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Molloy, Mark --- "Government Contracts, Federal, State and Local by Nicholas Seddon" [2000] AltLawJl 39; (2000) 25(2) Alternative Law Journal 97


Government Contracts, Federal, State and Local

by Nicholas Seddon; Federation Press 1999 2nd edn; 342 pp; $85 hardcover.

This is the second edition of Nick Seddon's work, first published in 1995. The text focuses on legal issues peculiar to public sector contracting by all levels of government, including statutory corporations. It examines issues surrounding the use of contracts by governments and government authorities, the framework within which they contract, and the rights and remedies of the respective parties.

The second edition has been expanded to take account of recent developments in the law concerning government tendering and contracting and to cover new topics. In fact, some of the important recent developments were themselves the subject of discussion by Seddon in the first edition, so appropriate commentary and revisions have been included.

There is an extensive chapter on the use of contracts by governments, particularly in the context of recent developments; such developments involving a greater reliance on contracting out for the provision of services by and to government. In light of the increasing use of contract as a tool of public administration, Seddon examines whether there may be an erosion of both remedies for the citizen and public accountability, in an administrative law sense, because of the involvement of contracted private sector entities.

The second edition also includes a brief discussion of the framework provided by the World Trade Organisation Government Procurement Code. If Australia ever accedes to this regulatory code there will be significant changes to the tendering and contracting frame­ work for government agencies.

Seddon traces the sources of the power of public sector authorities to contract, whether this be by way of the executive power (as will be the case in the relation to Commonwealth and State governments) or by way of exercise of a statutory power (as will be the case with respect to statutory authorities, including local government authorities). He discusses, in detail, how government agencies enter into contracts. A new section has been added which considers agreements made in the context of a statutory framework; a method increasingly adopted in the delivery of government programs.

The second edition also provides a more comprehensive treatment of the nature and extent of Crown immunities and privileges (or the 'shield of the Crown') and how they can impact on the contractual relationship. This is par­ ticularly pertinent given the recent activity of the High Court in this area. An improvement on the first edition is that a separate chapter has been included on the doctrine of executive necessity and the rule against contractual fettering of a legislative discretion.

One of the areas which continues to receive extensive treatment is the potential application of the Trade Prac­ tices Act 1974 (Cth) and the various State and Territory Fair Trading Acts to government tendering and contracting processes. Seddon regards this is an issue of increasing importance at a time when governments at all levels expand their contracting activities. A major recent development in this area of the law has been the Federal Court decision in JS McMillan Pty Ltd v Common­ wealth (1997) 147 ALR 419 which held that the conduct of purely governmental or regulatory activity was not the 'carrying on of business' and, hence, not subject to the Trade Practices Act 1974. Although not an ideal result from his perspective, the development was nevertheless predicted in Seddon's first edition and discussion of the McMillan case is included in the new volume.

Importantly, for a text dealing with this area of the law, the book contains a significant section on the tender pro­ cess. As Seddon notes, this method of seeking and assessing offers remains the most common way in which major government contracting is initiated.

As with the first edition, there is substantial discussion about the nature of the tender process and the possible legal relationships and liabilities which it involves. Another major development in this area of the law (also predicted in the first edition) was the Federal Court decision in Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 146 ALR 1 (the Hughes case). In that case it was held that a particular request for tender gave rise to a 'process contract' between the government authority and the tenderers, independent of any subsequent decision to proceed to contract on the basis of the tenders them­ selves. This 'process contract' required the published tender process to be followed and included an implied term that tenderers would be treated fairly by the government entity. Again, the second edition includes updated discussion of the Hughes case.

Seddon's consideration of the tender process also deals with important considerations such as estoppel, negligence, misleading conduct, confidentiality and restitution.

Of benefit, both for the practitioner and those who work in government tendering units, is that advice is provided on the drafting of appropriate tender documentation. The salient point is that if a tender process is to give rise to legal obligations then the drafting of the associated documentation can be as important as the drafting of the contract itself. As with the first edition, Seddon closes with an analysis of the potential availability of administrative law remedies and the role of the Ombudsman.

Government Contracts, Federal, State and Local is an important aid to lawyers practising in the area of government contracting. The second edition continues to provided for a much needed consolidation and comprehensive treatment of the issues that are peculiar to this field. The revised work will be greatly appreciated by practitioners such as government sector commercial lawyers. It should also be considered as an indispensable aid to those relatively new to this field, particularly private sector firms which may be traditionally unfamiliar with the relevant concepts and principles. One final point is that the book benefits from the publisher's return to the more traditional textbook page size and layout. Readability has been significantly enhanced when compared with the first edition.


Mark Molloy is a Canberra lawyer

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