Covered procurements
The GPJR Act only applies to ‘covered procurements’, being those procurements subject to both Division 1 and Division 2 of the CPRs, and which are undertaken by non-corporate Commonwealth entities and designated corporate Commonwealth entities (prescribed in the Public Governance, Performance and Accountability Rule 2014 (Cth)).
Where a procurement is exempt from Division 2, it is not a covered procurement and is not subject to the GPJR Act. Division 2 does not apply where the procurement:
Relevant CPRs
A challenge can be raised on the basis of a breach, or proposed breach, of ‘relevant CPRs’.
Naturally, the best course of action is to comply with all applicable CPRs and ensure you are conducting a robust procurement process (for example, ensuring procurement plans and protocols and record keeping systems are in place and seeking probity and legal advice as necessary).
However, you should be particularly mindful of the following rules which the GPJR Act defines as ‘relevant CPRs’:
Public interest certificates
Where your procurement process is subject to the GPJR Act, impacts of a challenge can be mitigated through a PIC.
You should consider if a PIC should be issued during the planning phase of your procurement, as opposed to waiting for the event where a challenge is raised. However, you should be aware that the decision to issue a PIC may itself be subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or the Judiciary Act 1903 (Cth), so the decision should be defensible.
Each agency may have its own internal process for issuing a PIC. Further, the Department of Finance has released guidance on issuing PICs (see Appendix 1 to RMG 422).
Once issued, a public interest certificate should be published on the relevant agency’s website.
Consequences of claim
In the event of a breach, or potential breach, of the CPRs during the course of a ‘covered procurement’, there are two avenues for redress under the GPJR Act, being injunctions and compensation.
Injunctions and suspension:
Injunctions under the GPJR Act can compel an agency to cease activity that breaches the CPRs. Alternatively it can require the agency to positively do something in order to comply with the CPRs. For an injunction to be granted, the supplier must first lodge a complaint with the relevant agency and make reasonable attempts to reach a resolution. The agency is required to investigate the complaint during this process. This complaint process will suspend the procurement until a resolution is reached (or any subsequent legal claim is resolved).
However, where a suspension could result in real adverse consequences to the public interest, a public interest certificate can be issued by the accountable authority or delegate. This will prevent the freezing of the procurement process, although it will not prevent a Court from granting an injunction or awarding compensation.
An injunction must be applied for within 10 days of the alleged contravention of the CPRs, or the day which the supplier became aware, or ought reasonably to have become aware of the contravention. However, extensions can be granted where reasonable attempts have been made to resolve the complaint, or where there are special circumstances warranting an extension.
Compensation:
Compensation can be sought where a supplier’s interests are adversely affected by a contravention, or proposed contravention of the CPRs. In the event that a breach of the CPRs is found, the Court can order payment of compensation for reasonable expenditure associated with the tender process and/or in making and attempting to resolve a complaint. In contrast to the injunction process, a complaint does not first have to be made to the Commonwealth entity in order seek compensation, nor do limitation periods apply.
If you have any questions, or would like to know how the GPJR Act might impact your procurement, please feel free to contact us.
Authors:
Rory Alexander, Director + Principal
Derek Smith, Senior Associate
