Procurement debate

In the lead up to the Labor conference, the right-wing are attacking the unions’
sensible procurement policy. Here is the ACTU 2009 policy.
‘Government Procurement Policy Australian Jobs, Industry and Decent Industrial
Relations
Preamble
1. The federal and state governments’ expend billions of dollars every year on
the acquisition of goods and services. At a time of increasing job insecurity
and rising unemployment due to the Global Financial Crisis, governments’
need to be especially mindful of, and committed to, the need to ensure
that their expenditure of taxpayers money encourages the creation and
retention of jobs within Australia. Furthermore, the context for this is that
it should always occur within the terms of the nation’s international
obligations and that workers are paid fairly and employed under decent
terms and conditions.

2. The following is proposed for adoption by the Federal Government in
particular, and state branches and affiliated unions are encouraged to
pursue similar initiatives with their respective state and local governments.
3. Australian Government Procurement Policy should apply to:

a) the purchase of goods and services by the Australian Government
including all budget agencies, statutory authorities and government
owned corporations;

b) organisations contracted to the Australian Government to provide goods
and/or services;

c) funding agreements between the Commonwealth and State or Local
Governments, Community organisations and NGO’s and any other
organisation in receipt of Commonwealth monies.

4. The Australian Government’s procurement policy should have as its
objectives the retention and creation of jobs and the development and
support of local industry in Australia requiring that contractors supplying
goods and services to government adhere to ethical employment practices.

Industrial Relations

5. All contractors who perform government work and all those to whom this
policy applies (including sub-contractors in the supply chain) must adhere
to all industrial relations and employment related laws including, but not
limited to:
a) compliance with awards and industrial agreements,
b) primacy of collective bargaining,
c) annual leave,
d) long service leave entitlements,
e) occupational health and safety, workers’ compensation,
f) superannuation,
g) legal age of employment,
h) discrimination, and
i) taxation laws.

6. Contractors who perform government work should be contractually
responsible for their subcontractors’ adherence to this policy. Contractors
will be liable for the remedies below should their subcontractors breach
this policy. Where a government contractor or tenderer provides or seeks
to provide goods to government that could be made by an outworker, it
must comply with the additional obligations outlined in Attachment A.

7. In addition to compliance with legislative provisions relating to Freedom of
Association, all successful tenderers must comply with the principles of
Freedom of Association. This means they shall not provide barriers to
employees joining and being active members of a union.
This should include:

a) allowing employees to participate in negotiations with employers and
representative bodies of employees to develop enterprise agreements;

b) no victimisation of any kind for persons who choose to be members of
a union;

c) codification and effective implementation of the rights of union
representatives where the employees concerned choose to have such
representatives;

d) recognise the role of union delegates and unions generally in
representing workers;

e) observance of the applicable right of entry provisions by authorised
union officers and health and safety representatives for legitimate
purposes including the recruitment of members, dealing with member
grievances and investigating any suspected breach of industrial
awards, agreements or legislation; and access to an inspection of the
relevant employer records by a union;

f) a half hour paid industrial rights induction with a representative of
the relevant union;

g) the right of elected union workplace representatives to represent
members

8. The process for tendering must be transparent. Prior to a decision on a
successful tenderer, the government will publish a full list of tenderers
with both unions and employer organisations having the right to supply
information to the government agency about any potential contractor
(including any potential sub-contractor in the supply chain) that it believes
has a history of acting contrary to law or behaving in a manner which does
not comply with the principles of Freedom of Association.

9. The letting of government contracts will be transparent with strict
limitations on the use of commercial in confidence exclusions. All
government agencies will maintain a register of commercial-in-confidence
exclusions, to be periodically tabled in parliament and subject to scrutiny.

10. The government will require agencies to disclose details of any sub-
contract arrangements including the identity and location of sub-
contractors.

11. All government contracts should set minimum wages and conditions
standards in all contracts until such time as the Fair Work Australia laws
are fully implemented. This should be done by way of a no disadvantage
test against the relevant award and/or contract determination and/or
industrial agreement that would have applied had it not been for
WorkChoices. As an overarching principle, it should be clear to any
potential tenderer that contracts will not be awarded on the basis that a
competitive price is arrived at by undercutting the wages, conditions and
rights of employees. At all times, the tenderer should have cognisance of
any prevailing terms and conditions applicable to employees on collective
agreements within the given industry.
 
12. Employers who are party to a collective workplace agreement with a
registered trade union shall automatically be deemed to comply with
clause 11 above.

13. Where it is alleged a contractor has breached any of its industrial relations
obligations including issues of Freedom of Association, as an initial step the
government will consult with stakeholders (including the relevant union)
about the best means to ensure compliance. If the matter remains
unresolved, the matter shall be referred to Fair Work Australia for
resolution and/or determination. This shall be a requirement of the
contract.

14. Notwithstanding the above, where a breach has occurred the Government
Agency must be able under its contract to apply remedies which include:
a) ordering rectification of the breach;
b) formal warnings;
c) partial exclusion from tendering, i.e. a reduction in the number of
tendering opportunities;
d) preclusion from tendering for any work for a specified period;
e) contract cancellation;
f) financial penalties;
g) reporting of the breach to relevant regulatory and enforcement
authorities;
h) A combination of any or all of the above.
 
15. The Federal Government will publish a full list of successful tenderers,
including:

a) the name of the company or individual who holds the contract and all
sub-contractors they will use in the supply chain along with their
business addresses;

b) the location and duration for performance of the contract;

c) whether outworkers could be used to produce the goods under the
contract and if so whom and at what location; and

d) tenderers’ answers to industrial relations and OHS questions referred
to above.

16. Consistent with ACTU Industrial Relations Legislation Policy, the collective
bargaining provisions should allow parties to bargain and agree on any
matter they choose, including on use by the employer of Australian made
products and services.

Australian Industry Participation

17. The Government should be committed to maximising retention and
creation of jobs in Australia and should seek to utilise its procurement
practices to that end. Therefore, while having regard to whole of life value
for money considerations and Australia’s international trade agreement
obligations, departments and agencies will also assess tenders on the basis
of full and fair Australian industry participation opportunities retained or
created in Australia – including through effective utilisation of the
Australian Industry Capability Network.

18. Government departments and agencies will be required to purchase from
Australian and New Zealand suppliers who are price and quality
competitive and who comply with the terms of this policy. The policy will
provide a price preference advantage for Australian suppliers of 20 per
cent with an additional five per cent for those companies based and
operating in regional Australia. Consistent with this formula, and where all
other things are equal, favourable consideration will be given to the
tenderer who maximises Australian employment.

19. Government should avoid a ‘whole of contract’ procurement approach in
purchasing manufactured goods that preferences companies that can
provide all the goods required at the expense of excluding small to medium
local suppliers from participation in the tendering process. In line with
government policy to award a greater share of government procurement
contracts to small businesses, contracts to small and medium local
suppliers for goods and services will, where applicable, be maximised. This
should apply also to the use of “Common Contracts Purchasing” where only
one company is awarded a contract to supply all of a particular good or
service to governments e.g. stationery supplies, IT, motor vehicles etc. The
use of a variety of suppliers will not only provide for ongoing competition
but will also ensure that smaller, local businesses are supported. Contracts
should only be awarded totally offshore in circumstances where it is
evidenced that the goods or cannot be sourced locally (as described in item
9 above). Where components of the goods are thus available locally,
preference will be given to those contractors who include the use of such
local providers.

20. In the event of contracts being awarded offshore, successful tenderers
should be required to demonstrate compliance with the relevant
employment standards contained within the UN human rights instruments,
the ILO Conventions and where applicable the OECD Principles for Multi-
National Enterprises. Opportunities will be afforded to stakeholders to
verify such compliance via the consultative mechanisms referred to in item
14 below.

21. Contracts which aggregate to in excess of $50million per annum are of
national significance. Where such contracts are for services or goods and
material provided predominantly from offshore, successful tenderers must
comply with the additional obligations to those outlined in clause 11 above.
Tenders should be required to summit a local content plan that has been
assessed by the Industry Capability Network (ICN) prior to the contract
being awarded. Wherever practicable, successful tenderers must be
required to enter into contractual arrangements that maximise
opportunities for Australian industry participation. Where it has been
determined that a reasonable opportunity exists for the local provision of
such services and material, those contractual arrangements would include;

a) Local skill development including investment in training for higher
level broad based qualifications and retraining of existing workers,

b) effective labour market planning and forecasting,

c) the use of skilled migration only where a genuine skills shortage has
been demonstrated to exist.

22. In assessing tenders for services contracts that have a high labour content,
the government should take particular care to ensure that sufficient
staffing is proposed to allow the service to be delivered. Any such contract
should not be awarded to the exclusion of a Public Sector agency that may
be able to deliver the service.

23. The federal government should adopt a single consistent definition of the
term ‘employee’ to be used across the public sector in workplace relations
and procurement. The government should also require public sector
agencies to report all details of contracts with a high labour content.

Trainees and apprenticeships

24. Government contracts should require contractors to provide
apprenticeship/traineeship positions. The Government in consultation with
unions should set required levels for each industry.

Aboriginal and Torres Strait Islander Employment – Closing the Gap

25. The Government will reinforce their commitment to “closing the gap” by
initiating a strategy which includes Aboriginal and Torres Strait Islander
business, employment or outcome targets in all government procurement
and purchasing. This is consistent with current procurement guidelines at
the commonwealth and some state government levels and should be spread
through COAG for a consistent national approach. Congress calls on unions,
governments, industry bodies and employers to develop and implement a
targeted, quantitative scheme which addresses high unemployment and
low levels of certified training in all areas with a high density of Aboriginal
and Torres Strait Islander peoples.

Consultation

26. The Government should use existing tripartite consultative mechanisms,
and create new ones as appropriate, to enable stakeholders to regularly
monitor the effective implementation and compliance with this policy and
to suggest modifications where necessary.

ATTACHMENT A – OUTWORKERS

1. In addition to compliance with the instruments and legislation set out in
clause 1 of the Procurement Policy, all government contractors (including
sub-contractors in the supply chain) who give work out and/or engage
outworkers in the textile, clothing and footwear industry must be
accredited with the Homeworkers Code of Practice and must comply with
any relevant Federal and State legislation, awards, industrial instruments
and codes of practice relating to the performance of work by outworkers.

2. Tenderers (including any sub-contractor in the supply chain) who tender to
provide goods to government that could be made by an outworker must
provide evidence of compliance with applicable awards and legal
obligations relating to the giving out of work and the engagement of
outworkers when they lodge a tender. The evidence must be provided in a
statutory declaration and must include but is not limited to:

a) the name of the relevant award or workplace agreement (howsoever
described) or other relevant employment law

b) registration number of factory or workshop, where applicable

c) registration number as an employer giving out work, where applicable

d) whether outworkers have previously been engaged

e) evidence of compliance, in the twelve months prior to the tender
being lodged, with the applicable award or other relevant
employment law requirements relating to the lodgement of periodic
work lists of employers and other parties to whom work has been
given, where applicable

f) evidence of workers compensation insurance such as a renewal notice

g) evidence of current superannuation fund membership and
contributions

h) location of time book, sheet or records required to be maintained
under the applicable award and industrial legislation or other relevant
employment law

3. Unless the statutory declaration and information is provided, a tender will
not be considered.

4. Where a tenderer tenders to provide goods to government that could be
made by an outworker the government will notify the Textile Clothing and
Footwear Union of Australia (‘TCFUA’) and will consult with the TCFUA
about the compliance of the tenderer with industrial instruments outlined
in clause 1 of the Procurement Policy and clause 1 of Appendix A of the
Procurement Policy. If such a tenderer is successful in its bid to supply
goods to the government, the government will notify the TCFUA.

ACTU