15 December 2022

Contract-less cleaning: more government procurement under the spotlight

| Lottie Twyford
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It seems the ACT Government’s procurement woes are not yet over, with the latest Auditor-General report blasting the awarding of cleaning contracts Photo: Michelle Kroll.

Concerns about procurement across the ACT Public Service are nothing new, and the latest Auditor-General report has once again found an arrangement between a government directorate and a cleaning company did not pass muster.

Auditor-General Michael Harris examined payments totalling $8 million from the Justice and Community Safety Directorate (JACS) to an unnamed cleaning company for cleaning services for Emergency Service Agency facilities across more than a decade.

Those services were deemed to have been provided, in many cases, without any contract or any evidence of an open and competitive tender process which meant there had been no scrutiny from the directorate over whether they represented value for money.

The company began providing general cleaning and ground maintenance services in the “early 2000s”, but there are no payment records before 2008, meaning Mr Harris could not determine how much was spent and for what services earlier than this. He further raised concerns about the lack of a contractual agreement.

While four contracts were signed between 2009 and 2018, the Audit Office could not find evidence they were “sufficiently open and competitive” to have complied with ACT law.

Auditor-General Michael Harris

ACT Auditor-General Michael Harris found many issues with the JACS cleaning contracts. Photo: File.

On Wednesday (14 December), Mr Harris provided an information report only to the ACT Legislative Assembly as his office had decided not to undertake a performance audit.

JACS had already engaged a new cleaning contractor and told the Audit Office it had improved its procurement processes since.

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Troubles with procurement – the official process of obtaining or purchasing goods or services – were blasted as “likely endemic” by the ACT’s Integrity Commissioner in March of this year.

And in November, Auditor-General Harris warned an annual reports hearing his upcoming reports would once again raise familiar themes, including a lack of expertise and practice, unawareness, naivety, and public servants and decision-makers not asking the right questions.

He told the same hearing he assumed issues were arising because smaller departments were not making major procurement decisions very often.

But larger directorates have also come under fire.

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In September this year, the Auditor-General took aim at the former Land Development Agency and the City Renewal Authority’s management of the Acton Waterfront project, saying the request for tender was poorly designed and did not represent value for money.

Late last year, the handling of the Campbell Primary School modernisation project by the Education Directorate and Major Projects was described by Mr Harris as lacking probity and being riddled with administrative and governance shortcomings which could have led to conflicts of interest.

The role of the government procurement board in the now well-publicised CIT contracts saga is also expected to feature in another of his upcoming reports.

At the same time, the multi-million-dollar jargon-filled contracts awarded to skills and complexity thinker Patrick Hollingworth remain before the Integrity Commission.

The latter is expected to take some time as the office is now reviewing more than a million documents and multiple contracts.

Skills Minister Chris Steel – who has argued he remains at arm’s length from any procurement decisions made by CIT – has nonetheless faced criticism from the Opposition.

Elizabeth Lee, MLA

Opposition Leader Elizabeth Lee has been pushing for an audit of all ACT Government decisions over the last five years. Photo: Michelle Kroll.

Canberra Liberals Leader Elizabeth Lee has tried, without success, to force the government to commit to an audit of every single procurement decision made over the last five years.

She’s accused the Labor-Greens government – which has been in power for more than two decades – of having fostered a “culture of secrecy” which formed the “core of the rot”.

An ACT Legislative Assembly inquiry also made recommendations from the government for how it could improve its procurement processes, including adding value-for-money assessments into every decision made.

That followed a previous report from the Auditor-General which determined that of 33 procurements undertaken by the government, none got everything right.

The government has commenced a review of Procurement ACT, which is being overseen by Mr Steel, who is also Special Minister of State.

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Meredith Robinson12:56 pm 16 Dec 22

Reading between the lines, is this a procurement issue or is this a clear case of poor Contract Management and/or Executive leadership.
Having been interested in the recent publicity regarding CIT’s extremely poor decision making and clear lack of accepting advice provided by ACT’s central procurement agency, it appears those incidents were a direct reflection of poor management and using executive powers to demand outcomes.
So many questions are raised, but to date, none have been answered.
• The contract for a skills and complexity thinker is still being investigated by the Integrity Commission. Whilst the Contract itself has been suspended, has any payments been made to date?
• THE CIT CEO continues to receive a salary, the A/g CIT CEO travels weekly to perform the required duties. Is this outcome good use of ACT Government funds? Should the CIT CEO have been stood down permanently?
• The CIT Board, who clearly were aware of these issues, are still in place. The current Chair of the Board was a Board member at the time. Should the members of the Board have been replaced to ensure integrity and transparency for CIT moving forward?
• Evidence provided highlighted that whilst the Chief Minister and the Minister denied any knowledge of the issues, this was untrue. When do they accept responsibility?
• Being cynical, it wouldn’t surprise me if the ACT Government makes payment to the CIT CEO so she leaves with another payment to the contracted organisation and then this whole problem goes away.
Now we have this issue with another Directorate for cleaning services.
Services provided and paid for, without any contract or evidence of an open and competitive tender process. This identifies that the procurement central agency had no involvement, and this has been managed internally by the Directorate. Maybe an audit of their outgoing payments from the year 2000 to date will uncover the who, what, where and why this has occurred. Interesting that now a contract is in place, and one assumed this was procured correctly, the Directorate has told the Audit Office it had improved its procurement processes. Well, then clearly, there is nothing to see here.
I disagree. Two (2) ACT Government areas under the spotlight for breaching regulations is hardly a nothing to see here.
The ACT’s Integrity Commissioner in March stated procurement issues appeared as “likely endemic”. I also note that in November, Auditor-General Harris stating his “upcoming reports would once again raise familiar themes, including a lack of expertise and practice, unawareness, naivety, and public servants and decision-makers not asking the right questions”.
The ACT public can believe that these issues occur only in smaller areas, but with this latest issue, clearly, this is incorrect. Noting Educations Campbell Primary School modernisation project and City Renewal Authoritys management of the Acton Waterfront project to name others.
The ACT Government has commenced a review of their central procurement agency, which Minister Steel is overseeing. Does he truly believe that this is where the problems lie? Or would a better option be to investigate how these multi million dollar contracts are managed?
Having worked in a similar central agency, it is so very easy to point blame there. Whilst the central agency would have provided guidance and support during the procurement process, how much of this guidance and support was accepted and implemented?

If the ACT Government, and Minister Steel were serious about improvement, they would mandate the central agency’s requirements rather than point fingers for a simplistic outcome.

Capital Retro10:36 am 16 Dec 22

This reminds me of the entire catering at a Canberra hospital being run by one extended family about 20 years ago.

William Newby6:21 pm 15 Dec 22

Convenient that Chris Steel will claim his arms length distance from pretty much ever dollar wasted. Take some responsibility, show some leadership, earn your keep!
This is a disgusting waste of our taxes and rates, no one is in charge, and no one takes responsibility, no one is ever accountable or sacked.
The ACT Gov are a hot bed of nepotism, friends and family employing each other.
The highest levels of incompetence, zero accountability, everyone still working from home (=doing zero work), or working one day a week in the new multimillion dollar office we built them.
I’d love to see some form of comparison but if be quietly confirmed we have one of the dearest and lowest performing administrations in all of Australia.
We need to start holding people to account for their incompetence or this will never change.
Drain the swamp!

“We need to start holding people to account for their incompetence”
That’s what the ballot box is or, but the ACT is a Labor/Greens town and nothing will change, except the amount of whinging from those that voted for them

Very convenient that Chris Steel will claim arms length distance from procurement undertaken (or not) by JACS and the ESA, who are both definitely, 110%, agencies in his portfolio.

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