The Australian National Audit Office described the planning authority's contract procurement processes as "insufficient", finding they lacked transparency, appropriate record-keeping and competitiveness in a scathing audit report released on Thursday afternoon.

The authority reported 327 contracts, totalling $69.9 million, on the government's tender site during 2019-20 and 2020-21.

But the audit office found just 11 per cent of the more than 300 contracts went through an open tender process, whereby all potential suppliers are invited to participate in a procurement.

A little more than a third of the contracts' value, or $23.5 million, was conducted through a limited tender process, where the agency directly consults with one or more potential suppliers.

The report also stated that where "suppliers were directly approached, the pool of potential tenderers was often limited to those previously engaged by the NCA, or described by the NCA as being known to the NCA or its advisers".

Comparing the authority to all other non-corporate Commonwealth entities, the ANAO found it had underperformed by a long-shot.

Of NCA contracts valued at more than $80,000 posted to the federal government's AusTender site, just 23 per cent were let through open tender.

For all other non-corporate Commonwealth entities, that figure was 63 per cent.

The comparison was based on contracts valued more than $80,000 because, in general, the Commonwealth Procurement Rules do not mandate the use of open tenders for procurements below this amount.

The report also found that the authority had adopted an interpretation of "construction services" to "encompass goods or services not explicitly covered by the definition".

For construction services, procurements valued at more than $7.5 million must go to open tender, while generally that threshold is $80,000.

The report recommended the Department of Finance develop and issue guidance on applying the definition of "construction services" for this reason.

The ANAO report also said the authority's poor record-keeping meant it could not show value for money on many of the contracts it entered with suppliers.

READ MORE:

"When undertaking competitive procurement processes the NCA's approach has not been sufficiently open, fair and non-discriminatory," it said.

"Where open tenders were conducted, it was common for request documentation to include conditions for participation and/or other mandatory requirements which limited competition."

Examples of requirements which may have unfairly limited competition included a requirement for suppliers to demonstrate financial stability over three years, to hold a baseline security clearance and a police check, and a requirement hold a current organisational or individual membership with the Australian National Committee on Large Dams.

In a response to the audit office's criticisms, the NCA said it worked in a specialised area, requiring "unique or bespoke" assets and management systems.

It added it strived to achieve the best value for money within the guidelines, while balancing it with the need to be as practical as possible.

A number of areas still needed work, however, the NCA response conceded.

"On occasion, assets fail unpredictably, requiring that procurement activities be reactive, responding to unforeseen and unprogrammed events or driven by a situation that must be addressed immediately," NCA's response said.

"The NCA is progressively implementing a number of new arrangements and further education of staff to address the recommendations of this report."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: