Australia’s procurement rules are tightening around supplier conduct. No longer can government agencies rely on periodic ethical declarations or voluntary undertakings from contractors.
A new requirement – embedded in standard contracts across procurement by the Australian government – forces suppliers to disclose damaging court findings, regulatory sanctions, and professional disciplinary action as soon as they occur, giving government an immediate opportunity to demand remediation or walk away.
The shift marks a reckoning with what PwC’s 2015–2023 tax leak scandal exposed: that a major consulting firm could turn confidential government tax plans into a commercial asset, and that existing safeguards were not built for a world where such firms are embedded in the machinery of government.
A Procurement Policy Note issued in January 2025 (and updated in December) reinforces existing rules requiring procurement officials to assess supplier ethics and prior performance when determining value for money. More substantively, it introduces Notification of Significant Event clauses into standard contract templates and panel arrangements, creating real-time disclosure obligations where none previously existed.
Under the new clauses, suppliers must immediately notify contracting entities of adverse findings by courts, commissions, tribunals, or professional bodies regarding their conduct or capacity, or any matters that may adversely impact the government’s compliance or reputation. The government can request additional information within three business days, demand a remediation plan within ten business days, and terminate contracts where responses prove inadequate. Failure to comply constitutes material breach.
The message to agencies is explicit: procurement decisions carry ethical responsibility, and supplier reputation and behaviour can no longer be ignored.
The policy note states that the government expects all suppliers to abide by the highest ethical standard, emphasising that accountable authorities bear responsibility for procurement decisions and must consider “whether the reputation and behaviour of tenderers needs to be factored into the procurement process.”
The policy note arrives as the Senate Finance and Public Administration Legislation Committee examines more aggressive measures. The Public Governance, Performance and Accountability Amendment (Ban Unethical Contractors) Bill 2025, introduced by Greens Senator Barbara Pocock in September, would create a formal debarment regime allowing government to exclude suppliers engaged in “unethical conduct” for up to five years and establish a public register of excluded suppliers.
Submissions to the inquiry closed 12 December 2025, with a final report due 17 March 2026. The bill targets a gap exposed by the PwC tax leak scandal: at present, the government has no clear legislative power to ban firms that monetise confidential government information.
PwC aftermath shapes current reforms
Between 2015 and 2020, PwC systematically leaked Treasury briefings on multinational tax avoidance measures to partners and staff across multiple jurisdictions, using the intelligence to secure business. CEO Tom Seymour resigned in May 2023. The Tax Practitioners Board terminated Seymour’s registration in September 2025, finding “a business culture of sharing of confidential information, often referred to as ‘intelligence’, within PwC that was widespread within the Tax and Legal Services division.”
The government could not impose a formal ban. Instead, it negotiated a voluntary arrangement under which PwC ceased bidding for new government work from April 2024. That arrangement ended 15 July 2025 after the Department of Finance completed an examination of PwC’s ethical soundness, determining the firm had “implemented and/or revised its policies and process to meet the ethical standards of governance, culture, and accountability.”
The decision prompted renewed calls for legislative action. “The Greens want to close the legal loophole that allows contractors who behave unethically to get away with it,” Senator Pocock said. “It’s unacceptable that the Government must rely on the wrongdoer to agree to ban itself from undertaking future government contracts.”
The bill faces significant criticism. Finance submitted that the definition of “unethical conduct” is “ambiguous”, extending beyond legal convictions to “grayer areas like poor labor practices”, which “could increase the risk of litigation” from contractors who are debarred and may be inconsistent with Australia’s international obligations. The Department urged more consultation before proceeding.
Existing frameworks strengthen
The current reforms build on measures introduced following the PwC scandal. The Commonwealth Supplier Code of Conduct, mandatory from 1 July 2024, establishes minimum expectations covering conflicts of interest, confidential information protection, corporate governance, workplace health and safety, and environmental sustainability. The code places a “positive duty” on suppliers to proactively prevent and discourage breaches – failure may result in remediation requirements or termination. Revised Commonwealth Procurement Rules effective last November explicitly require officials to consider “ethical conduct” when assessing value for money alongside price, quality, and performance history. Officials may exclude suppliers for bankruptcy, insolvency, false declarations, or significant deficiencies in performance of any substantive requirement or obligation under a prior contract.
The rules prohibit agencies from benefiting from “dishonest, unethical or unsafe supplier practices” including tax avoidance, fraud, corruption, exploitation, unmanaged conflicts of interest, and modern slavery. Officials must make “reasonable enquiries” regarding labour regulations, workplace health and safety, and environmental impacts.
International comparisons reveal design options
Australia’s incremental approach contrasts with more comprehensive regimes elsewhere.
Western Australia implemented debarment regulations in January 2022 under the Procurement Act 2020, empowering Finance to exclude companies for breaching corporate, criminal, consumer, environmental, and workplace health and safety legislation.
The UK’s Procurement Act 2023, in force from February 2025, creates a public debarment regime with mandatory bans for serious offences like fraud and bribery, and discretionary bans for misconduct and contract breaches. Suppliers can stay off or get off the list through “self‑cleaning” – demonstrating reform via management changes, training, or compensation.
Canada operates a federal Integrity Regime with mandatory and discretionary exclusions but maintains no central public debarment list. The United States runs a decentralised system through the Federal Acquisition Regulation, with each agency appointing a Suspension and Debarment Official.
Senator Pocock argues Australia should follow these precedents. “Numerous jurisdictions around the world already have debarment laws, including Western Australia, Canada, the UK and the US. So why don’t we?”
What it means for regulators and suppliers
The policy settings create immediate operational implications. Australian government entities must now integrate ethical conduct assessment into value-for-money frameworks, documenting how supplier behaviour, reputation, and performance history inform procurement decisions. Due diligence must be proportionate to scale, scope, and risk, including verification that suppliers meet labour regulations, workplace health and safety standards, and environmental requirements.
Entities must incorporate Notification of Significant Event clauses into new contracts and panel arrangements, establishing monitoring mechanisms throughout contract lifecycles. They must respond to significant events by requesting additional information and remediation plans, and exercising termination rights where supplier responses prove inadequate.
For suppliers, the regime demands proactive ethics governance, including robust conflict-of-interest management, confidentiality protections, and compliance monitoring systems meeting Commonwealth Supplier Code standards. Immediate disclosure obligations apply when adverse findings arise, supported by documented remediation demonstrating seriousness and preventive measures. Track record matters, as officials must assess prior conduct when evaluating tenders.
The uncertainty centres on definitions. What constitutes “unethical conduct” beyond criminal convictions? How will “significant deficiencies in performance” be measured? When does reputational impact warrant exclusion?
Finance’s concern that ambiguous definitions “could increase the risk of litigation from contractors who are debarred” reflects real implementation challenges. Experience from other jurisdictions suggests clarity is essential: the UK’s Procurement Act provides detailed mandatory and discretionary grounds, self-cleaning criteria, and appeal mechanisms. Western Australia’s regime specifies grounds across legislative domains.
Design choices and enforcement capability
The tension between the policy note and the proposed legislation reveals competing theories of procurement regulation. The Finance approach relies on enhanced monitoring, contractual accountability, and official judgement within existing frameworks. The Greens’ bill seeks bright-line exclusions (clear, automatic bans triggered by specific offences), public registers, and predetermined consequences.
Each carries risks. Discretionary systems depend on capability, consistency, and willingness to act – qualities that failed in the PwC case until public pressure forced response. Bright-line systems risk capturing conduct that doesn’t warrant exclusion or creating perverse incentives to hide problems rather than remediate them. The UK’s self-cleaning provisions attempt to thread this needle by creating pathways back for suppliers who demonstrably reform.
Australia’s incremental approach – strengthening existing rules and contractual oversight before legislating formal debarment – may allow refinement of definitions and processes through practice. The risk is that it perpetuates the gap that enabled PwC’s conduct to persist without meaningful sanction.
The tension between the policy note and the proposed legislation reveals competing theories of procurement regulation.
The National Anti-Corruption Commission has identified procurement and the public-private interface as key corruption domains. The Commission can investigate contractors whose conduct may affect the honest or impartial exercise of public officials’ powers, including those who aid or influence procurement officials to abuse their position. This creates a parallel accountability mechanism independent of departmental processes.
The broader challenge relates to capability. The 2024 Senate inquiry into consulting services emphasised that overreliance on consultants stops the public service from developing skills and knowledge in-house. Federal and state spending on Big Four consultants increased 400 per cent between 2013 and 2023. By 2023, total consultancy spending reached $20.8 billion annually.
This matters for enforcement: agencies lacking internal expertise struggle to assess whether external advice serves public or commercial interests. When officials cannot evaluate the quality of consultancy work, they cannot effectively monitor ethical conduct or identify conflicts.
The Australia Institute’s Bill Browne told the inquiry that “consulting firms charge through the roof for advice that is often simplistic, flawed or self-interested – or has been specifically commissioned to further the government’s preconceived agenda.”
Transparency International Australia’s Clancy Moore described the situation as “a damning indictment of the Commonwealth’s overreliance on consultancy firms over the last two terms of parliament, related integrity failings, and a lack of accountability.”
Notification of Significant Event clauses create real-time disclosure obligations where none previously existed.
The question before the Senate committee is not merely whether to ban unethical contractors, but how to design a system that prevents misconduct, detects breaches early, imposes proportionate consequences, and maintains the capability to do so consistently. The Notification of Significant Event clauses create an early-warning mechanism, but only if agencies possess the expertise to assess what constitutes a significant event and whether proposed remediation is adequate.
The answer will shape Commonwealth procurement for the next decade and signal whether Australia learned from the PwC scandal or merely applied administrative patches to structural failures. For now, the Department of Finance has tightened the contractual grip on supplier conduct. Whether that proves sufficient depends on factors the policy note cannot control: political will, bureaucratic capacity, and whether the next integrity failure surfaces before irreversible damage occurs.
