C.5 The COI test

This three-question test determines whether a COI exists and whether further risk assessment or immediate remedial action is required. The test aims to establish whether the interests of government and the competitive process could be compromised by this event.

• Might the advisor's other duties result in the advisor compromising their obligation to government (i.e. conflict of duty)?

When an advisor to a project is also a director or holds another position in a company that stands to gain from that project, the advisor is not able to fulfil their obligation to government on the project without compromising their duty as a director to the company and vice versa.

For example, an advisor who earns a substantial fee advising a department in developing the procurement strategy for a major project is discovered to be on the board of a private company which actively campaigns for more private sector involvement in that particular project.

• Does the advisor have the ability to compromise their obligation to government by accessing information that may benefit the advisor or other parties?

The Project Director considers whether the advisor has access to commercially sensitive information or other information that, if transferred, could benefit the advisor or other parties, e.g. pricing and costing details, evaluation methodology and preferred negotiation positions, commercial principles or preferred risk allocations.

For example, an advisor engaged by a department to develop the Public Sector Comparator for a procurement project could be considered to have more access to commercially sensitive information that would benefit the advisor or other parties than an advisor engaged to develop the environmental impact study to be made available to all bidders for a procurement project.

• Does the advisor have the ability to compromise the interests of government and their obligation to it by potentially influencing or altering the outcome to government in a material way that will benefit the advisor or other parties?

The Project Director considers the role of the advisor and their scope materially to influence the outcome in a way that would directly benefit the advisor or other interests. This includes whether the advisor holds any position or provides advice that will lead to the selection of the successful bidder or other project outcomes that could have a material impact.

For example, an advisor who has another interest with a bidding party is engaged by a department to perform the value-for-money evaluation for a procurement project. That advisor could be considered to have a greater ability to potentially influence the final outcome than another advisor engaged to complete a limited modelling assignment on the same project.