The Federal Government has unveiled a new draft code of conduct for suppliers.

The proposed code covers any entity seeking part of the government’s $80 billion in annual contracts. 

It is awaiting endorsement by Finance Minister Katy Gallagher, could be implemented as early as April.

The draft stipulates that suppliers, including their personnel and subcontractors, must align with the values of the Australian Public Service. This includes adhering to heightened obligations related to bullying and gender abuse. 

The Finance Department is currently inviting feedback on these impending regulations.

Primarily impacting sectors like technology, military, real estate, and care, the code mandates suppliers to actively prevent and address any breaches. 

This involves ongoing monitoring to ensure adherence among employees, agents, and subcontractors.

A significant shift from previous rules that focused on the ethical behaviour of contracting agencies, the new code now demands suppliers demonstrate compliance with “ethics, governance and accountability” expectations.

This overhaul follows a Senate committee review into consulting practices, triggered by PwC’s confidential information breaches regarding new multinational tax laws. 

In response, a clause considering a bidder's past ethical conduct was introduced, profoundly affecting PwC’s federal operations and leading to the creation of Scyne.

In light of the establishment of the National Anti-Corruption Commission and increasing focus on supply chain integrity, suppliers must now disclose and manage any conflicts of interest. 

They are also required to protect confidential information and avoid actions detrimental to the government or others.

The code will be enforceable through legal clauses in procurement contracts, allowing for termination in case of breaches. This means companies failing to meet ethical standards could face bans from future government work.

“The Commonwealth expects its suppliers to conduct themselves with high standards of ethics such that they consistently act with integrity and accountability,” the draft code states. 

It emphasises honesty, integrity, probity, diligence, and fairness as key components of ethical conduct.

While the code initially applies to new contracts, there is potential for its incorporation into existing agreements through negotiations. 

This move mirrors a broader shift to enhance data protection and modernise federal procurement practices, aiming to transform procurement from a mere purchasing function to strategic supply management.

In a parallel development, the establishment of Australian Government Consulting aims to refine the government’s consumption of advisory services and impose stricter terms for consulting contracts. 

This initiative follows the government's decision to limit the use of external consultants for core public service policy and cabinet proposals.