The important role of the probity adviser

August 2020

Many countries, especially in Western Europe and North America, have processes in place to ensure transparency, fairness and integrity in the competitive tendering and award of major public sector contracts. In Australia, we use the term ‘probity’ to describe the required standards, and at all levels of government in Australia, the application of sound probity processes is a mandatory requirement for public tendering and procurement.

What is probity?

Probity means honesty and integrity, and in the procurement and contracting sense, probity assurance asks the question, ‘Is it fair to all?”.

There are four essential principles to promote probity which should be taken into account throughout all stages of the procurement process:

  • best value for money
  • impartiality and fairness
  • avoidance of conflicts of interest
  • accountability.

Outside the government agencies that enforce probity requirements and the private sector entities that are required to comply with them when bidding for government work, the concept of probity advice (or probity audit) is not readily understood.

Why is probity important?

The need for probity arose from the widespread adoption of competitive tendering and contracting philosophies in the late 1980s in the UK and the early 1990s in Australia. With a new emphasis on outsourcing and contracting for services, governments began to realise that the public sector was vulnerable to accusations of bias or unfair treatment of tenderers if those tendering processes were not open to scrutiny by external and independent auditors. The accountancy profession is, and always has been, ideally placed to fulfil this role.

The probity adviser: assuring procurement best practice

An independent probity adviser participates in the tendering and contracting process, advising the buying agency, and ultimately the government, to ensure fairness to all concerned. This means being certain that the procurement process has completed in line with all relevant government policies and guidelines, is free from bias, and is unlikely to be challenged as a flawed process by unsuccessful tenderers.

A breach of probity can result in:

  • termination of a procurement process
  • an aggrieved party ending the process
  • a delay in the project
  • an unfavourable outcome
  • an award of punitive damages and wasted resources for the government and respondents
  • increased costs
  • reputational damage.

Continuous probity assurance support

A probity auditor reviews the procurement processes at key stages or at the end of the process, commenting on the degree of compliance with policies and procedures demonstrated by the procurement team and the parent agency. A probity auditor may also, on behalf of the project director, conduct reviews of specific issues arising during a procurement process.

A probity adviser provides continuous probity support during a tendering or procurement process to ensure the procurement team considers the impact of probity requirements before making decisions. This minimises the risk of a probity breach. The adviser will support the process with probity reports, certificates and opinions.

Typically, a probity assurance assignment can range from a short-term, relatively simple procurement activity of around four to six weeks, through to large complex projects lasting four to seven years.

Expertise that adds value

The experience, expertise and professional accounting qualifications of the independent probity adviser will add value to the client and will enhance the tendering process. The relevant experience is something that comes with time and exposure to relevant probity issues through other audit or advisory tasks. An experienced and qualified probity adviser will also display:

  • sound and mature judgement
  • an understanding of procurement processes, policies and guidelines
  • thorough knowledge of audit concepts
  • the highest standards of integrity
  • an enquiring mind
  • an ability to take a stand on an issue and resist pressure to change a well-supported opinion
  • the ability to be an active but independent member of a project team.

Probity in the private sector

As the private sector becomes more familiar with probity and understands the benefits to be gained from an external review process, the more likely it will become a fundamental part of private sector governance processes when tendering for and negotiating contracts.

About the author

Kevin Donnelly
Perth, Australia

Kevin is a principal at Stantons International, the Perth member firm of Russell Bedford International. He is responsible for probity and procurement, and training and development within the probity and contracting areas of specialisation.

He is an experienced public speaker, trainer and consultant who has undertaken consultancy and training tasks throughout Australia, South-East Asia and the Pacific region. He has also been a presenter of professional papers on outsourcing, contract management, and governance of the procurement function at conferences in Singapore, Hong Kong, Kuala Lumpur, Bangkok and Hoi Ann in Vietnam.

Author: Kevin Donnelly - Stantons International, Perth, Australia

The Russell Bedford website employs cookies to improve your user experience. We have updated our cookie policy to reflect changes in the law on cookies and tracking technologies used on websites. If you continue on this website, you will be providing your consent to our use of cookies.

Find out more
I accept