Strategic Sourcing, Government Services Group Department of Treasury and Finance

Probity Risk Assessment Tool

The probity risk assessment tool* is a quick self-assessment of tender probity risk. This version is for professional services contracts and tenders only

1. Introduction
This simple spreadsheet assessment tool is for use in initial assessments of the probity risk associated with tenders. It assists in deciding whether to appoint a probity adviser/auditor for a particular tender. This application is a screening guide only and is not a substitute for a comprehensive assessment.

2. Assessing risk in procurement

The level of risk can be generally defined as a function of consequence times likelihood. The risk consequence involves considering matters such as the project complexity, inherent process/project risk and the value of the procurement. The likelihood of risks eventuating involves considering matters such as the assessed ability of the procurement team to manage probity issues and the nature of the market place. For example, a complex, high-value engagement may be assessed as having an inherent high risk likelihood. However, if the project team consists of an extremely capable project director, commercial, technical and legal advisers and other experienced team members who are fully aware of tender process issues and who are assessed as capable of managing a successful tender output and acceptable probity the likelihood of risk arising may be minimal. In this case, the overall risk to government may be assessed as low for what is an inherently risky project. The complexity and requirements of the risk assessment depend on the nature of the process itself. For example, a complex, high-value project should have extensive risk identification, allocation and management processes in place. A simple low-risk procurement may warrant very simple processes and procedures.

3. Using the Probity Risk Assessment Tool

The Probity Risk Assessment Tool is an electronic tool that that is based on the user answering a series of questions contained within the next sheet of this tool (refer to the Questionnaire tab on the electronic version of the spreadsheet) relating to the tender process and characteristics and the confidentiality and conflict of interest issues relating to the tender. Simply place an 'x' in the appropriate yellow box to the right of the question on the online version. Once you have completed answering each of the questions, go to the report page (refer to the Report Tab on the online version). The report will provide a report on the assessment of the probity risk applying to the key areas of the tender process, an overall rating and some guidance on the risk-based need to appoint a probity auditor and the policy requirements regarding the need for a project-specific process conduct plan.

* DTF would like to acknowledge that the idea for this Probity Risk Assessment Tool originated with the Victorian WorkCover Authority.

Probity Risk Assessment Tool Version 2.1 Release Date: June 2009, Revision 1 Release Date: September 2009

Strategic Sourcing, Government Services Group Department of Treasury and Finance

Questionnaire Probity Risk Assessment Tool

Tender Name:

Date of Probity Risk Assessment

Conducted by

Questions Tender characteristics The total value of the tender is? NB: Government policy for a tender value>$10m requires preparation of a project-specific procurement conduct plan.

Answers

Place an x below

>$10m between $1m - $10m between $150 000 - $1m < $150 000 Time is critical Time is reasonably important Time is not a driver Very tight time schedule Time schedule manageable Large contingency in timeline Yes, high media interest Of medium interest Of little interest High (>$1m &/or 8 months) Med (>$150 000 &/or 2 months) Low (< $150 000 & < 4 months)

Are the tender timelines for delivery a project driver?

Is the time for delivery of the tender tight?

Will the tender attract media attention?

What investment is expected on the part of each tenderer in submission of the tender? (e.g. in money and time from initial engagement until contract award)

To what extent has Government made announcements committing to the tender?

Election commitment Press release Verbal ministerial commitment No public commitment Essential Important Not linked Essential Important Not linked >$10M /annum between $1m - $10m /annum between $150 000 - $1m /annum < $150 000 /annum Nil Nil Some experience Very experienced: successful track record Yes No Partnerships Victoria Construction Goods & services Unknown History of challenging probity Some likelihood Challenge considered unlikely

To what extent is the program/project a pre-requisite for the successful delivery of a major legislative requirement?

To what extent is the program/project a pre-requisite for the successful delivery of a major policy?

What impact will the project have on government annual budgets from projected revenues?

What is the allocated team's experience of successful delivery of this type of program/project?

Are there third-party revenue opportunities for bidders in the project arrangement?

What is the project category?

Is the industry that will respond to the tender known for challenging probity?

Probity Risk Assessment Tool Version 2.1 Release Date: June 2009, Revision 1 Release Date: September 2009

Strategic Sourcing, Government Services Group Department of Treasury and Finance

Questionnaire Probity Risk Assessment Tool

Tender Name:

Date of Probity Risk Assessment

Conducted by

Place an x below

Effective competition How widely is the tender advertised? Selected tenderers Restricted invitation Public advertisement Multiple without prime contractor Multiple with prime contractor Single supplier Unknown Small no. or selected respondents <10 respondents expected >10 respondents expected How mature is the prospective market in delivering or meeting the needs of this program/project? Immature market: no tender experience Some experience Very experienced: successful tender track record

Complexity of the supply side arrangements

What is the market structure of potential respondents to the tender? (numbers expected to respond)

The tender process How many projects of this value has the project manager managed - or time in industry? Little or no experience Some experience >2 years or >4 projects > 10 years or >10 projects Unknown Yes No Are sub-contract firms likely to appear within multiple bid teams or consortia? Unknown Yes No

Are there likely to be firms which respond within multiple bid teams or consortia?

Accountability Do the Accountable Officer (or delegate) and the procurement team have a good understanding of government requirements for probity? Very experienced Some experience No experience

Consistency and transparency of process Are the project documents based on standard procurement documents? Yes No

Evaluation How clearly are project objectives articulated and how well are they linked to the tender evaluation criteria? Evaluation criteria unclear Some links exist Very clear articulation

Security and confidentiality Is the agency experienced at processes for receiving and managing bid information? Yes No

Probity Risk Assessment Tool Version 2.1 Release Date: June 2009, Revision 1 Release Date: September 2009

Strategic Sourcing, Government Services Group Department of Treasury and Finance

Questionnaire Probity Risk Assessment Tool

Tender Name:

Date of Probity Risk Assessment

Conducted by

Conflict of interest How likely is it that members of the project and evaluation team will have material contact with prospective tenderers during the tender process as part of social engagements or business-as-usual activities? How likely is it that members of the project and evaluation team members will have previous or existing social or professional relationships with any of the prospective tenderers? Very likely Some likelihood No contact likely Very likely Some likelihood No contact likely Very experienced Some experience No experience

Place an x below

Is the project manager experienced in managing potential or actual conflicts of interest that may arise?

Probity Risk Assessment Tool Version 2.1 Release Date: June 2009, Revision 1 Release Date: September 2009

Strategic Sourcing, Government Services Group Department of Treasury and Finance

Report Probity Risk Assessment Tool

Tender name

Date of assessment Conducted by 0

Probity Risk Assessment Results Risk Rating Tender Characteristics #N/A Conflict of interest/Confitentiality #N/A #N/A

Overall Probity Risk Rating is low Recommended action

A tender with a HIGH probity risk rating will require the appointment of a probity practitioner. It is also advisable to examine those areas of the assessment with high scores to determine if additional treatment of the risk is required before continuing with the tender process.

A tender with a MEDIUM probity risk rating requires careful considation of the appointment of a probity practitioner. The decision will need to be based on a balance of the risks identified against the costs involved in that appointment. Areas identified at a medium or higher rating should be examined for opportunities for improvement and reduction of the risk.

A tender with a LOW probity risk may not require a probity practitioner.

Probity Risk Assessment Tool Version 2.1 Release Date: June 2009, Revision 1 Release Date: September 2009