Procurement audit finds fault with Australian Passport Office

A recent performance audit by the Australian National Audit Office (ANAO) has uncovered procurement issues within the Department of Foreign Affairs and Trade (DFAT), specifically through its Australian Passport Office (APO). The audit highlights deficiencies in the management of procurement processes that have raised concerns about the effectiveness and efficiency of the office.

This comes as the country recently advanced its digital travel infrastructure by replacing the traditional Incoming Passenger Card (IPC) with the new Australia Travel Declaration (ATD). The digital upgrade enables travelers to share their information with airport security using a QR code displayed on their smartphone.

According to the document, the DFAT did not appropriately plan the procurement activities for its Australian Passport Office, there was no overarching procurement strategy, and the department engaged a contractor to develop a multi-year procurement strategy that was never completed.

Published on November 1, 2024, the audit indicates that the APO has not consistently adhered to key procurement practices, resulting in inadequate transparency and accountability. Despite the importance of efficient procurement in ensuring timely and secure passport services, the audit found that many contracts were not appropriately monitored, and there were instances of non-compliance with established policies.

The audit’s objectives were to ensure compliance with the Commonwealth Procurement Rules (CPRs) and assess whether DFAT’s procurement practices achieved value for money. The report concluded that DFAT had fallen short of these goals, with inadequate documentation and oversight of procurement decisions, often leading to delays and a lack of accountability.

The two largest cost underestimations occurred in a bulk labor hire contract with Randstad Pty Ltd and a contact center contract with Datacom. Additionally, the APO conducted a limited tender by direct-source for services from Deloitte valued over its $80,000 threshold, which, according to the document, was in breach of the CPRs. A $22 million contract for personalization of biometric passports by Mühlbauer was found by DFAT to have ballooned to $42.5 million. The APO did not perform adequate market research prior to awarding this contract, according to the report.

Among the findings, the ANAO identified that the APO failed to conduct thorough risk assessments for significant procurement activities, which could potentially jeopardize the integrity of passport services. Furthermore, the audit noted a lack of documentation supporting procurement decisions, which undermines the accountability of the process.

Established in July 2006, the Australian Passport Office is tasked with issuing passports to Australian citizens both domestically and internationally, operating under the framework of the Australian Passports Act 2005. The office collaborates with diplomatic missions worldwide to facilitate passport services, making it one of DFAT’s key functions.

The report calls for urgent reforms to strengthen the procurement framework within the APO. This includes recommendations for enhancing oversight mechanisms and ensuring that all procurement activities are conducted transparently and in accordance with legal requirements. The ANAO emphasizes that addressing these issues is crucial not only for improving operational efficiency but also for safeguarding public trust in Australia’s passport services.

DFAT has acknowledged the findings and noted its commitment to implementing the recommended changes to improve procurement practices. The department aims to restore confidence in the system, particularly in light of ongoing demands for passport services amid rising travel activity.

Last year, the ANAO released its audit work plan for 2023-24, which included a potential review of the government’s digital identity program.

Article Topics

Australia  |  biometric passport  |  Datacom  |  Deloitte  |  digital ID  |  government purchasing  |  Mühlbauer