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The tender trap

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.

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The file should be used in conjunction with the following text. It does not include captioning.

(Arthur Brown and his staff member Tina McKenzie are interviewed separately about a perceived conflict of interest)

Arthur Brown, EL1 Manager, Office Services Team: My area looks after a number of contracts—for photocopiers, printers, copiers, stationery, that sort of thing. Most of these are quite straightforward. Some of our providers have been with us now for quite a long period of time, but occasionally they pose some management challenges—performance issues, maintenance, quality, that sort of thing.

Tina McKenzie, APS 6, Office Services Team: I was actually never very happy working for Negahatchi, the photocopying company I used to work for before I actually joined the department. They are certainly not up to the standards of the department's provider, Gynoma. They're just in a different league of their own and they certainly know how to build relationships with their clients and obviously that's one of the major things you have to look out for.

And they're just a great employer. Recently my brother-in-law got a job working for them and he's got a disability, so it's been quite hard for him looking for work and him getting anything has been fantastic and he loves working for them too.

Arthur: Take the photocopier one for example—that's with the Gynoma company—and Tina's been helping me with that recently. A few months ago there was some maintenance issues, things were not quite up to scratch. I don't really know quite what the problem was. They said it was some sort of short term staffing issue. Anyway, we worked through the issues and I guess it's largely sorted now. I hope so, but it did create a little bit of bad feeling around the department with things just not being fixed properly.

Tina: I was actually very pleased to get into the public service. My boss Arthur has been fantastic, giving me heaps of different opportunities, empowering me, letting me work on different projects, you know, that sort of stuff. It's been fantastic. Anyway, a few months ago he had to go around to our different state offices, so I had to look after things here while he was away.

Arthur: Tina's very good. She joined us recently from the Negahatchi company where she had worked for some time. So because of that she knows the industry very well. She has an excellent understanding of the industry, of the products and of the department's needs.

Tina: We do have regular meetings with Gynoma, our provider. A couple of months ago we went to Tarragon restaurant down by the lake and it was fantastic. I don't actually think Arthur's been there before so I felt really lucky to actually go. They even invited me to their corporate box at the rugby and I went that night as well and we just had a ball and it was fantastic. It was great.

Anyway, so at that meeting we discussed a few of the maintenance issues we'd been having and they assured me that everything was fixed.

Arthur: In the last month or so we've just actually completed a fresh tender process to establish who will be our future provider for photocopiers and this should have taken in account the maintenance issues that I have referred to. I noticed though that the assessment panel concluded that Gynoma was well ahead of the competition. I was a little bit surprised by that but I am sure its fine and given her experience in the industry—and to give her a development opportunity—I asked Tina to take a significant role in that tender process.

Tina: Anyway, another way Arthur's been great was to let me recently work on the tender process for buying our new photocopiers for the department. It was an absolutely huge process and it was great and basically we decided to go with Gynoma. As I said before they're just in a different league.

Reflecting on the exercise: A tender trap

Conflicts of interests can be real or perceived. Confidence in the public service may be jeopardized if the community perceives a conflict of interest between a public servant's employment and their private interests.

In particular, care needs to be taken when working with organizations that have a contractual relationship with an agency.

It is not necessarily wrong, or a breach of the Code, to have a conflict of interest. In our modern working environment conflicts can arise fairly frequently. And it's not always practical to avoid them. What is important is that conflicts of interest are disclosed so they can be managed.

The nature of the work in the public service and the relationship with external clients and stakeholders in business, in other jurisdictions, non-government organizations and international organizations has changed considerably in recent years. At times, particularly for senior employees, acceptance of offers of entertainment or hospitality can provide valuable opportunities for networking with stakeholders.

The main risk of accepting a gift or benefit is that it may result in an actual or perceived conflict of interest. At the extreme, it could be perceived as a bribe.

Accepting gifts or benefits from a person or company will not usually be appropriate if they are involved in a tender process with the agency.

Relevant Values and elements of the Code of Conduct

  • The APS is apolitical, performing its functions in an impartial and professional manner (s10(1)(a) of the Public Service Act).
  • The APS has the highest ethical standards (s10(1)(d) of the Public Service Act).
  • An APS employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment (s13(7) of the Public Service Act).
  • 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 any other person (s13(10) of the Public Service Act).
  • An APS employee must behave honestly and with integrity in the course of APS employment (s13(1) of the Public Service Act).
  • An APS employee must act with care and diligence in the course of employment (s13(2) of the Public Service Act).

Key issues

Tina's brother-in-law's employment with Gynoma: Does Tina have an interest in ensuring her brother-in-law keeps his job? If so, could that have influenced her dealings with Gynoma? Is this a conflict of interest that should have been disclosed and if so, when?

Accepting lunch and a box at the rugby/tender process: Has Tina created a situation where an obligation is owed, or the perception of an obligation? How might others view her actions? Does her behaviour amount to a breach of the Code of Conduct? If so, why? What should she have done? What are the likely consequences of Tina's dealings with Gynoma?

What is Arthur's role in this situation? How could he have managed the situation better? Has Arthur breached the Code of Conduct?

Tips

  • As soon as you think you may have a conflict of interest raise the issue with a supervisor.
  • Find out what your agency's polices are on accepting gifts and benefits.
  • Know your risk areas as a manager in relation to ethical issues.
  • Good induction processes by managers can often head off problems.

Useful references

APS Values and Code of Conduct in Practice: a guide to official conduct for APS employees and agency heads (Chapters 7, 11 and 12) In whose interests?: preventing and managing conflicts of interest in the APS