The Government Procurement (Judicial Review) Bill is planned to be introduced to the Commonwealth Parliament in its current Spring Session. Although the content of the Bill is not yet available, it is understood that the intention is to enable the Federal Court of Australia and Federal Circuit Court to grant injunctions or order compensation in relation to a contravention of the Commonwealth Procurement Rules (the CPRs) by Commonwealth entities, so far as the CPRs apply to 'covered procurements'.

If passed the Bill will likely effect a significant change to the law concerning tender challenges. Suppliers will have a statutory basis to challenge a tender decision for non-compliance with the CPRs, rather than having to overcome the current difficulties and processes to making such a challenge.

Context

In 2014, the Senate Finance and Public Administration Committee received submissions and considered the effectiveness of the processes available to business to complain about a procurement process. The Committee acknowledged that currently complaints should first be addressed internally by Commonwealth entities. It also noted the role of the Australian Government Procurement Coordinator. However, the Committee went on to state that if the matter was not resolved 'there appears to be a distinct lack of administrative or legal steps that a person can take'. To this end, the Committee went on to recommend that an independent and effective complaints mechanism for procurement processes be established.

Australia also has obligations in relation to procurement challenges by suppliers under international agreements to which it is a party. Chapter 15 of the recent Trans-Pacific Partnership Agreement (TPP) sets out obligations on government procuring entities in conducting 'covered procurements'. Among a range of other matters, it provides that each Party to the TPP must have at least one impartial administrative or judicial authority (Review Authority) to review a challenge or complaint by a supplier that there has been a breach of the Government Procurement Chapter obligations, arising in the context of a 'covered procurement'. The Review Authority is required to be independent of the procuring entities to review, in a non-discriminatory, timely, transparent and effective manner, a challenge or complaint.

The Government Procurement Chapter also requires that Commonwealth entities have procedures for:

  • prompt interim measures pending the resolution of a complaint, to preserve the supplier's opportunity to participate in the procurement and to ensure that procuring entities comply with the Chapter; and
  • corrective action that may include compensation.

The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether those measures should be applied.

The TPP provides that compensation for non-compliance with the requirements of the Government Procurement Chapter may be limited to the costs reasonably incurred in the preparation of the tender and/or in bringing the complaint. Whether the Bill takes up such limitation of liability for damages for contravention of the requirements remains to be seen.

Potential Implications

It appears that the Bill, if passed, may have significant implications for Commonwealth entities and suppliers in conducting covered procurement processes. Issues to be considered may include:

  • what changes to tender terms and conditions should be considered to integrate with the legislation;
  • whether 'no process contract' clauses should be retained in conditions of tender;
  • procurement process timing issues including around signing of contracts with preferred tenderers to accommodate the potential for a challenge;
  • the scope of what constitutes a contravention;
  • the nature and extent of remedies;
  • amendments to procurement policies and procedures;
  • informing delegates of the potential for challenges under the legislation; and
  • implications for other laws.

It is too early to express further what the implications may be without having reviewed the Bill. When the Bill is made available the MinterEllison Procurement Practice Team will issue a further update.