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Sect 2.7 Working with the private sector and other stakeholders

Note that this page is under review. It has not yet been updated to reflect changes to the Public Service Act 1999 and Public Service Regulations 1999, or contained in the Australian Public Service Commissioner's Directions 2013, that came into effect on 1 July 2013. Agencies may continue to use the
guidance for reference, but should be aware that it may not reflect current legislative requirements.

Relevant Values and elements of the Code of Conduct

APS Values

  • The APS has the highest ethical standards.
  • The APS is openly accountable for its actions, within the framework of Ministerial responsibilities to the government, the Parliament and the Australian public.
  • The APS delivers services fairly, effectively, impartially and courteously to the Australian public and is sensitive to the diversity of the Australian public.

APS Code of Conduct

  • An APS employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment.
  • An APS employee must not make improper use of: (a) inside information or, (b) the employee's duties, status, power or authority, in order to gain, or seek to gain, a benefit or advantage for the employee or for any other person.
  • An APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS.


Employees involved in government procurement should be mindful of potential conflicts of interest that might arise and not use their position to benefit themselves or any other person.

The Commonwealth Procurement Guidelines (December 2008) issued by the Minister for Finance and Deregulation set out the framework in which Financial Management and Accountability Act agencies are expected
to manage procurement. The CPGs apply to the purchase of all goods and services. 'Value for money' is the core principle of Australian government procurement. This is underpinned by three supporting principles:

  • encouraging competition
  • efficiency, effectiveness and ethics
  • accountability and transparency.

The Australian Government has agreed to establish a coordinated procurement contracting framework to deliver efficiencies and savings from goods and services in common use by Australian Government departments and agencies who are subject to the Financial Management and Accountability Act 1997 (FMA Act). The aim of this policy is to:

  • reduce the impost and cost of doing business for both agencies and industry;
  • reduce duplication and improve purchasing efficiencies;
  • provide consistent and transparent purchasing practices; and
  • enable aggregation of government purchasing power to obtain better pricing arrangements and value for money outcomes.

For more information about the coordinated procurement contracting framework, go to www.finance.gov.au/procurement/coordinated-procurement-contracting.html.

Competitive procurement processes

The procurement process itself is an important consideration in achieving value for money. Participation in a procurement process imposes costs on agencies and potential suppliers and these costs should be considered when determining a process commensurate with the scale, scope and relative risk of
the proposed procurement. Division 2 of the Commonwealth Procurement Guidelines sets out the mandatory procedures to be followed for covered procurements.

Employees should read the procurement policy information available on the Department of Finance and Deregulation's website. This site includes information about:

  • Procurementpolicy and practice
  • Procurement and CTC best practice guidance
  • Related Finance Circulars.

In addition, Chief Executive Instructions (CEIs) issued by agency heads may include directions to employees involved in procurement.

The Values and Code and private sector providers

Non-public servants are increasingly providing services to public sector agencies and government services to the general public, on behalf of APS agencies.

Non-public servants may, for example:

  • deliver services on behalf of government direct to the public, such as job network providers
  • deliver in-house services to government agencies such as desk-top computer services
  • work as consultants on specific projects within agencies.

Increased contracting with the private sector and community organisations has led to improvements in efficiency and programme effectiveness, but has also introduced new levels of complexity and risk to public service agencies and presented challenges for accountability.

The CPGs indicate that officials, departments and agencies are answerable and accountable for any plans, actions and outcomes that involve spending public money. Agencies should include provisions in tender documentation and contracts that alert prospective providers to the public accountability requirements
of the Commonwealth.

When establishing relationships with providers, agencies need to consider how the Values and Code might apply, and how they will be promoted and compliance monitored, including the use of contract provisions. Generally, the Values and Code are particularly relevant where contractors are delivering
services to the public on behalf of the APS. However, not all of the Values and the Code are relevant even in these circumstances. The Values relating to service delivery are critical, as is part of the APS Value relating to responsiveness to government in implementing the government's policies and programmes,
but Values applying to the internal APS workplace relationships are not relevant to contractors' own employment practices, although other Commonwealth employment legislation, such as occupational health and safety and anti-discrimination, will apply.

Additionally, the Privacy Act 1988 has been amended so that since December 2001, each agency is required, when entering into a contract on behalf of the Commonwealth, to ensure that the contract does not
authorise the contracted service provider, or a subcontractor, to do an act or engage in a practice that would, if done by the agency, breach the Information Privacy Principles.

Agencies need to take steps so that contractors are aware that APS employees are bound by the Values and the Code and do not place public servants in a position where their impartiality or professionalism may be compromised. As well, any action that would give rise to a real or apparent conflict of
interest on the part of the agency decision maker must be avoided. Agencies are accountable to the Government and Parliament through their Minister for their decisions and may also be required to justify their decisions and process through the courts if challenged, for example by another tenderer.

Partnerships and alliances

Establishing partnerships and alliances with private sector providers may be a good method of providing goods and services. They may be particularly useful where it is desirable to share risk or where circumstances are likely to change during the life of the contract. They may be particularly relevant
for long-term contracts, or where a private provider is delivering services direct to the public on behalf of government.

Partnerships and alliances typically involve an ongoing relationship between public servants and contractors. It is important that non-public servants are aware of the expected standards of conduct of APS employees; the degree to which they must comply with those standards will depend on the nature
of the contract and work undertaken.

Partnerships and alliances do not reduce the public sector agency's accountability to Government, Parliament and the public. Accountability may require additional processes to ensure the allocation of risk and the management of the contract are transparent. When establishing agreements and contracts,
agencies should consider:

  • the extent to which the partner and their employees will be expected to comply with the APS Values and Code
  • additional conduct requirements which reflect the agency's business needs
  • the action that may be taken if the required standards are not met.

Some agencies have jointly developed with companies and industry groups codes of ethics that promote a common understanding of high ethical standards, which complement the APS Values and Code.

Corporate sponsorship

Agencies sometimes obtain corporate sponsorship to resource specific activities or programmes. Corporate sponsorship can be cash or in-kind where the sponsor provides a product or a service. A sponsorship agreement can last a few hours for a specific event or span several years.

APS employees who manage corporate sponsorship should be aware of accountability, probity and ethical issues. There is a greater risk of public criticism so the highest ethical standards must be applied. Corporate sponsorship must not influence or appear to influence agency goals, strategic direction
or integrity. Relations between agencies and corporate sponsors need to be transparent and able to withstand public scrutiny. Some of the same risks involved in accepting gifts or benefits apply to corporate sponsorship, and it may be useful to refer to the cautions mentioned in Chapter 12: Gifts and
benefits when considering sponsorship arrangements. If there is any doubt about the propriety of a proposed sponsorship agreement, APS employees should consider whether or not the arrangement would withstand critical public scrutiny.

Before making an agreement, APS employees should consider whether association with the sponsor could lead to any conflict, perceived or actual, with agency policies, practices and objectives or the Government's broader policies and objectives.

The terms of a sponsorship agreement should be written. This may simply involve an exchange of letters. The more complex or valuable the sponsorship, the more detailed the agreement should be. When drafting an agreement, it is important that it does not include conditions that would limit or appear
to limit the agency carrying out its functions. It would be useful to refer to the relevant APS Values and elements of the Code. If the agency intends to co-badge a product or service, it is important the sponsor understands and upholds the Values.

Sometimes an agency may use a consultant to help raise corporate sponsorship. It is important the agency works closely with the consultant. The consultant should inform potential sponsors about the event's objectives and the expected benefits to both parties. The agency should provide the consultant
with clear guidelines about how the agency expects them to work on its behalf.

Agencies preparing guidelines on corporate sponsorship may find it useful to refer to the NSW Independent Commission Against Corruption (ICAC) publication, Practical Guide to Corruption Prevention (1997), which includes a section on sponsorship.

Commercial-in-confidence information

APS employees need to carefully consider whether their obligation to be openly accountable allows denial of access to information that may be commercial-in-confidence.

The CPGs set out measures to support accountability and transparency in relation to agencies' procurement. In particular, they specify that agencies should include provisions in tender documentation and contracts alerting prospective providers to the public accountability requirements of the Commonwealth,
including disclosure to Parliament and its Committees, and that agencies should consider, on a case-by-case basis, what might be commercial-in-confidence when designing any contract.


Increasingly, agencies are expected to develop close links with interest groups such as consumer and industry associations, provider organisations and think-tanks. These relationships often go beyond the exchange of information and may involve more formal collaboration or negotiation about government
decision making.

Good relationships help agencies achieve effective and efficient implementation of government programmes, thereby supporting the APS Value of achieving results.

APS employees need to be clear about their obligations to be impartial, accountable and responsive to government. Close relationships with stakeholders should better inform decision makers, but should not constrain Ministers or involve unauthorised disclosure of information. The closer or more formal
the relationship, the more important it is to clarify expectations and obligations, including the handling of confidential information and the transmission of advice.

Conflicts of interest may be significant, particularly where the stakeholder may have an involvement in decision making or access to confidential information. The very role of stakeholders in representing interests may both justify why it is important to develop a close relationship, and constrain
the nature of that relationship. Agencies should obtain statements of interests to ensure open discussion and agreement on the management of conflicts of interest. Stakeholders such as industry or consumer representatives may have their own obligations to members that APS employees need to appreciate
in order to consider the best management of conflict of interest.

Last reviewed: 
29 March 2018