A cleaning company was paid more than $8 million for work at the Emergency Service Agency over more than a decade without any scrutiny over value for money or a proper tender process, the Auditor-General has revealed.
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The Justice and Community Safety Directorate signed four contracts with the unnamed cleaning company between 2009 and 2018 and was unable to convince the ACT Audit Office there had been a sufficiently open and competitive tender process for the work.
The handling of the contracts may have breached the ACT's procurement laws.
The company had provided cleaning services across the Emergency Services Agency's facilities - including ambulance and fire stations - since the early 2000s, but payment records only dated back to October 2008.
Auditor-General Michael Harris provided the information report to the Legislative Assembly on Wednesday, which noted his office had decided against conducting a performance audit as the Justice and Community Safety Directorate had a new cleaning contractor.
The report said the directorate had paid about $3.7 million for general cleaning and grounds maintenance services between October 2008 and September 2020 without an agreed contractual arrangement or any evidence of a procurement process.
"Services have been provided since the early 2000s, similarly without an agreed contractual arrangement or evidence of a procurement process; the value of these services cannot be quantified due to a lack of financial data," the report said.
"The lack of a valid procurement process means that other potential suppliers have not had the opportunity to compete for this work and that JACS has not tested whether the service provider provided the best value for money for its cleaning requirements, in accordance with the Government Procurement Act 2001."
Before September 2020, the directorate held no documentation about the agreement for what kind of cleaning work the company would complete and how the company would be paid.
"Work orders were also not raised for these services. This resulted in poor controls over the commissioning of general cleaning and grounds maintenance services from the service provider," the report said.
The directorate signed four contracts with the cleaning company for industrial cleaning services between 2009 and 2018 but there was no evidence to "provide confidence the procurements were sufficiently open and competitive".
The directorate's director-general in September 2020 approved a procurement exemption to allow a six-month contract with the cleaning company for COVID-19 cleaning services without an open tender process. The contract was twice extended.
"This decision acknowledged a 'requirement to deliver immediate COVID-19 level cleaning services for the ACT Ambulance Stations and ACT Fire and Rescue Stations' and that it was an interim arrangement until the integrated facilities management services arrangements were put in place," the Audit Office report said.
The Emergency Services Agency, which sits under the directorate, had no contractual arrangements in place with the cleaning company demonstrating agreement for ad hoc cleaning services. About $800,000 was paid for ad hoc cleaning services between October 2008 and September 2020.
Work orders were raised to commission ad hoc cleaning services by the company, the Audit Office found.
"The services that were provided were broad in nature, and included services related to cleaning and grounds maintenance. It is not clear how the ad hoc cleaning and grounds maintenance services differed from, and were in addition to, the regular cleaning and grounds maintenance services provided," the report said.
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The Audit Office's report said the cleaning company's managing director had said the company sought to enter into a contract in the early period it began offering services, but this was not forthcoming from the directorate.
"In its response to the final proposed report JACS noted that this is an assertion without any indication of when and to whom the request was purportedly made and accordingly cannot be verified," the report said.
The report said the Audit Office became aware of the arrangement for cleaning services over a long period as part of its June 2021 performance audit into procurement exemptions.
The Justice and Community Safety Directorate told the Audit Office it had improved its procurement and contract management arrangements, and had procured an integrated facilities management service provider in 2021.
Mr Harris has previously indicated procurement issues across the ACT's public service were a focus of the Audit Office.
"I think it's fair to say across the ACT public sector in general there's a lack of expertise on the one hand, or awareness of, on the other hand, the appropriate policies and practices that should be followed in order to get good procurement outcomes," Mr Harris told annual report hearings in November.
Integrity Commissioner Michael Adams KC has previously said issues with the ACT government's procurement processes are likely to be endemic.
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Jasper Lindell
Jasper Lindell joined The Canberra Times in 2018. He is a Legislative Assembly reporter, covering ACT politics and government. He also writes about development, transport, heritage, local history, literature and the arts, as well as contributing to the Times' Panorama magazine. He was previously a Sunday Canberra Times reporter.
Jasper Lindell joined The Canberra Times in 2018. He is a Legislative Assembly reporter, covering ACT politics and government. He also writes about development, transport, heritage, local history, literature and the arts, as well as contributing to the Times' Panorama magazine. He was previously a Sunday Canberra Times reporter.
