Queensland raises the stakes on ethical procurement

The Queensland Procurement Policy (QPP) was recently amended to introduce the Ethical Supplier Threshold and the Ethical Supplier Mandate.

The Threshold and the Mandate are targeted towards ensuring that Queensland Government suppliers comply with laws relating to the payment of employee entitlements and the use of independent contractors, unpaid interns and labour hire arrangements.

Queensland Government agencies should:

• Become familiar with your new obligations under the Threshold and Mandate.
• Ensure that all suppliers are conforming.
• Review and update all procurement documents and contracts to ensure that they comply.
• If notified of a potential breach, consult the Mandate as you may have obligations to investigate and/or report the breach.

Suppliers to Queensland Government agencies should:

• Become familiar with your new obligations under the Threshold and Mandate.
• Ensure that you comply with your obligations when submitting tender responses and contracting with the Queensland Government.

The Threshold

The Threshold applies from 1 August 2019 to all budget sector agencies, statutory bodies, government owned corporations and special purpose vehicles in relation to all types of procurement of goods and services.

Procuring agencies must now ensure that all suppliers meet the Threshold criteria when evaluating tenders and before entering into contracts. New obligations under the Threshold include:

• Invitation to tender documents must require compliance with the Threshold, and require that tender responses contain a statement that the supplier has complied with all Threshold requirements in the past five years (commencing 1 August 2019);
• Tender documents should give evaluation panels the right to contact regulatory bodies to verify the compliance of suppliers;
• If a supplier is identified as not having satisfied the Threshold criteria, the agency must treat their offer as non-conforming;
• All contracts must contain an obligation that suppliers comply with the Threshold during the contract term, and a right for the agency to issue a Show Cause Notice if it reasonably suspects non-compliance; and
• Agencies must report suspected non-compliance to the QPP Compliance Unit.

The Mandate

The Mandate establishes a scheme under which suppliers can accrue demerit points by failing to comply with policy requirements. It currently applies only to budget sector agencies and commences:

• On 1 August 2019 for building and construction suppliers;
• On 1 October 2019 for transport infrastructure and services suppliers; and
• At a date to be determined for all other entities and categories of supplier.

Procuring agencies must not contract with suppliers that have accrued 20 or more demerit points in the past 12 months. New obligations under the Mandate include:

• Before contracting, procuring agencies must check an online database managed by the Executive Officer, Procurement Penalties and Sanctions Committee (The Committee) to confirm whether the supplier is the subject of a sanction;
• Agencies must not engage suppliers suspended for accruing demerit points; and
• If a procuring agency receives information about a potential breach, it must commence a process that may involve investigating the breach and/or reporting the breach to the Committee or a law enforcement agency or regulator.