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ACT government issues $300 million contract with no tender or EOI process

By Elizabeth Lee MLA - 20 June 2017 12

In the latest in an ever growing list of questionable deals by the ACT government, it’s been revealed that a $300 million contract was awarded to ActewAGL for ICT help desk, HR services and accounts payable without a tender or expression of interest process.

Estimates Hearings are an important process with the function of scrutinising decisions by the government of the day on how it intends to raise and spend money. Ministers and senior government officials are brought before the Estimates Committee to answer questions about the expenditure, performance and effectiveness of their directorates.

Now, having only had a brief sojourn in the Commonwealth public service many years ago, I came into the Assembly unfamiliar with the process. Being in Opposition means that I need to get across it quick because it’s an important function of keeping the government to account.

Although I’m not on the Estimates Committee (this year it’s comprised of two Liberals – Alistair Coe and Andrew Wall; two Labor – Bec Cody and Michael Pettersson; and one Green – Caroline Le Couteur), it is hard not to pay attention to what’s happening in the building.

As a newbie, I’m still learning the ropes but from what I can see, at the heart of the Estimates Hearings process is accountability and transparency of government decisions that affect all of us.

So when we find out from these Estimates Hearings that Icon Water, which is under the Chief Minister’s responsibility, awarded a contract worth $300 million without a tender process or calling for expressions of interest, it raises a few questions.

The fact that Icon Water chose not to use the government’s own in-house Shared Services Provider is questionable enough (after all, what is the point of this service if not for this exact type of process)?

Why does Icon Water think it is above using this service when other government directorates do so? And why did the Chief Minister allow this happen on his watch?

Has Icon Water done this before?

Have any other directorates done this?

How many more millions of dollars of taxpayer money are we talking about?

In a speech in parliament in February this year outlining the ‘achievements’ of the first 100 days of this term, the Chief Minister stated that “Canberrans want to know the government is listening to and working for them. Our debates in this place will have the interests of all Canberrans at their heart”.

Where are the interests of the Canberrans who are footing the bill through whopping rates increases for decisions made by this government?

Where are the interests of the Canberrans who have a right to know, question and understand a decision made by this government that we now find out has not been properly scrutinised; with no transparent process and may never have come to light if it were not for the Estimates Hearings process?

This is from a government that is yet to explain deals like the $4 million purchase of the CFMEU headquarters in Dickson only to lease it back for $1 per year; or the $4.2 million purchase of a Glebe Park block even though it was valued at less than $1 million.

In his Budget Reply speech, Canberra Liberals leader Alistair Coe called on the government to explain; to provide a full and frank disclosure of these decisions because Canberrans have a right to know why their money is funding these questionable deals.

Mr Coe also outlined six integrity measures to bring about the transparency and accountability to decisions that this government so desperately needs:

  1. A Public Works Committee – to safeguard the ACT against recurring problems with infrastructure projects;
  2. Giving more options to whistleblowers – making it easier for public servants to call out actual or suspected wrongdoing;
  3. Monitoring department audits – allowing Assembly Committees to receive twice yearly progress reports on audit activities of ACT government agencies;
  4. Improving the unsolicited proposals process – to give more clarity in legislation with regard to timelines and IP protection;
  5. Broadening the invoice register – making the Government publish a list of all payments made by the Government that are over $12,500; and
  6. Reporting land acquisitions – to ensure that all land acquisitions are reported to the Assembly Public Accounts Committee. The details would include the value, the reason for the purchase, the purchase method and information about the vendor.

The revelation of this $300 million contract without an open tender process is, sadly, as outrageous as it is unsurprising.

The government has many, many questions to answer. The Estimates Hearings process will go some way to weeding out some of these questionable government decisions but who knows how many more remain unanswered with Canberrans paying the price.

What’s Your opinion?


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12 Responses to
ACT government issues $300 million contract with no tender or EOI process
web_guy 11:51 am 30 Jun 17

It’s going to be tough going for many more local businesses now that cleaning contracts in all ACT public schools have been stripped from local, loyal firms and awarded to large multi-national companies. The ACT government doesn’t place much value on it’s own people. Previous contractors were given less than 24 hours to get their equipment out of schools.

JC 9:34 pm 23 Jun 17

chewy14 said :

The author does realise that Icon Water is not a government directorate right?
And that the “government” didn’t make this decision, either good or bad?

I didn’t think a Liberal member would be promoting what seems to be a position that advocates bigger, centralised government and services with more regulation.

Interesting….

Not to mention that Icon Water is 50% shareholder in ACTEWAGL and that they share a common billing and IT platform because the electric side of ACTEWAGL and Icon prior to 2000 were the same company, ACTEW. Certainly think when viewed in true context this ‘deal’ is no where near as questionable as it may seem, seems more like an internal accounting than any form of corruption.

wildturkeycanoe 4:27 pm 23 Jun 17

This is further proof our government at both Federal and State levels are completely out of touch with reality, completely self-serving and have no accountability to the voting public. They are so high they have become untouchable. Who can take action against them? Who has the power, or even the guts, to stand up to this kind of corruption? We look at some overseas dictatorships and wonder how they got such a firm stranglehold on the country, but all the while it is happening right under our own noses, albeit very deviously. If ever in the history of our country we needed an uprising, to overthrow these rich politicians and their mates, now is the time. Oh, great! Now I’ve said that I’m going to have hired goons knocking on my door and hauling me off to some secret facility for “conditioning”. Can’t have people with free speech using their rights to demand transparency in government, can we?

ChrisinTurner 3:47 pm 23 Jun 17

I wonder if they did due diligence on the ACTEWAGL accounts payable. My last 12 months with ACTEWAGL has been a mess of mistakes and reversals to such an extent that I have changed to Origin.

chewy14 11:45 am 23 Jun 17

The author does realise that Icon Water is not a government directorate right?
And that the “government” didn’t make this decision, either good or bad?

I didn’t think a Liberal member would be promoting what seems to be a position that advocates bigger, centralised government and services with more regulation.

Interesting….

Elizabeth Lee MLA 9:45 am 23 Jun 17

CanberraStreets said :

When is the Estimates Hansard due out? This sounds fascinating

You can find the link to Hansard here: http://www.hansard.act.gov.au/hansard/2017/comms/default.htm#estimates

The transcript is usually available a few days after the hearing.

You can also live stream the proceedings: http://aod.parliament.act.gov.au and clicking on the ‘Committees’ tab

JS9 9:42 am 23 Jun 17

This is nowhere near as simple as made out in the opening post. My understanding is there is plenty more to this contract then simply ‘shared services’ in the traditional sense of the word.

I’d like to know for instance what part of Shared Services has the ability to deliver regulatory affairs and economic regulation advice to Icon Water? That service alone would form a sizeable chunk of the contract I’d expect – and it clearly would not be appropriate for such advice to come from within Government, given the purposes and reasons for independent economic regulation…

One should also not forget that Icon Water is not a Government Directorate. It is Government Owned Entity yes, but it is a Territory Owned Corporation, not a Directorate. Icon Water has an independent board, with decision making powers and broader requirements under the TOC Act and broader Corporations Law. There is no written direction from Government in this space – to suggest the decision is ‘a decision made by the Government’ therefore is absolute nonsense.

Does it all smell fishy? Perhaps. Is there probably a reasonable justification to it if it is demonstrated it is reasonable value for money (who knows if that is the case) – probably.

The irony here is if the contract was placed with Shared Services, the same voices would probably be whining that it wasn’t put out to market either….

devils_advocate 9:00 am 23 Jun 17

What in the actual hell. At the commonwealth, any procurement above $80k has to be sourced competitively, usually by getting the magic “three quotes”. With few exceptions, most would expect anything over half a mil to go to the open market. This beggars belief.

dungfungus 5:54 pm 22 Jun 17

dungfungus said :

First it is stated that ActewAGL were awarded the $300 million contract but then Icon Water is nominated (as if to muddy the waters?)

ActewAGL have reported in their latest capital planning release that they are to undertake “customer initiated” construction of two 11 kV traction power stations and depot /control centre for “Capital Metro Light Rail”. No cost is given but this is major work and would be in the tens of millions of dollars if not hundreds of millions.

Perhaps this is a way of taking a significant expenditure for the light rail “off balance sheet”? This would also explain why no tender details were issued.

I mean $300 million would buy a lot of ICT help desk, HR services and accounts payable.

Then, it could be a way of injecting cash into the corporation as a consequence of suggestions made in this report: http://www.canberratimes.com.au/act-news/actew-corp-debt-to-hit-22-billion-20140608-zs16j.html which names Brendan Smyth as the main protagonist against the government.

It seems strange that there was no further reporting of this story and what did happen to Brendan?

I heard on ABC 666 Radio today that the “high profile” Brendan Smyth, ACT Commissioner for International Engagements, has jetted off to Singapore with the Chief Minister to watch a Super Rugby team that sometimes funded and domiciled in the ACT, play.

CanberraStreets 8:06 pm 21 Jun 17

When is the Estimates Hansard due out? This sounds fascinating.

I hope you are planning on using the Assembly Question Time to follow up on the other queries you have raised.

dungfungus 11:28 pm 20 Jun 17

First it is stated that ActewAGL were awarded the $300 million contract but then Icon Water is nominated (as if to muddy the waters?)

ActewAGL have reported in their latest capital planning release that they are to undertake “customer initiated” construction of two 11 kV traction power stations and depot /control centre for “Capital Metro Light Rail”. No cost is given but this is major work and would be in the tens of millions of dollars if not hundreds of millions.

Perhaps this is a way of taking a significant expenditure for the light rail “off balance sheet”? This would also explain why no tender details were issued.

I mean $300 million would buy a lot of ICT help desk, HR services and accounts payable.

Then, it could be a way of injecting cash into the corporation as a consequence of suggestions made in this report: http://www.canberratimes.com.au/act-news/actew-corp-debt-to-hit-22-billion-20140608-zs16j.html which names Brendan Smyth as the main protagonist against the government.

It seems strange that there was no further reporting of this story and what did happen to Brendan?

PJPentony 6:51 pm 20 Jun 17

All the commitees play an important role in keeping the Government of the day to account. Unfortunately I don’t think many people pay much attention, and that leads to a government that believes it can do what ever it wants. The deal at the Tradies in Dickson is staggering, I can’t imagine any other government getting away with such deals.

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