Following reporting in relation to the matter of the independent probity audit into the department’s awarding of the Alice Springs town camp tenancy management contracts in 2015, the Department of Housing and Community Development has released the full report by the independent probity auditor in the interests of transparency. Only the names of employees and other persons mentioned in the report have been removed for privacy reasons.

The Chief Executive Officer as an accountable officer has broad considerations to make in terms of releasing such a report, including freedom of information, duty of care to staff, and commercial in confidence matters. The CEO has needed to seek various consents from third parties prior to releasing the full report.

INFORMATION CONTAINED IN FULL PROBITY AUDIT REPORT

The full report contains further detail of the findings in the already-published executive summary, namely that “no evidence was found of direct or indirect external interference in the department’s tender assessment and award process.”

The key findings state that the department “complied with the majority of requirements in the procurement process”, with “some exceptions” where recommendations have been made to “enhance the department’s procurement processes”.

The department would like to highlight Attachment B of the report – Compliance with Procurement Direction PR4: Procurement Process for Tier 4 activity, which details the auditor’s assessment of elements of the procurement process.

VALUE FOR MONEY ASSESSMENT

In the interest of full disclosure and understanding of the department’s decision to award the contract to Zodiac on the basis of Value for Money, the department has now decided to publish the tender prices of Zodiac and CAAHC to assist understanding of the highest value for money score being awarded to Zodiac and clarify recent reporting about the value of the tender awarded being $1.8 million:

Zodiac - $702 000 (for the 16 month contract period)

CAAHC - $1 522 000 per annum (ie $2 029 000 for the 16 month contract period)

Tender estimate - $977 333

While it is acknowledged price is not the only component in assessing value for money, the price submitted by CAAHC was 108% more than the tender estimate, compared to Zodiac’s price of 28% lower than the estimate. 

LATE SUBMISSION BY ZODIAC

In July 2014, responsibility for dealing with late tenders was devolved to NTG departments as part of a package of government procurement reforms. The tender from Zodiac was received 57 seconds after the stated lodgement date and time and was therefore deemed late. Zodiac appealed this decision in accordance with the Conditions of Tendering on the grounds its tender had been delayed during the lodgement process. The department considered the appeal and allowed the late tender to be accepted. 

DISCIPLINARY ACTION

Part of the independent auditor’s terms of reference was to “determine the appropriateness of any further action that may be undertaken by this department”. The report made no recommendation for disciplinary action to be taken against any staff.

RESPONSE TO REPORT RECOMMENDATIONS

As previously stated, department CEO Jamie Chalker has accepted the recommendations of the audit in full.

The department has already implemented a number of changes including an organisation restructure that strengthens the independence of the Chief Procurement Officer role, and is fostering a more collaborative approach between the procurement function and program areas to improve the way the department plans and designs its tender processes.

The department has established a new Executive Management Board tasked with oversight of the department’s corporate governance, of which the Chief Procurement Officer is a member, to ensure a strong focus on procurement compliance, performance and risk mitigation and to oversee the development of a new procurement model and governance framework.

Ongoing procurement awareness training will be conducted across the department in coming months – both targeted training for officers involved in procurement matters, and general awareness training for all staff. Ongoing training and professional development in procurement will be embedded in employee personal development plans and performance agreements.

MATTER REFERRED TO AUDITOR GENERAL

The department has received the request from the Auditor General and the CEO has given an undertaking that the department will comply in full, and welcomes further independent assessment of the process.

It is hoped that by releasing the full report any remaining questions or concerns from interested parties will be satisfied.