Australia: Amendments To The Commonwealth´s Legal Services Directions: Part 2

Last Updated: 27 December 2008
Article by Michael Palfrey

Key Point

  • The key change following this second wave of reforms concerns the common tender package.

The first wave of reforms to the way the Commonwealth purchases its legal services were implemented on 1 July 2008. As we discussed in our earlier article, those amendments included measures for:

  • additional expenditure reporting requirements on the part of Commonwealth agencies;
  • an increased focus on alternative dispute resolution; and
  • avoiding discrimination against legal services providers who act pro bono against the Commonwealth.

Since then, the Government has implemented further changes to the Legal Services Directions 2005 (LSDs), which are aimed at:

  • streamlining how Commonwealth agencies procure their legal services; and
  • co-ordinating requests for advice on constitutional law issues.

It is these changes which are discussed in this article. However, in a related development, the Office of Legal Services Co-ordination (OLSC), the branch of the Attorney-General's Department (AGD) that oversees the LSDs, recently changed the procedure for processing requests to engage barristers above the daily cap of $5,000. All requests for fees above that rate must now be made to the Attorney-General, at Ministerial level.

What has changed?

Turning to the changes to the LSDs, effective from 18 September 2008:

Procurement of legal services

Commonwealth agencies must now:

  • use the approved common tender package, developed by the OLSC, when setting up a panel of legal service providers;
  • consider each legal services provider's pro bono work when selecting legal services panels;
  • generally not resort to mini-tenders for legal work valued at under $80,000; and
  • include in their contracts for legal services a requirement that the legal services provider report annually to OLSC, using a template approved by OLSC.

The key implications of the Commonwealth's modified approach to the procurement of legal services are:

A common tender package

The common tender package, comprising a template Request for Tender (RFT) and Deed of Standing Offer, is now available on the OLSC website.

Under the Deed, legal services providers offer to provide services to the signatory agency, as well as any other listed portfolio agency. The tender package also allows other agencies to sign up to the Deed, by issuing a "Notice of Inclusion Form", with the legal services provider. This innovation is intended to allow new or reconstituted agencies to piggy-back on panels established by larger agencies within the same portfolio.

Consideration of pro bono work

One of the evaluation criteria in the common tender package RFT, that each legal services provider must address when responding to an agency's RFT, relates to the provider's pro bono legal work. Notably, pro bono legal work extends to past and future pro bono work, carried out not only in Australia but also in the
Asia-Pacific region.

Removal of the reliance on mini-tenders

Commonwealth agencies may not now request competitive quotes from legal services providers already on their legal services panel, where the value of the legal work is under $80,000, unless there is a need to test the panel's expertise in a new area of work. Consequently, direct sourcing for legal work under the $80,000 threshold will generally be required.

Reporting template

A draft copy of the reporting template is now available from the OLSC website. The template will be finalised by the end of December, once legal service providers have had an opportunity to comment on its content. However, in its current form, the template only deals with the provider's pro bono work.

Constitutional law issues

In addition, an FMA agency that requests advice on constitutional law issues must now forward a copy of that request to the AGD. This change is intended to ensure that the AGD is fully informed about the constitutional issues that agencies experience; and, to avoid duplication in requests for advice from different agencies.

While this new requirement does not apply to CAC Act bodies, they are still obliged to inform the AGD of details of litigation (including threatened or proposed litigation) which gives rise to constitutional issues.

What are the practical implications of the changes?

The key change following this second wave of reforms concerns the common tender package. It only applies to future procurements, so will not impact upon existing panel arrangements. However, Commonwealth agencies should now spend time acquainting themselves with the new tender documentation.

When the time comes to establish new legal services panels, the common tender package should save time and resources in running tender processes, especially in the case of smaller agencies which can piggy-back off the arrangements established by larger portfolio agencies.

In relation to the amendments concerning requests for legal advice on constitutional issues, FMA agencies should reconsider how such requests are made internally. Maintaining a co-ordinated approach will help ensure compliance with the new requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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