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12 July 2017

Judicial review of procurement complaints welcomed

The Australian Small Business and Family Enterprise Ombudsman has welcomed the Government Procurement (Judicial Review) Bill as a “first step in the right direction” to provide small businesses with a legislated mechanism to raise complaints.

Ombudsman Kate Carnell says the Australian Government spends between $50-60 billion each year on goods and services.

In 2015–16, small and medium-sized enterprises (SME) accounted for 24 per cent of procurement by value ($13.7 billion).

Ms Carnell said the percentage, as a share of overall total value, had been steadily declining over the past three years.

“Our research and experience has highlighted several barriers to small business participation in government procurement processes,” she said.

“This has included an independent and effective complaints mechanism.”

The bill enables the Federal Court to grant an injunction or order payment of compensation in relation to a breach of Commonwealth Procurement Rules (CPR).

The bill’s current form allows a supplier to lodge a complaint regarding a breach of the CPRs with the relevant Commonwealth entity undertaking the procurement.

This must occur as a first step before a supplier can apply to the court for an injunction or other remedy.

“I welcome this but note there is a time limit imposed on filing with the court (of 10 days) which can be waived in certain circumstances,” Ms Carnell said.

“The timeframe for lodgement should take into account the requirement for the responsible authority to investigate the complaint.

“Alternatively, a timeframe should be placed on the authority to investigate and report on a complaint.”

Ms Carnell said it’s not clear if the bill allows subcontractor suppliers access to the complaints mechanism.

Another concern reflects the sole use of courts as a remedy.

“This is potentially an expensive and complex pathway for many small businesses due to the time and costs associated with obtaining legal advice,” Ms Carnell said.

“There is a role for the courts but I would also like to see an alternative dispute resolution process that offers lower costs and more accessible access to justice for small business.

“This could be provided by formalising the Ombudsman’s existing role and functions as a complaint avenue or through an Industry Advocate, as proposed by the recent Joint Standing Committee on Government Procurement.”