8. Procurement Risk

8.1  Risk management comprises the activities and actions taken by a relevant entity to ensure that it is mindful of the risks it faces, that it makes informed decisions in managing these risks, and identifies and harnesses potential opportunities6.

8.2  Relevant entities must establish processes for the identification, analysis, allocation and treatment of risk when conducting a procurement. The effort directed to risk assessment and management should be commensurate with the scale, scope and risk of the procurement. Relevant entities should consider risks and their potential impact when making decisions relating to value for money assessments, approvals of proposals to spend relevant money and the terms of the contract.

8.3  Relevant entities should consider and manage their procurement security risk in accordance with the Australian Government’s Protective Security Policy Framework.

8.4  As a general principle, risks should be borne by the party best placed to manage them; that is, relevant entities should generally not accept risk which another party is better placed to manage. Similarly, when a relevant entity is best placed to manage a particular risk, it should not seek to inappropriately transfer that risk to the supplier.


6 Department of Finance, Comcover Commonwealth Risk Management Policy


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Last updated: 08 March 2017