Value for Money When Procuring Off a Panel

The ANAO’s view:

When procuring from panels the Commonwealth Procurement Rules or CPRs remove the requirement for procurements over the relevant threshold to be offered to the wider market.

This occurs whether or not the panel arrangement provides buyers with sufficient information to be an effective substitute for going to the wider market.

The ability to achieve value for money for individual procurements from a panel is therefore impacted by the robustness of the processes used to assess suppliers when establishing the panel.

For example, where a panel includes suppliers with low technical ability or high risk, or buyers cannot use price to help select the suppliers to approach, it is difficult to obtain a high degree of assurance that value for money has been appropriately assessed and achieved.

It is also difficult to obtain such assurance when entities only approach one or a small number of suppliers. Procurements from panels and similar arrangements are often perceived as requiring less time and effort to conduct, particularly when the cost and time involved in running an open approach to market is considered, or when engaging a new supplier.

When using panels and similar arrangements, entities need to adopt processes that are not just technically compliant with the CPRs but are also consistent with their intent, which is to drive value for money through competition.