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Accountability

Purchasing and procurement

NHMRC performed its procurement activities in accordance with the Commonwealth Financial Framework, specifically the Commonwealth Procurement Rules (CPRs).

NHMRC’s Accountable Authority Instructions, as well as related policy and procedural manuals, support the CPRs and are periodically reviewed for consistency with the CPRs and the Commonwealth Procurement Framework.

Additionally, NHMRC undertakes, wherever possible, cooperative procurement practices by accessing other entities’ established standing offer arrangements, enabling an efficient and value-for-money approach to procuring goods and services. In the whole-of-government context, NHMRC will continue to comply with coordinated procurement initiatives, which reduce tendering costs and increase savings through economies of scale.

NHMRC builds capacity within the agency by providing procurement and contract management training, and circulating procurement and whole-of-government advice from the Department of Finance.

NHMRC publishes information on significant procurement activity expected to be undertaken in the year ahead in our annual procurement plan, which is available on the Australian Government’s procurement information system, AusTender. Details of all NHMRC contracts and consultancies valued at $10,000 and over are available on the AusTender website.

Contracts and consultancy services

NHMRC uses guidance published by the Department of Finance to distinguish between consultancy and non-consultancy contracts for annual reporting purposes.

NHMRC engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem, carry out defined reviews or evaluations, or provide independent advice, information or creative solutions to assist in the agency’s decision making, including the development of information and communications technology.

Before engaging consultants, NHMRC takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related regulations, including the CPRs and relevant internal policies.

In 2019–20, NHMRC entered into two new consultancy contracts involving total actual expenditure of $68,356.54. In addition, six ongoing consultancy contracts were active in 2019–20, involving total actual expenditure of $132,038.57. The total expenditure in 2019–20 was $200,395.11 (Table 11). Consultancy services of $10,000 or more are shown in Table 12.

Information on the value of contracts and consultancies is available on the AusTender website.

Table 11: NHMRC consultancy contract expenditure, 2015–16 to 2019–20

2015–16

2016–17

2017–18

2018–19

2019–20

Expenditure against contracts awarded ($)

575,021

289,230

282,674

368,003

200,395

Table 12: NHMRC consultancy services of $10,000 or more, 2019–20

Consultant name

Description

Contract price ($)

Selection process1

Justification2

Ginnane Consulting

NHMRC Audit Committee Chair

27,000.00

Limited tender

B

McGrathNicol Advisory Partnership

Provision of internal audit services

86,348.00

Open tender

B

1 Explanation of selection process terms from the Commonwealth Procurement Rules: Open tender involves publishing an approach to the market and inviting submissions, or by accessing a standing offer arrangement that was established through an open tender process; Limited tender involves approaching one or more potential suppliers to make submissions, where the process does not meet the rules for open tender.

2 Justifications for decision to use consultancy are (A) skills currently unavailable within agency, (B) need for specialised or professional skills, or (C) need for independent research or assessment.

Australian National Audit Office access clauses

All contracts entered into by NHMRC in 2019–20 provided for the Auditor-General to have access to the contractor’s premises.

Exempt contracts

NHMRC had no contracts or standing offers that were exempted from publication on AusTender in 2019–20.

Procurement initiatives to support small businesses

NHMRC supports small business participation in the Commonwealth Government procurement market. Small and medium enterprise (SME) and small enterprise participation statistics are available on the Department of Finance website.

NHMRC recognises the importance of ensuring that small businesses are paid on time. NHMRC achieved an on-time average of 91% of all payments to small businesses or individuals in 2019–20.

NHMRC employs the following initiatives or practices to support SMEs:

  • using the Commonwealth Contracting Suite for low-risk procurements valued at under $200,000
  • following the Small Business Engagement Principles, such as communicating in clear, simple language and presenting information in an accessible format
  • using electronic systems or other processes that facilitate on-time payment performance, including the use of payment cards.

NHMRC supports the Indigenous Procurement Policy; if there is an Indigenous business that can deliver any new domestic contract between $80,000 and $200,000 on a value-for-money basis, NHMRC must offer the contract to that business first.

Asset management

Asset management is not a significant part of NHMRC’s business. The agency’s assets include office fit-out, computer equipment, IT systems, telephony, furniture, and equipment held in Canberra and Melbourne.

NHMRC’s strategy for asset management emphasises a whole-of-life approach to the use of assets and commits the agency to responsible and cost-effective management. An annual review minimises holdings of surpluses and underperforming assets.

Advertising and market research

Under section 311A of the Commonwealth Electoral Act 1918, NHMRC is required to disclose payments of $13,000 or more (inclusive of GST) for advertising and market research. There was no reportable expenditure in this period.

Complaints

NHMRC has a complaints process for people who are dissatisfied with its decisions or actions. Generally, complaints are resolved within the area responsible for the decision or action, with an independent complaints team providing an oversight and escalation role.

On 23 March 2020, the Minister for Health reappointed Mr Chris Reid as Commissioner of Complaints for an additional 3-year term to 31 March 2023. Mr Reid has held this role since 2017. A solicitor of more than 30 years standing, Mr Reid brings considerable experience and expertise in investigation and administrative law.