Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Hansard source

I thank Senator Kakoschke-Moore for her question. The senator has noted a particular increase in the proportion of procurements let by Defence using limited tenders since 2015-16. I acknowledge, Senator, the provision of some information in relation to the question to enable me to provide an answer. Thank you for that. I would note that it appears that the figures that you have quoted prior to 2015-16 don't include the procurements of the former Defence Materiel Organisation. So, in fact, it's not, as you have described, a 'skyrocketing increase'. It is, in fact, adding back in the Defence Materiel Organisation.

As you would be aware, DMO was absorbed back into Defence as part of the reforms that the government introduced following the first principles review. Given the exemption of procurements for acquisition and sustainment of Defence materiel from the operation of parts of the Commonwealth Procurement Rules, it makes total sense that there would be therefore an increase in Defence's use of limited tenders. That exemption exists because of the unique nature of Defence procurements. Often, there are only a couple suppliers—perhaps a single supplier—who can provide the materiel required. We do try and limit when we use limited tenders but, clearly, the work of CASG, formally the DMO, often requires that.

More broadly, as you would also be aware, the CPRs also allow agencies to utilise limited tender arrangements in a number of limited circumstances, such as when they are seeking to utilise Indigenous-owned business—small-to-medium enterprises—under the Commonwealth's Indigenous Procurement Policy. Defence is actually the best-performing agency in the Commonwealth in relation to the number of contracts we have let to Indigenous enterprises. Defence complies fully with the requirements of the Commonwealth Procurement Rules, including in our use of limited tender arrangements.