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Advising global cryptocurrency exchange operators on entry into Australian market July 31, 2018

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Do your construction documents conform with the new Ministerial Directions and Instructions for Public Construction Procurement? August 15, 2018

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Trials and Tribulations: ANAO’s lessons for conducting a trial

The Commonwealth Procurement Rules permit entities to conduct a procurement that is at or above the procurement threshold through a limited tender when the entity is procuring ‘a prototype or a first good or service that is intended for limited trial’ (rule 10.3(g)). Trialling a good or service can be of great value in policy development, as well as in the improvement of public services and their delivery.

However, procurements undertaken for the purposes of a limited trial must still demonstrably achieve value for money. In addition, the usefulness of the actual trial will depend on the information entities derive from its conduct.

On Tuesday, 17 July 2018, the Australian National Audit Office (ANAOreleased a report summarising the findings of its audit of the Australian Government’s Cashless Debit Card Trial (Trial).

The report contains key learnings for all Australian Government entities that are involved, or may be involved, in the development and implementation of a trial program or service.

Importantly, entities should be aware that in the report, the ANAO published the names of the tenderers for the evaluation services procurement that was conducted for the purposes of the Trial, the pricing offered by each tenderer (including unsuccessful tenderers) and the scoring and ranking given to each tender.

THE CASHLESS DEBIT CARD TRIAL

The Trial commenced in 2014 in Ceduna and the East Kimberly and is due to be concluded in June 2019. The Trial was designed to test whether social harm caused by alcohol, gambling and drug misuse can be reduced by placing a portion of a participant’s income support payment onto a card that cannot be used to buy alcohol or gambling products or to withdraw cash. The Trial was also intended to inform the development of a lower cost welfare quarantining solution to replace current income management arrangements.

In administering the Trial, the Australian Government Department of Social Services (DSS) undertook extensive consultation with industry and stakeholders, developed a communications strategy, established governance arrangements across key departments and developed risk management plans. In addition, DSS conducted separate procurement processes to engage a provider of the Cashless Debit Card and an evaluator of the Trial.

KEY LEARNINGS 

The key learnings from the ANAO’s audit for all entities responsible for the development and/or implementation of a trial include:

1. Define the trial’s objectives at the outset (ask: what are the ‘success factors’?).

2. Establish robust processes which will enable you to comprehensively evaluate the trial against those pre-defined objectives, and ensure those process are actually followed throughout the life of the trial. In particular:

  • key performance indicators should cover operational aspects of the trial, such as efficiency (including cost efficiency)
  • ensure you can measure the impact of the trial.

3. Identify risks relating to the trial and regularly review them throughout the life of the trial to ensure that appropriate mitigation strategies and treatments are in place, including:

  • ensuring you establish appropriate arrangements for consultation
  • ensuring the trial is responsive to operational issues
  • developing a risk plan and actively monitoring risks that are identified in the risk plan.

4. Ensure that there are clear decision points for adopting, exiting or expanding the implementation of the trial.

5. Consider whether the trial has been designed to adequately test the scalability of the program or service that is the subject of the trial. If broader implementation is a possible outcome of the trial:

  • ensure the trial is conducted so that scalability can be tested
  • if scalability is tested, ensure you have processes in place to undertake further evaluation of the trial.

6. If a procurement or grants process needs to be conducted for the purpose of implementing the trial, evaluate tenders fairly and consistently and in accordance with the processes prescribed in the relevant approach to market documentation and the Commonwealth Procurement Rules or the Commonwealth Grants Rules and Guidelines (as applicable).

7. Keep comprehensive records of your compliance with all processes for audit trail purposes. In particular, there should be an audit trail which enables you to demonstrate whether or not the trial objectives have been met.

Maddocks has advised on a broad range of Australian Government agencies with the development and implementation of trial programs (and associated procurement and grants processes).

For more information, please contact a member of our Commonwealth team.

AUTHOR
Victoria Wachniewski | Senior Associate
T +61 2 6120 4816
E victoria.wachniewski@maddocks.com.au

The Commonwealth Procurement Rules permit entities to conduct a procurement that is at or above the procurement threshold through a limited tender when the entity is procuring ‘a prototype or a first good or service that is intended for limited trial’ (rule 10.3(g)). Trialling a good or service can be of great value in policy development, as well as in the improvement of public services and their delivery.

However, procurements undertaken for the purposes of a limited trial must still demonstrably achieve value for money. In addition, the usefulness of the actual trial will depend on the information entities derive from its conduct.

On Tuesday, 17 July 2018, the Australian National Audit Office (ANAOreleased a report summarising the findings of its audit of the Australian Government’s Cashless Debit Card Trial (Trial).

The report contains key learnings for all Australian Government entities that are involved, or may be involved, in the development and implementation of a trial program or service.

Importantly, entities should be aware that in the report, the ANAO published the names of the tenderers for the evaluation services procurement that was conducted for the purposes of the Trial, the pricing offered by each tenderer (including unsuccessful tenderers) and the scoring and ranking given to each tender.

THE CASHLESS DEBIT CARD TRIAL

The Trial commenced in 2014 in Ceduna and the East Kimberly and is due to be concluded in June 2019. The Trial was designed to test whether social harm caused by alcohol, gambling and drug misuse can be reduced by placing a portion of a participant’s income support payment onto a card that cannot be used to buy alcohol or gambling products or to withdraw cash. The Trial was also intended to inform the development of a lower cost welfare quarantining solution to replace current income management arrangements.

In administering the Trial, the Australian Government Department of Social Services (DSS) undertook extensive consultation with industry and stakeholders, developed a communications strategy, established governance arrangements across key departments and developed risk management plans. In addition, DSS conducted separate procurement processes to engage a provider of the Cashless Debit Card and an evaluator of the Trial.

KEY LEARNINGS 

The key learnings from the ANAO’s audit for all entities responsible for the development and/or implementation of a trial include:

1. Define the trial’s objectives at the outset (ask: what are the ‘success factors’?).

2. Establish robust processes which will enable you to comprehensively evaluate the trial against those pre-defined objectives, and ensure those process are actually followed throughout the life of the trial. In particular:

  • key performance indicators should cover operational aspects of the trial, such as efficiency (including cost efficiency)
  • ensure you can measure the impact of the trial.

3. Identify risks relating to the trial and regularly review them throughout the life of the trial to ensure that appropriate mitigation strategies and treatments are in place, including:

  • ensuring you establish appropriate arrangements for consultation
  • ensuring the trial is responsive to operational issues
  • developing a risk plan and actively monitoring risks that are identified in the risk plan.

4. Ensure that there are clear decision points for adopting, exiting or expanding the implementation of the trial.

5. Consider whether the trial has been designed to adequately test the scalability of the program or service that is the subject of the trial. If broader implementation is a possible outcome of the trial:

  • ensure the trial is conducted so that scalability can be tested
  • if scalability is tested, ensure you have processes in place to undertake further evaluation of the trial.

6. If a procurement or grants process needs to be conducted for the purpose of implementing the trial, evaluate tenders fairly and consistently and in accordance with the processes prescribed in the relevant approach to market documentation and the Commonwealth Procurement Rules or the Commonwealth Grants Rules and Guidelines (as applicable).

7. Keep comprehensive records of your compliance with all processes for audit trail purposes. In particular, there should be an audit trail which enables you to demonstrate whether or not the trial objectives have been met.

Maddocks has advised on a broad range of Australian Government agencies with the development and implementation of trial programs (and associated procurement and grants processes).

For more information, please contact a member of our Commonwealth team.

AUTHOR
Victoria Wachniewski | Senior Associate
T +61 2 6120 4816
E victoria.wachniewski@maddocks.com.au