Outsourcing (in limited circumstances)

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This is part of the APS Strategic Commissioning Framework resources toolkit.

The Strategic Commissioning Framework is a principles-based APS policy document that supports agencies to prioritise APS employment, strengthen APS capability and reduce reliance on consultants, contractors and labour hire. The framework limits outsourcing of core work.

Use of labour hire, contractors and consultants is only appropriate for core work in limited circumstances as outlined in principle 4 of the framework.

It is important that agencies engage genuinely with the intent of the framework, rebalancing their workforce over time while delivering on their priorities. If you must outsource, consider options to work with not-for profits, academia, small business, the Aboriginal and Torres Strait Islander business sector and peak bodies.

If agencies must outsource core work (see circumstances below) they need to:

  • maintain records of the procurement and the reason for outsourcing. (See Targets, monitoring and accountability in the resources toolkit)
  • avoid or manage conflicts of interest
  • ensure active oversight of privacy, confidentiality and integrity
  • ensure outsourcing does not create or perpetuate APS capability gaps
  • build in mechanisms to transfer knowledge and skills to the APS
  • explicitly state the behaviours and conduct required of external personnel.

Out-sourcing in limited circumstances

For core work, use of contractors/labour hire is only appropriate if at least one of the following is true:

  • APS recruitment processes have been unsuccessful or are unlikely to be successful (e.g. due to a competitive labour market and skills shortages). This may apply, for instance, if a current or recent recruitment round has not attracted suitable candidates for a similar vacancy.
  • There are genuine periods of high demand for staffing beyond what should be reasonably expected of an agency that are also unlikely to reoccur in future. APS employees should still be the first resort in this circumstance.
  • There is a temporary need to backfill a vacancy to meet critical business needs, pending a recruitment process or while APS capability uplift is underway.

For core work, use of consultants is only appropriate if at least one of the following is true:

  • There is a need for independent research or assessment (for example, due to requirements in legislation or an assurance need) and it cannot be sourced from within the APS. This should be used on a one-off or limited basis
  • There is a temporary need for specialised or professional skills, at a level that would be inefficient to retain internally. That is, there is not an enduring demand for the skill
  • There is a genuinely urgent and/or unforeseen need for a skill or capability in an area that is an enduring function, and extra support is needed while capability building or recruitment processes are underway.

Agency-level workforce planning is crucial, particularly in circumstances where applying the framework may be more challenging. Two examples are below.

In-demand skills

When the work is core but the skills required are in-demand in the broader labour market, it can be more challenging to attract and retain APS employees. Agencies can resort to short term use of external labour as outlined on page 6 and 7 of the framework, but must take steps to improve recruitment outcomes and build the capability in-house over time. This can include:

  • recruiting from a broader range of locations
  • being clearer about the aspects of your employee value proposition that appeal to the talent you are targeting
  • reskilling existing employees, including short term work where the skills can be acquired quickly, or longer term capability development (eg tertiary level training)
  • bring in temporary expertise from across the APS through mobility arrangements with a view to knowledge transfer
  • using entry level programs to grow your talent pipeline.

Time-limited measures

Time-limited projects or programs are in the framework’s scope if the work is identified as core. Agencies must make considered choices about their workforce to ensure employees can be redeployed when the measure ends. Agency-level workforce planning is key. This can include:

  • using workforce demand management tools to anticipate and manage peaks and troughs
  • supporting mobility within the agency or portfolio. This may be most feasible at scale for generalist skills such as policy, program, grants and administration
  • using non-ongoing employment.

Procuring contractors, labour hire or consultants

Procurement activities are undertaken by a range of APS employees with differing levels of expertise. There is a wealth of information about Commonwealth arrangements in place when procuring goods or services.

When procuring a contractor or labour hire worker, these are the go-to resources

When procuring a consultant, these are the go-to resources.

When procuring digital services, these are the go-to resources

Managing contracts

Maximise the benefits of any external arrangements, through good contract and supplier management.

Contracts must be managed in a way that achieves value for money and complies with the Commonwealth Procurement Rules. The following resources will help you maximise the benefits of outsourced arrangements

Capability transfer

When outsourcing core APS work, mechanisms must be in place to transfer knowledge and skills into the APS. This ensures capability gaps are not created or perpetuated.

These can be included as deliverables and milestones in contracts.

The following resources will help will get you started.

Knowledge transfer can be enabled through contract and supplier management. More information is at this link

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