Page 2416 - Week 07 - Wednesday, 2 August 2017
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Icon Water has stated that the government have never reviewed their procurement framework. The procurement framework has never been requested by the voting shareholders—the Chief Minister and the Deputy Chief Minister. Instead, the Canberra Liberals have been the first to actively and publicly request and examine this document.
Mr Barr: Not the shareholders’ role.
MR COE: And the Treasurer.
Mr Barr: The minister for water.
MR COE: The minister for water. While Icon Water are not bound by the Government Procurement Act, I refer to their procurement policy, which outlines that contracts over $250,000 are considered high value and that these major and strategic procurements are managed via a tailored procurement plan. The key components of major and strategic procurements include: request for quote or request for tender documentation; a market approach; the development of an evaluation plan; and evaluating and assessing offers. These steps were not undertaken for these two contracts, with a combined value of about 100 times the stated threshold.
Madam Speaker, they have a process in place for contracts over $250,000. Here is a contract worth about $300 million and they did not follow it. That should be of concern to the board. That should be of concern to the shareholders. In estimates on 3 July 2017 the managing director stated that Icon Water was “not under an obligation to go out to market”. There was no request for quote or tender. There was no market approach. There was no evaluation and assessment of offers. What is the point of having a procurement policy if it is completely discarded when undertaking contracts worth hundreds of millions of dollars?
Here we have a contract that is extremely high value with a clear conflict attached. This is one situation where you would expect the strictest compliance with the procurement policy; instead, Icon Water have failed to follow their own stated procedures and utterly abandoned all notions of probity and independence. While Icon Water’s actions are not illegal, they are not consistent with their very own stated procurement principles and protocols. The Icon Water procurement policy clearly states:
Goods and services should be acquired via a competitive process. Competition avoids any suggestions of favouritism. It also helps promote efficiency and economy.
Despite the extolling of ethics and probity, Icon Water admitted that they entered into these agreements without complying with their own stated framework. However, there was an agreement in principle that there would be no material disadvantage between Icon Water and ActewAGL. In the words of the managing director, “It was never entertained that the agreements would be taken out to market.” I repeat: it was never entertained that the agreements would be taken out to market. Icon Water have confirmed there is no written evidence of this concept—
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