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Thursday, September 23, 2010

Still too much confidentiality in Commonwealth contracts

The annual Australian National Audit Office performance audit to assess the appropriateness of the use and reporting of confidentiality provisions in Australian Government contracts, in accordance with a 2001 Senate Order, highlights some improvements - around 10% of the 42,000 contracts entered into in 2009 contained confidentiality provisions, consistent with experience over the previous three years, and a significant decline from 24 per cent in 2001–02 -but also ongoing problems.

An examination of a sample of 150 contracts, managed by 33 agencies, that were reported to Parliament containing confidentiality provisions, identified 52 (35 per cent) correctly, and 21 (14 per cent) incorrectly asserting confidentiality provisions contrary to the standard in Finance guidelines.  However the remaining 77 (51 per cent) did not contain confidentiality provisions but had been listed in documents tabled in Parliament as containing such provisions, potentially precluding or restricting the Parliament and the public from accessing information about them.

The audit concluded:
"Overall, while the use of confidentiality provisions has decreased since the Order was introduced, the benefit of the Order, as an accountability and transparency mechanism for Australian Government contracting activity, is not being fully realised due to incorrect use of confidentiality provisions and inaccuracies in contract reporting.."
The report attributes this partly to multiple and differing requirements for reporting on contracts. In addition to the Senate Order agencies are required to comply with Department of Finance instructions to report procurement activity in AusTender, an internet based system, including whether there is confidential information within any contract or agreement with another agency, for example, profit margins, or confidential information obtained or generated during the term of the contract.

But the report also draws attention to the fact that contract preparation practices in some agencies do not "support adequate consideration of the use of confidentiality provisions in contracts." Polite auditor language, pointing to the fact that confidentiality provisions end up in too many contracts without hard headed consideration of the need, or the merits.

Finance is urged to explore consolidation of reporting obligations and to promulgate consistent and more readily understood guidance. Agencies are implored to lift their game.

Culture (memo Information Commissioner Designate) almost certainly has something to do with what appears to be excessive caution, or willingness to comply with contractors wishes on the part of some public servants. (As an example price lists frequently crop up in confidentiality provisions.)

And consolidation of requirements and the cause of rigour would have been advanced if the opportunity had been taken in the Freedom of Information reforms to legislate for publication of contracts, and to define in law "commercial in confidence." Contract disclosures (or other categories of information required by administrative instructions to be published such as  grants) don't get a mention in legislated proactive publication obligations that will commence next May.

1 comment:

  1. 14% incorrect confidentiality provisions contrary to the standard in Finance guidelines is a huge

    Confidentiality Contracts