Desperate Need of Reform DSS Tendering - CCA

There is a dog’s breakfast of approaches to human service contracting across Federal Government agencies and a desperate need for reform of Department of Social Services tendering practices, according to a submission being finalised by Not for Profit sector peak body, Community Council for Australia.

The CCA submission said one of the major problems with the tendering process was the Department’s lack of communication with Not for Profit service providers.

“It seems each agency has its own rationale and its own set of mandatory components and priority principles for its particular procurement practices and reporting requirements.  Even within some agencies, there are high levels of inconsistency in approaches and processes,” the submission said.

The CCA submission is to the Senate Community Affairs References Committee Inquiry into the recent DSS tendering processes set up by the Greens in February.

The move came as community organisations including peak bodies and advocacy groups received pre-Christmas notice from the Federal Government that they have been defunded, their funding hadn’t been renewed or their applications weren’t successful. Many NFPs have since had their funding continued until mid 2015.

“In some ways, the DSS tendering processes were an attempt improve (its) processes by lengthening the terms of contracts and reducing the number of separate contracts or agreements individual Not for Profit organisations may have to apply for or complete,” the submission said.

“Unfortunately, the way this task was approached negated the positive intentions of the changes in tendering.  A key reason for this failure is that the recommendations of the Productivity Commission around consultation were ignored.  There was little or no engagement with service providers or the communities they serve. Without real engagement, Government tendering processes are headed to inadequacy.”

CCA said the DSS tendering processes is a good indication of how well intentioned Government officials engage in practices that result in dysfunctional program management.  

“The uncertainty created through ongoing extensions, lack of transparency, lack of rationale, short term notice periods, lack of community engagement, lack of service provider engagement, lack of appropriate risk management or performance management within Government all compound what is a very difficult role for Not for Profit organisations seeking to work collaboratively with Government to achieve shared goals,” the submission said.

“The reality is that despite many attempts to improve these processes over the years, there are some Government agencies where the culture and practice of contracting with Not for Profit organisations is counter-productive to the achievement of Government policy.  

“What is most disappointing is recognising that the failures of the DSS processes will be repeated many times over.

“It seems that within Government, concepts such as performance management, performance reporting, and risk management have been deconstructed and reassembled in forms that disguise their original purpose.

“CCA strongly supports the need for reform, particularly with the ongoing engagement between Not for Profit organisations and Federal Government agencies.  The level of counter-productive compliance activity and lack of performance based management is having a very negative impact on NFP organisations, Governments and the broader community.

“A more productive tendering process between Governments and NFPs will result in stronger and more resilient communities across Australia.”

The CCA submission makes 10 recommendations to the Senate inquiry:

1.       Australian Governments should urgently review and streamline their tendering, contracting, reporting and acquittal requirements in the provision of services to reduce compliance costs.  This should seek to ensure that the compliance burden associated with these requirements is proportionate to the funding provided and risk involved.  Further, to reduce the current need to verify the provider’s corporate or financial health on multiple occasions, even within the same agency, reviews should include consideration of:

• development of Master Agreements that are fit-for-purpose, at least at a whole-of-agency level
• use of pre-qualifying panels of service providers.

2.       The Department of Finance and Deregulation should develop a common set of core principles to underpin all government service agreements and contracts in the human services area. This should be done in consultation with relevant government departments and agencies and service providers.

3.       All Government tendering processes should actively involve those being contracted to provide services and those who will benefit from the services in the design and implementation of programs.

4.       All Government tendering processes should have a publicly stated policy goal, and a measurable indicator of success.

5.       Funding decisions need to be supported by a clear and transparent account of the criteria used to assess applicants, the process by which these criteria were applied, the information used to inform decision making, and the rationale for final decisions.

6.       Expertise in the area of service provision being contracted should be included in all decision-making panels.

7.       When entering into service agreements and contracts for the delivery of services, government agencies should develop an explicit risk management framework in consultation with providers through the use of appropriately trained staff.  This should include:

• allocating risk to the party best able to bear the risk,
• establishing agreed protocols for managing risk over the life of the contract.

8.       All Government contracts seeking to achieve a social purpose should have at least a 5 per cent allocation to support the collection and reporting of appropriate performance measures.

9.       Contracts with Not for Profits to provide community services should be for at least three years and no program should lose funding with less than six months’ notice.

10.     Establish a closed independent feedback loop to enable NFPs a confidential solutions focused avenue in provision of feedback on government relationships with the sector.

On 2 March 2015 the Senate granted an extension of time for reporting by the Committee  until 12 May 2015. The terms of reference for the Inquiry can be found HERE.