'Specialist Procurement Adviser' Hughes Case
THE ASSIGNMENT - Specialist Procurement Adviser
PSI Asia Pacific (PSI) provided expert procurement and evaluation advice to the complainant in the benchmark tendering Federal Court case - Hughes Aircraft Systems International v Air Services Australia (Hughes) - acquisition of an Air Traffic Control System:
- The tender process was assessed to determine the intention of the evaluation methodology, in the light of the expenditure of public funds.
- The decisions taken by Air Services Australia (CAA) were reviewed for compliance, consistency and fairness.
- Expert analysis was provided to the Federal Court in support of the claim of unfairness in the conduct of the procurement.
- A forensic audit was conducted of selected procurement materials to define and provide an opinion on the decision-trial and the defensibility of decisions.
OUR SOLUTION AND THE OUTCOME
- Specialist PSI advisers reviewed the evaluation methodology of the procurement, and the intention of the supporting documentation.
- A report was provided to the complainant, the findings of which contributed to the evidence provided to the Federal Court.
- Actions in the tender process by Air Services Australia were considered to create a preliminary and binding contract.
- Certain unwritten terms were implied in the contract, in that CAA had an obligation to deal fairly with all tenderers, and to conduct the tender evaluation fairly.
- CAA breached the contract in Hughes in that it failed to evaluate the tenders in accordance with the evaluation criteria it had set out in its documentation; and breached confidentiality provision.
- As a result of CAA's conduct, Hughes claimed to have suffered loss and damage set out in the RFT. www.ags.gov.au/publications/agspubs/legalpubs/legalbriefings/br33.htm
LEGACY VALUE OF PSI
- Complicated tenders require consideration of the establishment of contractual obligations.
- Tenderers must be treated fairly from the outset of the procurement process. Procurers must adhere to proper procedures, conduct evaluations in accordance with the evaluation criteria, and conduct tender-type process with care and thoroughness.
- Even when there is no written contract, formal notice of acceptance, nor award of the tender, a preliminary contract can be created if certain representations regarding the award of a tender have been made to the tenderer, or the tenderer has been encouraged to partly perform the contract in anticipation of its award.
- Court found that during the tender process, the CAA had contravened section 52 (s.52) of the Trade Practices Act 1974, by engaging in conduct that was misleading and deceptive.
- The Commonwealth developed guidelines for its Departments and agencies for the conduct of procurements involving public funds, addressing representations, conduct, disclosure, and debriefing. www.finance.gov.au/publications/fmg-series/procurement-guidelines/index.html.