DTA blasted for ‘ineffective’ and ‘weak’ ICT procurement

The Australian National Audit Office (ANAO) has slammed the Digital Transformation Agency’s (DTA) procurement framework for ICT-related services, calling the process "ineffective" and "weak". 

The ANAO's report found the DTA’s procurement of ICT related services fell short across nine procurements examined and that contracts were not managed effectively. 

“The DTA has established a procurement framework, but its implementation and oversight has been weak,” ANAO said.

For the ICT-related procurements examined, ANAO found that the DTA did not conduct the process effectively and its approach fell short of ethical requirements.

“None of these procurements fully complied with the CPRs [Commonwealth Procurement Rules]. The DTA did not conduct an approach to market or tender evaluation processes effectively, and it did not consistently provide sound advice to decision-makers,” ANAO said. “The DTA’s frequent direct sourcing of suppliers using panel arrangements does not support the intent of the CPRs including the achievement of value for money.”

ANAO highlighted the DTA has not effectively managed contracts to deliver against the objectives of the procurements and to achieve value for money. In fact,  its management of one of the examined procurements fell particularly short of ethical requirements, with the DTA changing the scope and substantially increasing the value of the contract through 10 variations.

“The DTA has established governance and oversight arrangements for procurements, but there are weaknesses in these arrangements. The DTA’s Executive Board has had limited oversight of procurement risks,” the review tabled to Parliament said. 

“However, the DTA has not been following its internal policies and procedures, and there are weaknesses in its governance, oversight and probity arrangements for procurements.”

The ANAO's performance audit report, which excluded whole-of-government deals, was tabled to Parliament and examined a sample of nine procurements for ICT-related services undertaken by the DTA from 1 July 2019 to 30 June 2021. During 2020-2021 DTA’s expenses were $119.9 million, with $77.6 million used for procuring goods and services from suppliers. 

ANAO focused on the value, risk, relevance and type of procurement and included seven of the DTA’s nine highest value procurements over this period. 

The aim of the audit was to provide increased transparency of the DTA’s procurement framework, whether it was being conducted effectively and whether it was effectively managing contracts to deliver objectives and achieve value for money. 

The DTA welcomed the review and agreed with eight of ANAO’s recommendations, stating each of the sampled procurements still achieved their intended outcomes and supported critical delivery requirements. 

The nine projects that were examined included:

• myGov Upgrade Horizon (valued at $28 million and awarded to Deloitte)

• Hardening Government IT (HGIT) Program Support (valued at $8.5 million and awarded to CyberCX)

• COVIDSafe App Development (valued at $6 million and awarded to Delv)

•  MyGov Funding Case Support (valued at $4.9 million and awarded to Nous Group);

• GovDesk Development (valued at $2.3 million and awarded to Oobe)

• myGov and Digital Identity Charging Framework (valued at $2.2 million and awarded to ConceptSix)

• COVIDSafe App Enhancements (valued at $1.4 million and awarded to Shine Solutions Group)

• Record Management Software (valued at $522,000 and awarded to RecordPoint)

• Workflow Ticketing Software (valued at $127,334 and awarded to Zendesk). 

ANAO made three recommendations aimed at strengthening the DTA’s management of procurement risks and probity issues; strengthening processes for potential fraud and probity breaches and improving processes for declaring interests. 

A further three opportunities were also identified to improve probity guidelines by providing training on identifying and avoiding conflicts of interest and publishing a register of gifts and benefits received by the CEO.

This is not the first time the Audit office has discovered inefficiencies in DTA's contract dealings. In 2020, the DTA was also asked to brush up on federal procurement requirements after a review of IT panel arrangements showed it did not comply with all of the Commonwealth Procurement Rules (CPRs) — the basic rule set for all Commonwealth procurements.