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Government Procurement (Judicial Review) Act

IN BRIEF

The Government Procurement (Judicial Review) Act 2017 (Cth) (the Act) which will come into operation on 20 April 2019, establishing an independent complaints mechanism for Commonwealth procurement.

The Act reflects the Commonwealth Government’s moving towards meeting Australia’s obligations on government procurement under the Trans-Pacific Partnership Agreement.

The Act provides suppliers with the right to seek judicial review of contraventions of the Commonwealth Procurement Rules (CPRs) by a Commonwealth procuring entity.

Where a contravention of the CPRs is found, the Federal Circuit Court or the Federal Court of Australia (the Courts) may grant injunctions and order payment of compensation. Before a supplier may bring a complaint before the Courts, the supplier is required to complain to the procuring entity about the contravention and take reasonable steps to resolve its complaint.

It is important to note that:

  • the Courts are not able to overturn the awarded contract where it is found that the CPRs have been contravened.

  • the provisions relating to complaints, injunctions and compensation do not apply to a contravention of the CPRs that occurred before 20 April 2019.

THE COMPLAINT PROCESS

If a supplier believes that a procuring entity has engaged in conduct that contravenes the CPRs, and that such conduct affects the supplier’s interests then the supplier can make a written complaint to the procuring entity, who must investigate and prepare a report.

Starting from the day of making the complaint, the supplier has ten days to institute an injunction.  In this ten day window, there is an opportunity for the procuring entity and the supplier to meet and resolve their differences.  If the supplier does not issue the injunction within the 10 day window then they lose their right to do so.

If the procuring entity issues a ‘public interest certificate’ then the supplier is unable to secure an injunction.

A public interest certificate is a written certificate declaring that delay of the procurement is not in the public interest.  The decision of the procuring entity to issue a certificate is subject to judicial review.

INJUNCTIONS AND COMPENSATION

Under the Act, the Courts have the ability to grant an injunction as a means of ensuring that a procuring entity complies with the CPRs, and to preserve the supplier’s opportunity to participate in a current procurement.

Specifically, the Court may grant:

  • a restraining injunction to prevent conduct by a procuring entity that contravenes the relevant CPRs; or

  • a performance injunction to require a procuring entity to do an act or thing when it proposes to, refuses or fails to, act in compliance with the relevant CRPs.

If a procuring entity has breached the CPRs, the Courts have the power to order compensation. The Act limits the amount of compensation to the supplier’s reasonable expenditure associated with the tender process, in preparing and attempting to resolve such a complaint.

THE FUTURE

The Act does not have an impact on Victorian Government procurements. However, the above-mentioned international obligations also apply to Victoria.   In the near future, we may see similar legislative changes applicable to Victorian Government procurement.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Sam Funnell

Partner, Melbourne

Ph: +61 9642 2252

Sam.funnell@fal-lawyers.com.au