Based on government procurement legislation, policies and government announcements as at the date of this publication, the following options are available to contracting authorities to procure goods, services, and works urgently during the COVID-19 pandemic:
Accelerated procurement procedures territory by territory
Commonwealth: The Commonwealth Procurement Rules do not apply to the extent that an official applies measures determined by their accountable authority to be necessary to protect human health , see rule 2.6. This would allow for expedited procurements. Additionally, where a proposed procurement does not meet a relevant procurement threshold or other conditions are met, agencies can proceed by way of ‘limited tender’, see rules 10.2 to 10.4, in which case certain standard requirements — including the requirement of an open tender process — will not apply under the Commonwealth Procurement Rules, which would likely speed up the procurement process.
New South Wales: In an emergency situation, which the NSW government has confirmed includes the current COVID-19 pandemic, the head of an agency can approve procurements up to a value sufficient to meet the immediate needs of the particular emergency, without the need to follow ordinary procurement requirements or procedures.
South Australia: The State Procurement Board has released the COVID-19 Major Emergency Procurement Policy, which applies to all procurement operations that could not reasonably be undertaken in accordance with the standard State Procurement Board requirements. The policy allows the standard requirements to be waived provided that:
- Financial authorizations are still obtained.
- Regard is given to standard requirements to the maximum extent possible.
- A register of procurement under the policy is maintained, which records the justification for procurement operations.
- The procurement aims to achieve value-for-money objectives, minimize the risk of fraud and corruption and, where possible, be purchased at a local level for expediency
Queensland: The Queensland Procurement Policy remains in place during the COVID-19 pandemic. However, various changes have been made, including new short-form ICT contract templates for emergency ICT procurement during the pandemic. This can be used if certain conditions are met, including that the agency is responding to one of the emergency response categories outlined in the Queensland government’s emergency procurement guide.
Tasmania: Procurement may be conducted by a limited tender in the case of extreme urgency brought about by events that were unforeseeable by a government agency or if the procurement is under a specific value threshold.
Victoria: Victoria’s market access policy provides for critical incident protocols and processes to apply where a critical incident is declared to exist in relation to the operation of procurement processes for certain specified reasons. This has the potential to allow standard timelines to be accelerated.
Australian Capital Territory, Northern Territory and Western Australia: No specific guidance on accelerated procedures in emergencies was readily available at the time of this publication. But where single-sourcing/direct awards are permissible, see below, and used, this may result in shortened procurement timelines.
Permissible direct awards across Australia
Commonwealth: Yes, if the relevant procurement threshold is not met or if another condition for a limited tender is met, see above. In the case of a limited tender, a Commonwealth agency may conduct procurement by directly approaching one or more suppliers to make a submission.
Australian Capital Territory: A territory entity must seek at least one oral quotation from a supplier for work that is valued at less than AUD 25,000, which may result in a direct award if only one supplier is approached. For procurements of a greater value, the responsible chief executive officer for the territory may grant an exemption from requirements to obtain multiple quotations or run a public tender if satisfied, on reasonable grounds, that the benefit of the exemption outweighs the benefit of compliance with the requirement. Guidance is available here.
New South Wales: In an emergency situation, which the NSW government has confirmed includes the current COVID-19 pandemic, agencies are exempt from complying with many standard procurement requirements, including policies or directions of the Procurement Board and requirements to use whole of government contracts or mandated pre-qualification regimes. This opens the door to more direct sourcing by individual agencies during COVID-19.
Northern Territory: A government agency may use direct contracting with the approval of the delegate, with the power or function under the procurement rules, where it is impractical or impossible to use an open procurement process, but only if the contract will be:
- In the form of lease, license agreement or substantially nonstandard contract.
- An extension or renewal of an existing contract.
- For the support or maintenance of existing software, systems or assets.
- For goods or services to be delivered in a remote area from a legal entity whose full-time personnel is made up of a minimum of 30% Aboriginal people as per exemption 6.3.4 E10 O. Remote Procurements.
Queensland: the Queensland government’s emergency procurement guide for government agencies states that, during this emergency period, agencies may purchase from a supplier with a minimum of one quote if the delay involved in securing essential supplies will prevent them delivering the goods or services in time to meet critical Queensland community needs that preserve life, safety and well-being.
South Australia: Procurement may be undertaken through direct negotiation by directly approaching and negotiating with one or more suppliers without testing the market. Usually this occurs when comprehensive market research indicates that there is a limited supply market, and it remains subject to procurement policies and procedures.
Tasmania: Due to reasons of extreme urgency brought about by events that were unforeseeable by a government agency, procurement may be conducted by a limited tender by inviting a single tender participant. A limited tender may also be undertaken for procurement under a specific value threshold.
Victoria: Victoria’s market access policy provides for critical incident protocols and processes to apply where a critical incident is declared to exist in relation to the operation of procurement processes for certain specified reasons.
Western Australia: Public authorities may utilize direct sourcing for procurement up to AUD 50,000, or if an emergency situation arises.
Other options available to contracting authorities
Examples of other options available to contracting authorities in Australia during the pandemic are:
Commonwealth: For Commonwealth procurement under AUD 1 million, Commonwealth entities may use the Commonwealth Contracting Suite (CCS), which is designed to simplify procurement processes. Use of the CCS is mandatory for non-corporate Commonwealth entities for procurement under AUD 200,000. Where CCS is used, this may result in more efficient procurement. The current situation may mean the CCS is more readily used than before.
New South Wales: Government guidance suggests:
- Identifying critical contracts and mitigating any supply risks as much as possible before they turn into major disruptions.
- Considering varying or extending existing contracts to cover immediate needs.
- Delaying non-critical procurement activities.
- Considering ways to combine orders and/or deliveries with other agencies or nearby businesses.
- Accepting reasonable variations to contract terms arising from the COVID-19 situation, e.g., delivery timeframes, volumes, temporary cost increases
Queensland: The Queensland government’s emergency procurement guide recommends, amongst other things:
- Using ‘short form’ terms and conditions and contracts for essential supply, where appropriate.
- Considering increasing the use of small and medium enterprises, and innovative proposals.
- Considering whether standing-offer agreements nearing expiry should be extended, and exercising appropriate contractual variations or extension clauses
Victoria: As mentioned above, Victoria’s market access policy indicates that, during a critical incident, all other supply policies do not apply to the extent that the critical incident makes it impractical to apply them. This may allow agencies significant flexibility in how they run a procurement during the pandemic.
Critical goods and services
Examples of the approach to supply of critical goods and services in Australia during the pandemic are:
Commonwealth: The Commonwealth Procurement Rules do not apply to the extent that an official applies measures determined by their accountable authority to be necessary for the protection of essential security interests, see rule 2.6. This exemption reflects the exemption provided for in the Australia-US Free Trade Agreement and will facilitate an expedited and more streamlined procurement process for critical defense goods and services without the application of the Commonwealth Procurement Rules. While it is not expressly directed at supply of critical goods and services, it could potentially be applicable to assist with procuring such supplies if needed, noting the Australian Defence Force is being deployed to assist with providing medical and other support.
New South Wales: the NSW government has opened an emergency supplies registration portal for suppliers that have the capacity to provide critical supplies, raw materials or manufacturing capability to produce critical supplies during the COVID-19 crisis. The State Emergency Operations Controller (SEOCON) is coordinating procurement of critical goods and services during the COVID-19 pandemic. Specified agencies are responsible for managing the procurement of each product. Government agencies are told not to procure these critical items without approval by the SEOCON or their delegate, and to contact their cluster’s chief procurement officer if critical item supplies are needed.
Queensland: Queensland Health has created a dedicated portal for supplier and industry EOIs during the COVID-19 pandemic, which refers to a simplified process for existing and new suppliers of COVID-19 items, consumables, equipment and PPE.
Victoria: The Victorian Department of Health has stated that it is working on developing a COVID-19 Personal Protection Equipment and Consumables Plan, and Health Purchasing Victoria is stated to be working on establishing a ‘buffer’ stock of essential items, with centralized ordering.
Baker McKenzie’s Public Procurement World: more information about the world’s most important public procurement laws and guidance in light of the global COVID-19 pandemic.