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Easy work over bang for buck in taxpayer cash splash

Australians aren't getting bang for their buck in government contracts under procurement systems that stifle competition and are geared towards making work easy for bureaucrats.

The Commonwealth's management of grants and procurement was scrutinised at a parliamentary inquiry, which is investigating how to improve integrity in the process.

The hearing on Friday was told the use of procurement panels, which feature groups of pre-selected suppliers pitching for contracts, were restricting rather than enhancing competition.

Auditor-General Grant Hehir said the issue of panels limiting competition and access to providers had been raised in previous performance audits.

"We see a lot of procurement where the process adopted seems to be for the ease of the agency rather than the benefit of the taxpayer," he said.

Public accounts and audit committee chair Julian Hill said large parts of the public service seemed to be using procurement panels to avoid paperwork and award contracts to preferred suppliers without competition.

The auditor-general accepted the Labor MP's suggestion that the public service lacked the culture of having an "arm wrestle" for the best deal or talking to other departments about what had been paid for similar services.

"A reasonable expectation would be that you assess what looks best value for money and then you undertake negotiation to see whether you can get better value for money," Mr Hehir said.

"We don't often see that."

Asked if it was appropriate for different government departments to talk to each other about what had previously been paid for a service, Mr Hehir noted the Commonwealth was a single legal entity.

Mr Hill said the committee could consider making a recommendation that procurement rules explicitly encouraged inter-departmental discussions where it could benefit commercial negotiations.

The auditor-general previously found a range of problems in a number of coalition government programs, including the $100 million sports grants scheme and $660 million commuter car park fund.

The hearing was told the infrastructure department didn't develop a proper set of guidelines of how the car park fund would operate.

When pressed, representatives from the department could not say if their agency knew the criteria the government was using to select car park sites from the fund, saying it was led by the former minister.

When asked if this process would not be used again, they said moving forward the department would have program guidelines in place which were transparent.