Discredited tourism body Tourism Australia has received another body blow, with a savage auditor-general report revealing systemic flaws in the agency’s procurement processes, involving contracts totalling $370 million.
The Australian National Audit Office (ANAO) report — described by one person close to Tourism Australia as “pretty shocking but not surprising” — examined how the beleaguered agency went about 33 major procurement processes and managed significant contracts.
Its findings are damning, leading the ANAO to conclude that Tourism Australia neither complied with the Commonwealth procurement rules nor demonstrated that it achieved value for money as it spent hundreds of millions of dollars.
According to the ANAO:
- 70% of the procurements examined didn’t feature open competition, and more than a third featured no competition of any kind (there were three procurements where the documentation was so poor the ANAO has no idea what kind of process was used);
- For 10 of the procurements — nearly a third — Tourism Australia simply stuck with existing or previous suppliers, defeating the purpose of open competition;
- For around half the procurements, Tourism Australia couldn’t show it had achieved value for money, often because it didn’t bother keeping records. Around half the procurements had key documents missing from the agency’s records;
- More than half of the contracts didn’t include any performance requirements. A third of contracts were varied, including with big increases in payments, with no appropriate documentation of why they were varied, costing millions of dollars. Sometimes, variations were retrospective for work already done;
- Tourism Australia paid contractors before receiving what it had contracted for, or handed out lump sums instead of milestone payments, or overpaid suppliers.
The lack of competition, the lazy reliance on reusing existing suppliers rather than opening tenders to competition, the poor record-keeping and the reflexive tendency to vary existing contracts to address requirements that should be the subject of new processes — are all familiar themes from ANAO examinations of procurement across the Australian Public Service.
Tourism Australia managed an unusual achievement in its failings to comply with the Commonwealth procurement rules. Generally, probity advisers are brought in to advise on and provide assurance for significant procurement processes, acting as a third party offering an independent set of eyes on the process and advising on how to ethically deliver outcomes that have integrity and fairness. The whole point of probity advisers is that they are disinterested participants focused on the integrity of the process, not the interests of any of the parties involved.
Tourism Australia relied heavily on using the same probity adviser — NTT Australia — over and over, creating the appearance, even if not the actuality, of a conflict of interest. NTT would potentially have had less incentive to be frank about Tourism Australia’s process failings if it had an expectation it would be hired again for the next procurement.
But worse: “As at 30 June 2024, there were no records maintained in TA’s systems demonstrating how NTT’s services had been procured. In July 2024, TA advised the ANAO that ‘The total value was below $100k so formal tendering documentation was not required.’”
That is, there was no probity around the way Tourism Australia hired its probity adviser — a singular achievement that elevates the agency above run-of-the-mill public service procurement failings. Then Tourism Australia extended the contract with NTT Australia after it had expired, extended it again, varied the contract (which only allowed for two extensions) to extend it yet again, then “continued to engage NTT’s services in 2023 without a contract being in place”.
That’s some cracking probity, right there.
Then when ANAO checked what NTT had actually done for Tourism Australia, it turned out the agency had only used NTT for “largely … reviewing the procurement plans and evaluation reports” rather than having NTT integrated properly into the procurement processes and advising on every step of the process.
This unusual accomplishment of Tourism Australia aside, this is yet another ANAO report demonstrating the procurement within the APS is characterised by poor process, bias, waste of taxpayer money and lack of integrity. And these are the procurements we know about because the ANAO examined them, which is the tiny tip of an enormous iceberg.
In just the last week of November, for example, AusTender (to which Tourism Australia didn’t report its procurements properly) recorded the publication of contracts worth $522 million across the Commonwealth. How many of those lacked competition? How many were variations or extensions of existing contracts without the agency going back to the market? In how many was the fix in for the existing supplier? How many agencies are like Tourism Australia, or the Passport Office, in their cavalier disregard for the rules around procurement?
It won’t be until public servants, including SES officers right up to agency heads, start being sacked for breaches of the procurement rules that the APS will take seriously the way it handles taxpayers’ money.
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