2. Establishing the need for a consultant
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2. Establishing the need for a consultant

Table of Contents

Some basics

Busy managers often have little patience with advice that suggests careful planning and consideration at the outset. Their impatience is understandable. Experience, however, has shown that much time and effort can be saved over the course of a project if a few extra hours are invested at the beginning. Defining the problem, considering alternatives and drafting a clear statement of requirement are key factors in minimising potential problems.

Recourse to external consultancy services should, in normal circumstances, occur only after carrying out and documenting for file, a Business Case which addresses the following:

a clear exposition of the problem or issue being solved: both consultants and experienced public sector users of consultancy services stress that clarity of purpose is the key factor in a successful tender process;
relevance to Government policy or programs, including stakeholders;
scope and quality of outputs required;
the timeframe for completion;
whether the proposal was included in the agency’s Annual Procurement Plan;
likely GST-inclusive cost (fees and expenses) and availability of funding, including a 10 to 15 per cent contingency allowance, compared to benefits gained;
degree of any required skill transfer to the agency;
security considerations, including access to classified information;
the alternative of carrying out the work in-house; and,
how value for money will be achieved.

The Business Case should be approved by an appropriate official or delegate in the context of FMA Regulations 9, 10 and 12 which require documented approval on the basis that the proposed expenditure is in accordance with the policies of the Commonwealth and will make efficient and effective use of public money.

Whether an agency should engage external consultants will often depend on factors such as the following:

a temporary lack of in-house people resources;
the need for specialised skills or experience;
provision of independent advice, either to the agency itself, or to enhance public credibility;
diagnostic management advice to the agency, including facilitation or management of change;
a need for advice on how best to meet a new Government requirement; and,
assistance with a review of an agency’s service delivery as part of a Performance Improvement Cycle approach.

If unsure of your justification for proceeding with a consultancy, it is worth testing your reasoning with your agency’s procurement adviser or Legal Office.

Although the justification for hiring external consultancy services will differ according to individual circumstances, the golden rule is that the engagement should provide value for money. The concept of ‘value for money’ is presented in Chapter 4.

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