’s data strategy priorities,” he wrote.
“I find it difficult to understand why any large organisation such as the NT government does not see the benefits in having a single integrated procurement management and reporting system for use right across the organisation.
“As I noted last year two agencies have already implemented ‘off the shelf’ procurement management systems to support the management of parts of their procurement process, and during the last year I became aware that another agency had developed their own system.”
He said the Buy Local Plan was aimed at seeing the largest possible proportion of every dollar spent by the NT Government retained within, and delivering benefits, for the Territory economy and community.
“The above figures suggest that for the last financial year 2021/22 this objective has been met when compared to results obtained in all previous years,” he wrote.
But he warned, care needs to be exercised when drawing this conclusion, because data upon which the conclusion was reached did not cover all NT Government procurement spending.
Independent Commissioner Against Corruption referrals
Mr Stedman said he has referred two further matters to the Independent Commissioner Against Corruption. He said ICAC’s investigation of a matter he referred there in 2019 had been discontinued as the allegations were not substantiated.
However, the first matter referred to ICAC in 2022 remains under investigation as far as he was aware. While a second matter was referred back to the agency for review, who subsequently advised ICAC “they had undertaken a ‘cleanskin’ assessment of the procurement activity and determined that value for Territory was achieved and the assessment was fair, unbiased and objective” and ICAC took no further action.
Actions on his recommendations
Mr Stedman said he had made 21 recommendations to government from his last annual report with work implementing those recommendations having been completed, two having not progressed, 10 being in progress, four having had limited progress, two making significant progress, and one he could not comment on.
Aside from the failure to implement an integrated whole of government procurement management and reporting system, there was also no reported progress on a determination of accurate across-government baseline data to inform the assessment of the effectiveness of the Buy Local Plan.
Mr Stedmen said there was limited progress in the development of guidance for NT Government staff on how to assess value for Territory in tier 1 and 2 procurement, purchases under $100,000 that do not have to go out to tender.
A pledged improvement in the production and retention of relevant documentation to support defensible decision making was in progress.
Despite these recommendations, Mr Stedman noted that in November a government contract was awarded to an external consultant to review the procurement framework and practice to “identify opportunities to build and improve NT Government procurement practice and governance, and value for Territory outcomes”.
Some agencies have wanted to remove annual internal value for Territory audits because, “each year’s report provides little value to the agency as it keeps identifying the same findings” and “deliver little value to the agency”, Mr Stedman said.
“I argue that the identification of the same issues year on year is precisely the reason why these audits should continue, as the audits highlight an agencies inability or unwillingness to address the problems identified…Agencies need to address the root cause of the issues, not remove the process that identifies them.”
Contract management planning and contractor performance
There are requirements for each agency to develop contract management plans, ensure it has systems, processes and resources assigned to adequately manage the contracts, and have people in contract management who have necessary skills and training.
Mr Stedman said the value for Territory audit reports again identified poor contract management practices continue to be an ongoing non-compliance issue for many agencies, and while it had improved, breaches remained far too high.
“These concerns continue to reduce my confidence that the NT Government is receiving the level of goods or services it has contracted and paid for, and that due to the poor level of performance reporting, that it continues to deal with businesses that have not met an adequate level of service delivery in past contracts,” he wrote.
Agencies also must complete contractor performance reports, report on the contractor’s performance against local benefit commitments, and the contractor must be provided with performance feedback and given the opportunity to respond.
The agency also must provide a copy of the performance reports to other agencies to assist in assessments, and where contractor accreditation applies, the agency must provide Contractor Accreditation Limited with performance reports every 12 months and at the completion of each contract.
“Contractor performance reports are often not done, or are done without sufficient thought and candour that reflect the agencies true assessment of performance,” he wrote.
Agencies ‘were likely’ to have delivered satisfactory value for the Territory
Mr Stedman said he concluded all 19 agencies “were likely” to have delivered satisfactory value for the Territory through their procurements from 2021.
“This is the first time since the introduction of the Buy Local Plan that I have been able to reach this conclusion,” he said.
“….Notwithstanding the reservations I have expressed above, I have concluded that a very high percentage of procurement awards made by the NT Government in the last year are likely to have been determined based on the selection of the best value for Territory outcome as anticipated under the procurement framework.
“In my view the optimisation of the delivery of value for the Territory by the NT Government through its procurement processes in the period since my last annual report has improved to a level that is higher than in any previous period since the introduction on the Buy local Plan.”
Mr Stedman said measuring the effectiveness of the Buy Local Plan was subjective and continued to be a challenge due to the reliability of whole of government procurement data.
“For the fifth year running I urge the government to commit the resources required to introduce a procurement management and recording system capable of capturing and accurately reporting all of this information at both an agency and whole of government level,” he wrote.
The Northern Territory does not have a Government!
We have a collection of nests that need to be feathered by the tax payers dollar.
The NT Government is not handing Procurement data over to a auditor of that data?
The NT Government changes Procurement data that has been handed to a auditor?
You know what would happen if a business did this to the Government or a Auditor? The Fraud Squad gets called.