Procurement Risk:
Moderate
Score:
64/100
Government Policy
Q57
63/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Following a 2014 overhaul of procurement rules and principles, all defence and national security…
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The relevant legislation, legislative instruments and policies do not directly use the word “corruption” or any derivatives thereof. However, there are several references to…
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There is some indication through media, parliamentary inquiries or audit reports that the legislation on defence procurement is not thoroughly implemented and followed. It…
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Q58
75/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The Defence procurement cycle is broadly explained in the Defence Procurement Policy Manual (DPPM) [1] and in more detail through the Capability Life Cycle…
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The Defence Procurement Policy Manual (DPPM) is fully available online [1], as is the Integrated Investment Program 2016 (IIP) [2]. Despite these processes being…
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While it is clear that there is at least a semi-formalised procurement cycle process [1, 2], the extent to which these are detailed in…
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Q59
75/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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All defence procurement can be subject to external audit by the Australian National Audit Office (ANAO), though only a small portion procurements are audited,…
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Defence procurement oversight is active but has been criticised for being superficial. External auditors have historically had trouble getting defence to follow recommendations and…
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While reports from the Australian National Audit Office (ANAO) are readily available online, the level of information they provide to the public is not…
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The 2016 Defence White Paper [1] and complementary Integrated Investment Plan (IIP) [2] contain advanced long-term planning of defence procurement; however, the IIP has…
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Detailed notice of planned purchases publicly occurs up to one year in advance through the AusTender website, though the level of comprehensiveness is low…
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The Commonwealth Procurement Rules (CPRs) clause 7.18 provides that “Relevant entities must report contracts and amendments on AusTender within 42 days of entering into…
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AusTender has extensive search functions available for approaches to market [1], contracts [2], and standing offer notices [3], which include tender data. The results…
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Capability Gap and Requirements Definition
Q62
63/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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There is some high-level procedures on how government discriminates in its selection of suppliers, and in some cases, companies are required to sign clauses…
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There is limited evidence of Department of Defence (DoD) compliance or non-compliance specifically with the standards and procedures around non-corrupt behaviour in practice, however,…
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Q63
83/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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The 2016 Defence White Paper states: “The Government’s policy is to align Australia’s defence strategy with capabilities and resourcing…” [1]. Complemented by the 2016…
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The Australian National Audit Office (ANAO) is the main independent audit body which provides regular performance audits on selected defence procurement projects [1] and…
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Final defence procurement decisions are made by the Capability Acquisition and Sustainment Group (CASG) within the Department of Defence [1]. The Defence Procurement Policy…
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Tender Solicitation, Assessment and Contract Award
Q64
25/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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While the Commonwealth Procurement Rules (CPRs) give clear preference to open tenders, saying that limited tenders (which may include single sourcing) should only be…
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While under the Public Governance, Performance and Accountability Act 2013, the decision to enter into a limited tender – including a single-source tender –…
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Q65
63/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Officials in charge of procurement decisions are subject to rules on conflicts of interest, but financial disclosure reports are not required. Officials who design…
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Based on public reports from the Australian National Audit Office (ANAO), audit trails exist at least some of the time and oversight agencies do…
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Though there is no tender board code of conduct as such, the codes of conduct for civilian (the Australian Public Service Code of Conduct…
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The Australian National Audit Office (ANAO) may chose to verify particular specifications of a tender process as part of its performance audit process [1].…
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Q66
56/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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The Competition and Consumer Act 2010 defines the scope of “cartel conduct”, or collusive business practices, as “price‑fixing; or… bid‑rigging; by parties that are,…
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Australia has been criticised for not having a formal debarment regime to exclude companies accused of bribery, corruption, and anti-competitive practices, though procurement officials…
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The legal system in Australia is generally considered robust and without undue influence, with Australia ranked 12 of 126 countries for the quality of…
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There is no evidence that Defence procurement officials receive any training in mitigating and detecting collusive practices [1]. The ACCC in 2011 released guidelines…
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Contract Delivery and In-Service Support
Q67
81/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Though formal Department of Defence (DoD) contract reporting policies are not publicly available, it is highly likely that they exist in the Defence Contract…
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While procurement officials are required to publicly report and publish details of contracts and contract amendments over a certain value to AusTender [1, 2],…
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Contract monitoring reports and Defence policy through the Defence Contract Management Framework / Handbook are not publicly available; therefore, it is difficult to say…
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While the Defence Contract Management Framework / Handbook – which would likely provide more information on how breaches are dealt with and enforced –…
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Q68
92/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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The Department of Defence (DoD) has a formal complaint mechanism available to suppliers, with legal basis in the Government Procurement (Judicial Review) Act 2018…
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The Defence Procurement Complaints Scheme is easily accessible and readily understandable, with complaints being free to submit. Defence has a plain-language landing page about…
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The Department of Defence (DoD) has a legal obligation under the Government Procurement (Judicial Review) Act 2018 (JR Act) and the Commonwealth Procurement Rules…
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Australia has been criticised for not having a formal debarment regime to exclude companies accused of bribery, corruption, and anti-competitive practices, though procurement officials…
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The legal system in Australia is generally considered robust and without undue influence, with Australia ranked 12 of 126 countries for the quality of…
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It appears that corruption-related offences do not often attract sanctions, though a paucity of examples of procurement corruption investigated or prosecuted makes it difficult…
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Offset Contracts
Q70
100/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Since 2003, Australia has not allowed mandatory offsets to be enforced [1-3]. Though Defence has an Defence Industry Policy Statement [4] and Defence Export…
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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This indicator is scored ‘Not Applicable’ given Australia does not allow offsets to be a part of public procurement contracts.
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Agents / Brokers
Q73
NEI/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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Though patchwork Defence policy guidance on the use of agents does exist, and non-public Defence policy guides may contain a more comprehensive policy, public…
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Restrictions on the use of agents and intermediaries in the Defence procurement cycle appear to be limited, and as a consequence, there have been…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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While limited details of contracts that are valued over the reporting threshold must be publicly reported [1, 2], this does not include details of…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. There has been some hand-wringing over Australia’s close strategic relationship with its biggest ally,…
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This indicator is not assigned a score in the GDI. Australia consistently connects military procurement to strategic needs identified by government. Since the early…
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This indicator is not assigned a score in the GDI. Analysts, academics, and observers have documented several cases where procurement decisions were allegedly driven…
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