An external secondee is a person seconded from outside the public sector who is embedded in your organisation to work for a period of time.
This includes all secondees from the private sector, such as a consultant or advisor seconded from a private firm or an independent contractor. But excludes:
- people hired through a dedicated labour hire organisation (often referred to as ‘temps’) as per the Staffing Services State Purchasing Contract
- secondees from the broader public sector, such as a public entity or state-owned enterprise.
Sometimes, a VPS organisation seconds people from the private sector to work in the VPS as an external secondee.
For example, an organisation may source an external secondee from a professional services firm to assist in the delivery of a policy, project, or program.
External secondees from professional services firms shouldn’t be engaged to undertake work identified as a universal and enduring public service function.
Identifying a conflict of interest
An external secondee has an ongoing loyalty to their home firm.
A home firm is the organisation an external secondee works at when they’re not on secondment. For example, if an external secondee is on secondment at a department but is employed by ‘XYZ Firm’, then XYZ Firm is their home firm.
A conflict of interest arises if a home firm is a prospective bidder to supply goods or services and has an external secondee embedded in:
- the immediate work area the goods or services are being procured for
- the procurement unit
- another work area that is part of the procurement process.
This is because the public could reasonably form the view that the external secondee may influence the tender process.
The external secondee must declare a conflict of interest in writing.
This is a situation that the home firm should consider when it’s providing an employee as an external secondee to the VPS. Consider informing external agencies of this risk before the secondment is agreed to.
Any management plan needs to deal with the specific circumstances of a conflict of interest. You can’t make a management plan in advance, but you can try and prevent conflicts of interest from arising in the first place.
How to manage this conflict
If you’re an external secondee with a conflict of interest you need to:
- declare the conflict in writing
- follow the management plan your manager develops in consultation with you to manage the conflict.
When developing the plan, your manager will consider the relevant factors. For example:
Impartiality requirements (all employees)
All employees, including external secondees, are bound by your organisation’s conflict of interest policy and the code of conduct.
An external secondee must be impartial in the performance of their public duties. For example, they:
- must not provide their home firm with any confidential information
- must not engage in anti-competitive practices such as attempting to influence the tender documents to suit their home firm
- must not promote their home firm’s interests in any way.
Home firm is a prospective bidder
All external secondees whose home firm is a prospective bidder must be removed from any involvement in the design or approval of the tender documents.
This applies to all external secondees in:
- the immediate work area (particular project, team or function the goods or services are being procured for),
- procurement unit or other part of that particular procurement process.
Otherwise, it would be reasonable for members of the public to believe that the external secondee could influence the outcome of the design of the tender specifications
Home firm doesn’t submit a bid
If the home firm does not submit a bid, their external secondees can become involved in the procurement process from then on.
Home firm submits a bid
When to exclude a home firm bid
If a home firm submits a bid:
- their external secondees must remain removed from the procurement process
- if this is not possible then the home firm’s bid must be excluded, unless it’s not in the public interest to do so.
This is because it would be reasonable for members of the public to believe the external secondees involved in the procurement process will consciously or unconsciously influence the outcome of the bidding.
When not to exclude a home firm bid
Examples of when it may not be in the public interest to exclude a home firm’s bid include:
- there is a shortfall of suppliers who can perform the work to the required standard
- it would result in a narrow and significantly less competitive field
- the cost of another supplier would be prohibitively higher.
Pre-existing contractual obligations
Sometimes your organisation will have a pre-existing contract that requires you to engage the home firm, regardless of the presence of external secondees. It would still be highly advisable to appoint an independent probity adviser to manage the delivery of the contract.
Appointing an independent probity adviser
In some circumstances, it will be highly advisable to appoint an independent internal or external probity adviser to oversee the procurement process, including:
- provide probity advice
- assist with risk mitigation
- oversee decision-making.
Examples of when it will be highly advisable to appoint a probity adviser include:
Tender specifications
- If it’s not feasible to remove all of a prospective bidders’ external secondees from involvement in the design of the tender specifications – for example, because of the numbers involved or because one or more of them has expertise that is critical to the tender design
- if none of a prospective bidder’s external secondees are involved in the procurement process but most of the workers on the project are external secondees.
Tender selection
- If it’s not in the public interest to exclude a home firm bidder, it would be highly advisable to appoint an internal or external independent probity adviser to oversee the procurement process.
- If pre-existing contractual obligations require that the home firm be appointed when it might otherwise have been excluded.
Tender documentation
If a home firm intends to submit a bid, it must declare a conflict of interest in its tender documentation.
When any bidder provides their tender documentation, it’s good practice for your organisation to check for conflicts of interest — even if none have been declared.
The check should include whether there are any external secondees embedded in the procurement process. If there are, check if their home firm is a bidder.
The requirement for a bidder to declare a conflict of interest is consistent with the invitation to supply template and the supplier code of conduct.
Goods and services procurement
Clause 2.9(a) in the invitation to supply template sets out the rules for the procurement and states that:
Invitees must not, and must ensure that their Representatives do not, place themselves in a position that may give rise to an actual, potential or perceived conflict of interest between the interests of the State and the Invitee’s interests during the Invitation Process.
The Invitation to Supply template is in the process of being updated and changes will be reflected in this guide once the update is complete.
Construction procurement
The request for tender conditions template sets out the rules for procurement. Section 12 (a) covers probity and competitiveness, stating that:
By submitting a Tender, the Tenderer warrants that:
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the Tenderer and each of its Associates are not a member of, or otherwise involved with, a competing Tenderer in respect of the Project;
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as at the Closing Time, no actual, potential or perceived probity issues (including any actual, potential or perceived conflicts of interest) exist or are likely to arise in respect of the Tenderer or each of its Associates or its involvement in the Project, including any relationships between the Tenderer and a competing Tenderer (including the existence of related parties, common directors, advisers or employees), other than those probity issues disclosed and described in its Tender; and
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it will not place itself, and will procure that its Associates do not place themselves, in a position that may or does give rise to an actual, potential or perceived probity issue at any time during the Tender Process.
In section 18.1, the template defines associate as:
Associate means any officer, employee, secondee, agent, consultant, contractor, nominee, licensee, or advisor and
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in the case of a Tenderer, includes [#] [Drafting Note: Insert project-specific associates.] but excludes the Principal and its Associates;…
Example: Jo is an external secondee in the immediate work area
The projects unit of your organisation is issuing a tender for the design and delivery of a large program. Most of the employees in the unit are external secondees from the same consulting firm.
Jo is an external secondee and would usually be involved in the procurement process through their role in the drafting of the tender documents. Jo’s home firm is a prospective bidder.
Jo’s conflict of interest
Each secondee in the project’s unit has a conflict of interest, including Jo.
The public could reasonably form the view that the external secondees’ presence in the unit may influence the procurement process to some degree. For example:
- Jo’s involvement in drafting the tender documents may result in the tender specifications being tailored to suit the home firm
- the presence of other external secondees may result in the conscious or unconscious promotion of their home firm or other types of conflict of interest.
How to manage this conflict of interest
The external secondees should be reminded of their obligations under the code of conduct, including the impartiality requirements.
Jo must submit a conflict of interest declaration. Jo’s manager will develop a conflict of interest management plan for Jo, in consultation with them.
To minimise risk, each of the other external secondees could be asked to also declare a conflict of interest in writing.
When developing a plan, the manager will consider the relevant factors. For example:
Before bids are submitted
Jo and the other secondees should be removed from any involvement in drafting or approving the tender specifications.
If this isn’t feasible (for example, due to Jo’s expertise in the project), Jo’s involvement should be restricted as far as practical.
Due to the presence of the external secondees in the immediate work area, it would be highly advisable to appoint an internal or external independent probity adviser to oversee the drafting and approval of the tender specifications.
Home firm bidder
Unless it’s not in the public interest to do so, the home firm must be removed from consideration if:
- the home firm submits a bid
- Jo and the other secondees can’t be removed from involvement in the procurement process and immediate work area.
This applies even if the external secondees in the immediate work area aren’t involved in the procurement process. This is because their presence as members of the work team may bias the selection and approval of the procurement.
After bidding closes
If the home firm bid is excluded
If the home firm’s bid is excluded, Jo and the other external secondees in the team can be involved in the procurement process from that point onwards.
If the home firm bid isn’t excluded
If it isn’t in the public interest to exclude the home firm’s bid, Jo and the other secondees in the team must not be involved in deciding or approving the procurement.
If this isn’t feasible (for example, due to the number of external secondees involved), it’s highly advisable to appoint an internal or external independent probity adviser to oversee the procurement process.