ICAC states that direct negotiations should be avoided unless they clearly fall within the government’s legislative and policy framework, and/or the risk of corrupt conduct has been managed in accordance with the guidelines recommended in the publication. Direct negotiations are exclusive dealings between an agency and an external party without first undergoing a competitive process. The Commission identifies government procurement as the most common area where direct negotiations can arise, with other areas including investment activity, delivery of government services, and joint ventures.
These guidelines, which are updated from the Commission’s 2006 direct negotiations report, include a set of criteria to apply for undertaking direct negotiations, such as exemption by statute or government policy, uniqueness and monopolies where it is beyond doubt that no other supplier or counterparty can meet the agency’s well-defined needs. The Commission also provides advice on avoiding the need for direct negotiations, such as through forward planning via the establishment and use of panels, avoiding lock-in, and bundling and unbundling contracts to encourage additional competition.