Written by: Brett Lyndon – Pro Leaders Academy Pty Ltd

The Australian Government’s new Judicial Review legislation is now an active legislative component that all government procurement professionals must adhere to, but what is the judicial review system, what does it mean, and how will it impact on your procurement activities?

Simplified Outline of this Act

  1. The Federal Court or the Federal Circuit Court may grant an injunction in relation to a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement).
  2. The Federal Court or the Federal Circuit Court may order the payment of compensation for a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement).
  3. A supplier may complain to the accountable authority of a relevant Commonwealth entity about a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement).
  4. If a supplier makes a complaint, the accountable authority must:
    • investigate the conduct the subject of the complaint; and
    • if no public interest certificate is in force in relation to the procurement—suspend the procurement.
  5. A contravention of the Commonwealth Procurement Rules does not affect the validity of a contract.
    • The Federal Court or the Federal Circuit Court may grant an injunction in relation to a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement).
    • The Federal Court or the Federal Circuit Court may order the payment of compensation for a contravention of the relevant Commonwealth Procurement Rules (so far as those rules relate to a covered procurement).

 

Let’s break that down and examine this in more detail.

Point 3 suggests that if a vendor has a complaint regarding the procurement process conducted by a government entity, specifically a breach of the Commonwealth Procurement Rules (CPRs), the vendor must initially make a complaint to the entity’s Accountable Authority who must immediately suspend the procurement activity and conduct an investigation into the complaint.  For the purposes of this legislation, the complaint must be with regards to a government procurement activity that is covered by the Commonwealth Procurement Rules and the conduct of the entity or an official while conducting that activity. It can be something the entity or official either did or did not do or proposed to do or not do that breaches or would be a breach of the CPRs.

Point 4 suggests that the procurement activity may only be continued during the investigation if the Accountable Authority issues a Public Interest Certificate. The Public Interest Certificate is a written certificates that is issued by the Accountable Authority that states “it is not in the public interest for a specified procurement to be suspended while applications for injunctions are being considered or investigated“.  If, after reasonable attempts have been made to resolve the issue with the entity, the vendor is still unhappy, they may apply to the Federal Court or Federal Circuit Court for an injunction and determination of the validity of the process. The application to the courts must be made within 10 days of the unsatisfactory outcome.  Where the Court finds that there is or has been an error of conduct or process by the Government entity, it has the power to grant either a Restraining Injunction to prevent the entity from conducting such activities/actions or a Performance Injunction requiring the entity or official to conduct such action, in accordance with Point 1.

The Courts may also award the alternative remedy of compensation in accordance with Point 2. Compensation will be limited to the reasonable costs incurred by the complainant in the tendering process plus reasonable legal costs and reasonable costs in trying to resolve the complaint.  This compensation is intended to ensure the supplier has not suffered undue costs as a result of an entities breach of the CPRs, and it is not intended to be an opportunity for suppliers to receive a financial gain at Commonwealth expense.

Point 5 suggests that the procurement activity must remain suspended until either the court has made a determination for or against the process, or the investigation has been completed.  Any action or lack of action that has occurred through the procurement process that falls under the jurisdiction of this legislation, does not affect any signed contract (regardless of whether the contract was formed before or after the commencement of this legislation).

In summary, this legislation is intended to ensure that all government procurement activities comply with the Commonwealth Procurement Rules. If you and the agency you work for follow and abide by the CPRs, you should have no fear of this new legislation.

The legislation can be found in the Federal Register of Legislation under the Government Procurement (Judicial Review) Act 2018

NOTE: The content of this article is intended to provide a general guide to the subject matter, and specialist advice should be sought about your specific circumstances. The content must not be relied upon as legal, technical, financial or other professional advice.