The Victorian Government has reportedly ordered a review of the Centre for IT Excellence’s (CenITex’s) procurement practices. The review, reported by Fairfax,coincides with an investigation of the same incident by Victoria Police.
Earlier this month, the Fairfax press reported that two of CenITex’s project managers had mis-used their positions on a tender selection panel to award their company a data hosting contract worth $145,000. Through additional work, the total amount paid to the company rose to $1.5 million. It is reported that CenITex failed to vet the two-day old company set up by its staff before handing it the contract.
Such procurement problems have parallels within the NSW Government, where poor procurement practices have led to an Independent Commission Against Corruption (ICAC) inquiry into supplier impressions.
55 percent of respondents indicated that improper favouritism occurred typically in NSW and 48 percent said that the offer of gifts and benefits over $20 was widespread.
The NSW ICAC report made seven recommendations on ways to address perceived corruption in New South Wales (all of which have been accepted by the Government), and the Victorian review is likely to tread the same ground:
- “first, establish a procurement leadership role in New South Wales;
- second, undertake a comprehensive review of the New South Wales Government approach to procurement;
- third, simplify the regulatory framework in New South Wales;
- fourth, align local government and State procurement policy;
- fifth, improve information, advice and support;
- sixth, build procurement competence; and
- seventh, oversee policy compliance.”
According to the Victorian Department of Treasury and Finance Fact Sheet , ICT procurement in Victoria is currently managed variously by agencies, depending upon the nature of the ICT good or service being procured:
- DTF oversees all whole-of-government ICT policy and whole-of-government contracts, such as the eServices Panel;
- CenITex has authority over the operational side of ICT and procures common ICT products and services on behalf of its six (soon to be eight) client departments; and
- The procurement of all business-specific ICT goods and services is left up to the specific departments and agencies.
Not only is the tendering process within CenITex likely to come under greater scrutiny as a result of the reported review, but any recommendations are likely to embrace all three components of procurement activity.
As part of the Efficient Technology Services program, VicRoads, Victoria Police and the Department of Education and Early Childhood Development (DEECD) are currently transitioning their ICT functions to CenITex.
While some of the existing ICT contracts signed by these bodies will be transferred over to CenITex with them in the short term, the shared services agency is looking to rationalise contracts in the medium to longer term.
The CenITex case is not the first instance of questionable procurement to take place within the Victorian Government this year.
In June the Victorian Ombudsman found that a local toner supplier had been distributing gifts to purchasing officers across the Victorian public sector. The supplier had won $260,937 worth of government business without being party to the state contract for this particular category of provision, nor by being competitively priced.
The Ombudsman George Brouwer recommended that the agencies involved, most notably Arts Victoria, undertake an audit of all procurement activity, a review of management and the training of all staff in their obligations under the public service code of conduct.
He also recommended that oversight of purchasing officers at Arts Victoria be increased. Nearly all of these recommendations were accepted.
These two incidents sit within the broader context of an intention by the Baileau government to establish an Anti Corruption Commission. However the establishment of the Commission, which will replace the Office of Police Integrity, has been delayed. According to reports, the state government will not launch the commission until the Commonwealth Telephone Intercept Act is amended to give investigators powers to monitor phone conversations.