Reforming Procurement, Contracting and Reporting Arrangements with the ACT Community Sector – October 2013
ACT Community Sector Reform Program
Overview of the Proposed Reforms
Appendix A - Procurement Reforms
Appendix B - Contracting Reforms
Appendix C - Reporting Reforms
Appendix D - contract and Relationship Management
Appendix E - Red Tape Reduction Reforms in Other Jurisdictions
Appendix F - Procurement, Contracting and Reporting Working Groups
Consolidated list of Recommendations
Recommendation 1. That existing SFA be reviewed to determine instances of funding that do not meet the definition of procurement in the Government Procurement Act 2001 and replaced by a more appropriate funding instrument
Recommendation 2. That all significant procurement not go to market without having first been the subject of community consultation around the delivery approach.
Recommendation 3. That the potential for increased co-development for new services be explored as a means of increasing the effectiveness of planned solutions.
Recommendation 4. That the CSD prequalification process be reviewed for lessons learned and for effectiveness and to ensure that benefits for the sector are achieved.
Recommendation 5.Following a successful review, a community sector prequalification framework consistent with the recommendations of the review be adopted for all ACT community sector procurement.
Recommendation 6. That the implementation of agreed reforms to procurement arrangements consider process improvements to improve the capacity of the community sector to engage in the process)
Recommendation 7. Taking account of risk, make use of the provisions within the Procurement Regulation to exempt from the threshold requirements where the benefit of these exemptions outweigh the benefit of compliance.
Recommendation 8. Establish a threshold and make payments under grants and SFA on an annual, six monthly or quarterly basis according to the threshold.
Recommendation 9. Explore the potential to make single payments on behalf of all funding agencies at the intervals determined under the recommendation above.
Recommendation 10. Directorates should consider a greater involvement of the Auditor General through selective audits of funding programs and ensure that this program extended to include community sector organisations that were delivering services on behalf of Government.
Recommendation 11. Ensure that contract managers in the ACT Government that deal with the community sector are adequately trained and supported to make recommendations where necessary around the reallocation of resources from and between community sector organisations.
Recommendation 12. A be developed to provide a guide to ACT Government agencies and community sector entities for the process of significant defunding, or the disengagement of the Territory and a community sector entity where this should become necessary.
Recommendation 13.Continue to monitor the performance of social impact bonds in other jurisdictions and explore further the potential for their use in the ACT.
Recommendation 14. That the ACT Government develop the infrastructure necessary to be able to establish or take advantage of joint ventures and partnerships in the reasonably near or medium term future).
Recommendation 15. Explore the establishment of a social innovation pool to cater for the testing of pilot, or risky ventures.
Recommendation 16. Use letters of intent to manage non-procurement funding arrangements for amount less than $100,000 per annum, subject to an individual assessment of risk in each case.
Recommendation 17. That a low-risk grant instrument be used for grants of up to $400,000, subject to an individual assessment of risk in each case.
Recommendation 18. That a high-risk grant instrument be used for grants of over $400,000, subject to an individual assessment of risk in each case.)
Recommendation 19. That a sponsorship instrument be used for very complex and potentially risky grants that do not represent procurement, and are not suited to the other instruments in the hierarchy.)
Recommendation 20. That better use be made of the existing two levels of SFA and that funding agreements for amounts less than, say, $400,000 per annum be transferred to the low risk instrument, subject to no significant risk factors being present.
Recommendation 21. That appropriate contractual instruments be developed to match the requirements of any co-investment procurement model agreed.
Recommendation 22. That the ACT Government explore the potential to introduce single contractual instruments with the community sector where practicable.
Recommendation 23. Extend the maximum term of a service funding agreement from three to up to five years and consider adding the provision for an extension by agreement of the parties for a further two years, subject to satisfactory performance or other factors.
Recommendation 24. Consider consolidated financial audits across all funding programs, to be shared between funding agencies and also consider the potential to include the Commonwealth in these.
Recommendation 25. Establish a calendar of performance audits to facilitate the potential for co-operation or sharing between ACT Government funding agencies.
Recommendation 26. Provide an opportunity for other directorates to participate in the development of a consolidated community sector reporting requirements dictionary currently being undertaken by CSD and ORS.
Recommendation 27. Eliminate duplicated and unnecessary reporting from the relationship.
Recommendation 28. Explore in more depth the potential to manage the ACT Government community sector reporting requirement on a whole of government basis.)
Recommendation 29. Explore with the Commonwealth the potential to share the management of community sector reporting with the objective of reducing the reporting burden on community sector organisations in the ACT.
Recommendation 30. That a common, ACT Government, standard for relationship/contract managers be developed, including the required skills;
Recommendation 31. That a common, ACT Government suite of training for relationship/contract managers be developed;
Recommendation 32. That the potential for whole of Government annual contract management meetings be explored;
Be in no doubt, this is about relationships
This project looks at what might be done to improve the effectiveness of important processes that tie the Government and the community sector together in the shared pursuit of positive social impact. But be in no doubt, despite the process and procedural nature of many of the Recommendations, this project is really about the relationships between the community sector and the Government.
The Social Compact between the ACT Government and the community sector speaks for the relationship in saying that ‘The ACT community sector and Government share a commitment to improve life for all Canberrans through participation in cultural, social, humanitarian, environmental and economic activities. To achieve this, the two sectors need to plan, learn and work together, building on existing strengths, encouraging innovation and making sound decisions informed by evidence’1
The significance of the relationship between Government and the community sector is increasingly recognised in other jurisdictions. Western Australia’s Delivering Community Services in Partnership Policy (2011) is clear that behaviours to reduce red tape arise from a collaborative and respectful relationship between Government and the community sector.
The Recommendations in this paper are designed to give greater impetus to an important aspect of the administrative relationship between the community sector and the Government and, in seeking to eliminate red-tape that provides a drag on the productivity of both parties, establish directions that will support greater commonality of practice and better overall co-ordination and co-operation between the community sector in the ACT and the Government agencies they deal with.
The real, longer term, strategic benefit will come from the way in which these reforms will support a stronger relationship with the sector. A common theme underlying many of the recommendations is the room that they provide for the use of judgement and choice by the parties and choice in the decisions around which process to use, judgement in how to respond to issues of risk and scale and the like.
These reform measures are a step towards the ways of thinking and acting that will be necessary to support the sophisticated, layered and mutually dependent relationship that will be necessary in the shared achievement of outcomes and in overcoming some of the ‘wicked’ problems that the parties grapple with.
The other relationship complexity that this paper and its Recommendations face is that in speaking at a whole of Government level, it may sometimes recommend what may already be good current practice for some agencies, and sometimes recommend changes that may seem too far for others. This is an inevitable risk, but the purpose of this whole of Government approach is threefold:
- Raise the overall administrative standards that apply to the relationship;
- Establish consistency across the management of the relationship as a means of reducing the impact of red-tape; and
- Strengthen the foundations to support the mature and capable relationship between the Government and the sector described in the Social Compact.
Uneven current practice means that there will be Recommendations in this paper that some agencies will not consider to be particularly relevant and others that are very relevant. Some Recommendations will be challenging, while others will have already been achieved in some places. Consequently, some Recommendations will be able to be implemented immediately others will require some preparation, while others still will require significant development on a whole of Government basis.
Why undertake reform of procurement contracting and reporting?
The community sector in the ACT, as in much of Australia, is currently passing through a period of considerable change and adjustment. This adjustment is in response to a combination of changing demographics, changing community and individual standards and expectations and also in response to large scale changes in the economic base of Australia.
But these, long term macro pressures are not the only pressures for change. The traditional model of community sector service delivery is also changing and along with it, the traditional relationship between Government and the community sector is under pressure.
Over many years there has been a shift from the delivery of community services by Governments to delivery by community sector organisations. This shift is driven by cost and economic pressures and also by the ability of the community sector to deliver services focussed on the individual and to undertake roles that are difficult, or not possible from within Government.
The ACT is not alone in facing these pressures. All jurisdictions in Australia are exploring ways in which they can relieve the burden on their community sectors and the ACT is no exception. The ACT response, as noted above, includes a sector development program, an example that has been followed by the NSW Department of Communities and also be the Victorian and Tasmanian Government.
Regardless of whether or not other jurisdictions are working to strengthen their sectors, most, if not all, are undertaking red-tape reduction projects that mostly focus on procurement, contracting and reporting arrangements.
Reform concentrated in this area is no surprise, as procurement, contracting and reporting arrangements represent the bulk of the transactions in the relationship between the Government and the community sector. Making fundamental changes to these processes is a complex and difficult task and should only be undertaken where there are clear reasons for reform and benefits for the parties involved.
Nevertheless, despite the clear practical benefits, the greatest strategic benefits from these recommendations will come from the extent to which they support progress in the relationship between the Government and the sector. These recommendations will underpin the changes to service delivery that will flow from the ‘Blueprint’ reforms and support the roles the Government will need to emphasise in the future, including:
- As an initiator of outcomes;
- As the party with the highest point of visibility of the problem;
- The ability to marshal the resources of Government to where they are best applied;
- The ability to harvest information and statistics on behalf of all stakeholders; and
- Control over regulatory frameworks.
These reforms are also intended to provide an improved administrative base that will support the sector in making the most of its areas of advantage and its potential, including:
- The ability to get close to the problem
- Greater freedom to be innovative, and greater flexibility; and
- An increasing share of responsibility for the outcome.
Key Considerations for Reform
The ACT has the oldest Social Compact in Australia and one of the oldest in the world. However, and despite the Compact’s longevity and success, achieving shared outcomes, there is still room for greater maturity and sophistication in the relationship.
The Compact places obligations and undertakings on both parties to the relationship and these obligations and undertakings have been central to the development of the discussion and the recommendations in this report.
The Community Sector Reform Program (Reform Program), with the support of the Community Sector Reform Advisory Group (CSRAG) has made progress towards the following Compact undertakings:
- Recognise the importance of and support the sustainability and long-term resource capacity of the community sector.
- Invest in training and development in the public and community sectors.
- Recognise the skills and the experience of the community sector as a resource to help guide continuous improvement across both sectors in service provision.
Under the Compact, the Government also undertook to: ‘identify a community sector reform agenda that will deliver the best possible outcomes for the Canberra community such as ‘reducing red tape’.
In giving effect to this undertaking, a red-tape reduction forum with very broad representation by the community sector identified in early 2013a number of red-tape related issues that reduced the effectiveness of the relationship. The CSRAG assisted the Reform Program in prioritising these issues around procurement, contracting and reporting.
In considering how to improve the effectiveness of procurement, contracting and reporting, the Working Group, and the CSRAG have been conscious of a number of undertakings in the Compact that are directly relevant to procurement, contracting and reporting:
- Build confidence and trust in community partners/organisations.
- Maintain transparency in communication, information sharing and in decision making processes wherever possible
- Actively involve community members in the planning, design, implementation and evaluation of policy, services and community development activities
- Support and use available research and data to identify and promote good policy and service delivery
- Commit to work towards continuous quality improvement
- Take responsibility in the relationship and be accountable for processes and outcomes.
- Encourage and expand opportunities for joint work on policy review, development and planning.
- Work towards better integration of policies and programs within and across government agencies directed to specific population groups or needs in the community
This report is the culmination of the red-tape reduction forum undertaken earlier this year. The recommendations in this report reflect the concerns raised by the participants in the red-tape reduction forum and have been developed through consultation with both the relevant ACTPS agencies and the CSRAG. The report is intended to inform decisions by the Government around the key red-tape reduction issues that arose in that forum, particularly around community sector procurement, contracting and reporting. The audience for the report includes the Minister for Community Services, the Directors General of the relevant Directorates, members of the CSRAG, and others as necessary.
A Working Group was established by the Minister for Community Services to address procurement, contracting and reform and to make recommendations to the Government on how the effectiveness of these important processes might be improved. The Working Group comprised representatives from the Community Services Directorate, and from the Directorates of Health, Commerce and Works, Chief Minister and Treasury, Justice and Community Safety, and from the ACT Government Solicitor. A contribution from the Education and Training Directorate was obtained separately. The Working Group has been assisted by the CSRAG.
The community sector participants of the red-tape reduction forum will continue to be informed of the actions to reduce the red-tape that affects them and will be involved in the implementation of any recommendations that are agreed.