Discussion Paper on Tendering for the consideration of the AACC Confidential : for Board Members Only
Peter Carey has asked me to put forward for discussion my views on AACC tendering for various projects as they present themselves. Having been involved in the Ethics Committee of the AACC for many years now I am only too happy to offer some comments on the tendering process as it relates to our organization and also what I perceive to be pitfalls in the process. My comments are of a general nature only and I do not pretend to have the depth of understanding that your committee clearly has. I have no knowledge of any specific tendering projects that you may have in mind. The constitution, rules and regulation appear to be silent on the issue as to whether the AACC can get involved in commercial ventures. It is clear however that the board has a responsibility to act with due diligence and prudent risk management. This means that should the board choose to go down the path of any commercial venture it would have to present a very good argument for doing so and would need to be clear that it had a strong mandate from its members. The paramount question at all times is whether it is acting in the members best interests. The problem with the AACC in this regard is that it has a very wide and varied group of members. Herein lies the first issue for you to ponder. Will your members as a group benefit from the tendering process or is it likely that only a few members would reap any reward. To take this one step further. Are any of your members likely to be disadvantaged by you tendering for various projects. I can imagine a great many situations in which you may tender against fellow members. I can also envisage many situations in which the tender is simply too big for any one member to tender for. In this case you would certainly be offering a service to a group of members by being able to bring them together and in one sense act as their broker. The question then becomes how will you select members to be part of the process. If you invite them to “tender for a tender” the process is likely to be very slow ,cumbersome and expensive. I can also envisage a very strong backlash by large corporate organization who would be tendering against you. It is quite probable that they would prevent their staff from being members of the AACC alleging conflict of interest. The second point I believe the board needs to consider is whether it has the resources, time and money to be involved in such an initiative. We have always been a voluntary organization this concept is talking us into new and unchartered waters, does our board have the time or expertise to be involved at this level. Can we indeed afford paid staff to run with this concepts. The AACC has over the years enjoyed and earned a very good reputation with a variety of government organizations. We need to consider whether tendering will enhance or
destroy that reputation. I am of the view that approached in the right way we can enhance the reputation of our members as being truly professional. The downside of this however is that this really is a case of one bad apple destroying the whole barrel. Are we then also liable for the negligence of our members acts. I suspect that we will be. And what of the ethical issues. Here I believe the AACC needs to be extremely careful that it is not tendering for projects to which it has “insider information”. For example should CICA create a tender it would be very difficult to argue that the AACC as a member did not have extra information or that it might be favored. It would seem that the alternatives under this sort of conflict would be to declare the interest to the CICA board, do nothing or create a broking company legally separate from the AACC but owned by the directors ( now we are talking about liability and cost). Unfortunately what this might mean is that AACC members to such groups would be precluded from applying or having a role in the tender but that really is no different than it stands today. Recommendations before implementation: 1. Full and frank discussion at board level 2. Undertake a risk management process specific to tendering 3. Seek specific legal advice on the issues of constitutional problems and general liability ( part of risk management) 4. Put it to the members for a clear mandate
Points for discussion: In discussing this matter with Peter Carey the following points have been raised and put into a SWOT analysis. I believe that these need to be discussed fully before proceeding to any of the above recommendations. Please feel free to add your own for consideration at the meeting this weekend. Strengths o Strong reputation in the career field and insight into the direction of careers development within Australia o Quick access to experts in various fields of career counseling etc o Ethical with registered members and continuous professional development o Able to respond quickly and access providers on various expertise lists o Enthusiastic, committed members o Able to maintain strong alliances in other Not for Profit Groups o Adequate insurance – ( would it increase if we became more commercial) Weaknesses o Limited exposure to the commercial world
o Few paid staff – reliant on goodwill of volunteers o Questionable whether the commercial world would want to work with a not for profit o Limited in resources o Can we be price competitive? Opportunities o o o o o o o Increase our and our members profiles Create extra revenue stream Increase awareness of career issues Employ extra staff that can be used in other areas Provide members with paid work Possibility of strong strategic alliances with industry and governments Window of opportunity to gain strong profile with government
Threats o Possibility of losing members o Difficulty in controlling quality o Diverting limited resources away from other members needs
The above paper does not address the issue of joint ventures which I see as being quite different from a tendering process. In a joint venture both parties come with well defined aims and objective and a skill based that each will benefit and rely on. I would suggest that the board deal with the issue of joint ventures separately and focus firstly on the issue of tendering first.
Regards Rod Wenham Sept 2005