Page 2767 - Week 10 - Tuesday, 14 August 1990
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
financial viability of the contract is to be assessed by the Government and that, in any case, the financial viability will be assessed if doubt exists as to the tenderer's financial capacity.
Mr Acting Speaker, I submit that, given the statement of 20 March when it was clear that the R and G Shelley group were having troubles in their cash flow, and were having trouble in making their regular payments to subcontractors, it was reasonable for subcontractors in this town to take it that the assurance from the Government was not only that they would look at and investigate the viability of contractors for over $200,000, but also that the Shelley group was such a group that doubt existed as to the tenderer's financial capacity. The continuing awarding of tenders to the Shelley group, following these statements, would indicate that the Government had investigated the financial soundness of the head contractor of the Shelley group. To their detriment they have found out that that was not the case. I challenge the Government to indicate what steps it actually took in relation to the Shelley group to fulfil the promise made to Ms Follett in the answer to this question, that is, that tenderers of over $200,000 are always investigated and that investigations also occur when doubt exists.
Since 20 March when that original statement was made, at least 10 contracts of a value of over $2m have been awarded to Shelleys; half of them for more than $200,000. Of even greater concern is that on 18 July 1990, precisely one week prior to the collapse of the Shelley group, the ACT Government Gazette No. 28 announced the awarding of six contracts to a value of some $1.65m to the Shelley group. This was one week prior to the collapse, Mr Acting Speaker. Following the statements that contractors are investigated if the contract is for over $200,000 or if there is a doubt, we have $1.65m in contracts being awarded.
Mr Acting Speaker, I believe that it is clearly demonstrated that the Government knew of the situation of Shelleys. (Extension of time granted)
I believe that the documents and the answers to questions on notice about the position of the Shelley group demonstrate that the Government was aware earlier this year that there were cash flow difficulties which meant that subcontractors were not being paid. It imposed particular conditions in relation to one contract which involved the auditing of Shelley's books - a circumstance that was widely known throughout the industry. It told this house that successful government tenderers are investigated subject to a financial limit on the tender - which was, in fact, exceeded in over half of those contracts awarded on 18 July - or in any case where there is doubt over the viability of the tenderer. I would submit that, given the prior history of the Shelley group, it must have been taken by the contractors that this was a circumstance where the contract would be investigated.
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .