The government agency responsible for leading whole of government ICT investment and digital service delivery has been criticised over its procurement of ICT related services.

An embarrassing report released by auditor general Grant Hehir last week says the DTA, which is also tasked with promoting the ethical and economical use of public resources, is falling short of ethical requirements, failing to comply with Commonwealth procurement requirements and failing to get value for money.

The audit also found the DTA didn’t  manage contracts effectively and didn’t provide sound advice to decision makers.

The DTA spent a total of $122.8 million on goods and services between 2019/20 and 2020/21, with the audit examining nine of those procurements worth a total of $54.5 million.

The selected procurements ranged in value from $127,334 to $28.1 million and included the COVIDsafe app ($7.5 million) and enhancements to the myGov portal ($28 million).

“The DTA’s procurement of ICT-related services has been ineffective for the nine ICT-related procurements examined by the ANAO. However, the DTA has not been following its internal policies and procedures, and there are weaknesses in its governance, oversight and probity arrangements for procurements,” Mr Hehir said.

“For the nine ICT-related procurements examined by the ANAO, the DTA did not conduct the procurements effectively and its approach fell short of ethical requirements. None of these procurements fully complied with the CPRs.

“The DTA did not conduct approach to market or tender evaluation processes effectively, and it did not consistently provide sound advice to decision-makers.”

Mr Hehir also said  the DTA’s frequent direct sourcing of suppliers using panel arrangements didn’t support getting value for money as required by CPRs, and that four out of five of the DTA’s highest value procurements involved an approach to only one supplier.

Duplicate payments and cost blowouts

The audit revealed that only one supplier was approached for the COVIDSafe App Development that the DTA paid the developer twice on two separate occasions.

One invoice for $275,000 was paid on 8 October 2020, and then again on October 20. Another invoice for $105,600, was also paid twice.

The audit also found a blowout in the myGov Funding Case Support procurement, with the contract varied ten times over two years and increasing to 40 times its original value from $121,000 to $4,942,080.

The report makes several recommendations including that the DTA implements a system of risk management to ensure procurement risks are being monitored, managed and escalated appropriately.

In a letter to Mr Hehir the DTA said it agreed with the ANAO’s recommendation for increased transparency over its internal procurement framework to ensure contracts are managed effectively and value for money is achieved.

However, it nonetheless defended its procurement, saying “while the audit report identifies shortfalls in relation to internal procurement processes, controls and education, each of the sampled procurements still achieved their intended outcomes and supported critical delivery requirements in an unprecedented pandemic environment.”