Abbott would cut 80 procurement panels to one

The Coalition would create one single Commonwealth procurement panel to replace the 80 it estimates are currently in operation across the government, if it wins power at the Federal Election later this year.

The Coalition’s policy to “boost productivity and reduce regulation” is aimed at cutting $1 billion a year in “red and green tape”. 

Should it be elected the Coalition said it would “improve administration” of Commonwealth procurement by establishing a single, rationalised Commonwealth procurement panel to “administer a centralised register of service providers who wish to contract with the Government”.

The register would cover all firms currently appointed under the panels and would be run by the Department of Finance. 

“The point of that is to maximise their buying power, but to the extent you get one centralised body doing this, you get the benefits of that and you get to rationalise the number of panels running around different portfolios,” Senator Arthur Sinodinos, Shadow Parliamentary Secretary to the Leader of the Opposition, told iTnews.

“And if you’re re-tendering you don’t have to resubmit all your information.”

Sinodinos said the Coalition had arrived at the 80-panel figure based on discussions with the private sector, but said it could be much higher. He said IT would be included within the panel but the Coalition was consulting on how to do that effectively.

“Because of the specialised nature of IT we want to have further discussions about how the elements of that would work. We’re conscious the Government have made decisions about how to do IT that hasn’t always gone as according to plan,” he said. 

The Coalition is aspiring to a model similar to the NSW Government’s Procurement division of the state Department of Finance and Services, which negotiates, manages and implements public sector contracts.

“Across portfolios we want to have a ministerial advisory council made of business, not-for-profits and consumers impacted by that particular portfolio,” Sinodinos said.

The Coalition is awaiting further information from NSW Procurement on how much it can expect to save with the consolidation project. 

Sinodinos declined to comment on how many federal staff would be redeployed to resource the panel, but said staff re-allocation was a factor in the overall policy.

“[Staff resources] would ultimately be a matter for the public service. The heads of Finance would determine how many they’d need. And Finance would have a good eye on how they make this efficiency-inducing and savings-positive.“

Consultation with service providers revealed the cost of registration per panel was $40,000 or more, the Coalition said.

“There is increasing evidence that Commonwealth procurement processes sometimes impose unnecessary compliance costs on both the Commonwealth and the business community.”

The party also promised to standardise contractual arrangements for similar goods and services purchased by the Government, and increase the threshold for sole source contracts to an “appropriate amount”. 

“This will reduce the cost of procurement for the Commonwealth and service providers for relatively low amounts of money,” it said.

The Department of Finance did not confirm the figure the Coalition provided for whole-of-government procurement panels, nor the average cost per panel registration by the time of publication.