The ACT’s corruption watchdog is considering an investigation into the tender process for the multi-million-dollar Campbell Primary School Modernisation Project. It is calling on the construction industry to come forward with any suspicions of improper conduct in the awarding of government contracts.
A damning audit report tabled in the Legislative Assembly on 22 December last year found that the procurement process lacked probity and that the ACT Education Directorate did not deal with the tenderers fairly, impartially and consistently.
The ACT Integrity Commission says that the significant shortcomings identified by the Auditor-General warrant an examination of the evidence to consider whether an investigation is justified.
It says the problems uncovered by the Auditor-General raise the question of whether other procurement processes have been affected in similar ways, and Integrity Commissioner Michael Adams is urging design, building and construction businesses to report their suspicions to the Commission.
“Businesses which have tendered for government contracts are encouraged to contact the Commission where they reasonably suspect corrupt conduct has occurred, or is occurring, in government procurement or in relation to any aspect of the ACT public sector’s operations with which they have been involved. We want to hear from you,” he said.
Despite Canberra firm Manteena being selected in 2020 as the preferred tender, the contract went to multinational Lendlease after the weighted evaluation criteria used in government tenders were in effect re-weighted and re-prioritised.
The Commission said the Auditor-General highlighted repeated departures from consistent recommendations of the tender evaluation teams about the superior bid, resulting in another, otherwise unsuccessful tenderer being offered the contract.
The Auditor-General also found that the overall process did not comply with proper practices and gave rise to unidentified conflicts of interest and communications with tenderers that were not appropriate, controlled or adequately documented.
As the delegate, the Acting Executive Group Manager, Business Services Division (Education Directorate) overruled the Tender Evaluation Team’s recommendation and instead recommended to the Education Directorate Director-General that Lendlease be named the preferred tenderer because it offered the “best value for money”.
But the Commission said the Auditor-General found the recommendation lacked adequate explanation, was not based on the evaluation criteria on which tenders were sought, nor on the professional advice of the tender evaluation teams.
The Auditor-General also found that Manteena was placed under unfair pressure to acquire its design for a sum significantly less than its actual value.
Five of the report’s six recommendations were directed at Major Projects Canberra, but it did not respond to the Auditor-General.
The Acting Executive Group Manager, Business Services Division (Education Directorate) acknowledged the shortcomings and supported the recommendations.
Master Builders ACT CEO Michael Hopkins said today’s audit report findings were concerning.
“The ACT building and construction industry deserves to have the utmost confidence in the ACT Government tender review process. Any company tendering for ACT Government work should do so on level a playing field,” he said.
Canberra Liberals Leader Elizabeth Lee called on the government to come clean to the community about the “suspected improper conduct in ACT government procurement processes”.
Ms Lee said the government must respond to the audit report.
“The matters raised in the report are serious enough for the Integrity Commission to put out a call to businesses in the building and construction industry to come forward with information relating to suspected improper conduct in ACT Government procurement processes,” she said.
“It is essential that government treats all procurement processes impartially and are transparent when it comes to spending taxpayers’ money.
An ACT Government spokesperson said the government was unable to comment at this stage on any potential improper conduct on its projects.
The spokesperson said the government and relevant Directorates and Agencies had worked constructively with the Auditor-General and the ACT Audit Office throughout the performance audit and would work with the Integrity Commission if an investigation is undertaken.
The government broadly welcomed the Auditor-General’s recommendations and was still developing a formal response, the spokesperson said.
In the meantime, the government would continue to monitor and enhance the Procurement Framework as appropriate.
The spokesperson said procurement training was available to all ACT Government employees, as well as an enhanced program for compliance.
In January 2021, a Probity in Procurement Guide was published, and further updated guidance on risk management, value for money considerations, calculating whole of life costs and conflicts of interests was released last month.
A procedure for handling supplier complaints had also been set up, the spokesperson said.
“The ACT Government is committed to making any further necessary improvements to ensure public confidence in future procurement processes,” the spokesperson said.