The Canberra Institute of Technology board has said it cannot provide an assurance that a nearly $5 million contract is value for money and will undertake an independent review of the contract to Think Garden, a company run by "complexity and systems thinker" Patrick Hollingworth.
But the ACT government is "largely unsatisfied" with the response from the board and further advice is being sought about what can be done in relation to the contract. The government has indicated there will be action taken in the coming days.
CIT's executive has sought to justify the contract, which was signed in March, by saying the work would help equip staff with the capacity to assess and change courses as necessary during a time of "significant skills shortages".
Skills Minister Chris Steel demanded an explanation from the board last week over the $4.99 million contract, which has been criticised for its use of jargon and for having an unclear terms of reference and deliverables.
The contract requirements included Think Garden to develop "system wide capabilities of situational awareness, early/weak signal detection and noise sorting" and to develop "iterative capacity to cycle through adaptive/ renewal processes across multiple spatial and temporal scales".
The contract was also $10 below the level at which it would have attracted greater scrutiny by the territory government's procurement board.
CIT board chair Craig Sloan wrote to Mr Steel on Tuesday, saying an independent review of the contract will be undertaken.
"While the CIT board has had regular briefings from Think Garden on the progress of their work it will be important to assess the ongoing effectiveness of the services offered to ensure that outcomes are being achieved and the contract represents value for money," Mr Sloan wrote.
"The CIT board has agreed that based on the information we have at hand it is not currently in a position to provide assurances to you that this contract represents value for money.
"In order to remedy this position, the board has resolved to immediately review the contract in question through an independent internal audit."
THE STORY SO FAR:
- CIT given deadline to justify $4.99m contract
- ACT govt warned three years ago of concerns with CIT consulting contracts
- What did the CIT (and the taxpayers) get for $8.5 million?
The board has also asked for advice from the institute's executive about putting the contract on hold while the independent audit is under way.
The audit will review the entire contract and examine whether it represents value for money. It will also probe the prior performance of contracts awarded to Mr Hollingworth, whose company has been awarded more than $8.5 million worth of contracts by the institute over the past five years.
It will also investigate the procurement process, including its compliance with ACT laws and regulations, any potential conflicts in the drafting of the tender documents and the provision of information to the board.
Mr Sloan wrote that the procurement process for the contract was undertaken by the CIT executive, within the financial delegation of chief executive Leanne Cover and that the board was not involved in the procurement or briefed on the evaluation process or value of the successful contract.
"The board has been advised by the CIT executive that all procurement processes relating to the contract have been undertaken in accordance with the ACT procurement rules," Mr Sloan said.
"The internal audit will also seek to verify this and assurance [sic] that no director or staff members were involved in the preparation of the range tender documents association with this contract."
The letter from Mr Sloan also included an attachment from the CIT's executive, which sought to explain and justify the activities and outcomes of the contracts.
The executive's response said the contract was an appropriate use of public funds as it was a "major systems approach, appropriate for the scale of the opportunities and challenges we are facing".
"CIT is seeing a decline in student enrolments at a time where there are significant skill shortages in the economy," the response said.
"It is important that CIT and CIT staff have the capacity to assess the changes that are occurring in the economy and reconfigure course offerings and work with industry in responding to the skill needs for the future."
It said the work required from Think Garden included to design and implement:
- "A coordination function, which is a set of processes used by teams of staff to support a coherent Institute-wide implementation of the reform directions, enabling customised responses to meet the diversity of CIT's needs;"
- "Formal and informal learning to develop CIT's capacity to undertake the strategic initiatives and reform objectives in a coordinated, coherent and timely manner;
- "Learning opportunities for CIT staff to improve their understanding of the changing environment CIT is operating in and develop ongoing context appropriate responses;
- "Processes to ensure staff can practice what they have learned in a disciplined manner using appropriate constraints ensuring greater coordination of CIT's decision-making practices related to products, offerings and services; and
- "Digital platforms and collaboration spaces to record, monitor and share information and findings as the work is conducted."
The executive response said that Think Garden would also provide "regular strategic guidance" to relevant staff through teleconference, video, face-to-face meetings and other digital communication platforms.
Five staff from Think Garden have been involved with the contract and have worked with staff on 49 out of a possible 52 days since the contract started in late-March.
But an ACT government spokeswoman said the government was not satisfied by the response.
"The decision from the board to progress with an independent audit of the contract is welcomed," she said.
"However, the government is largely unsatisfied with the response put forward by CIT and the board, which raises further questions and concerns in relation to CIT's processes and governance.
"We are continuing to seek advice on the most appropriate steps forward in relation to this issue and will have more to say later in the week."
Opposition Leader Elizabeth Lee welcomed the independent audit into the contract but said it needed to go further and probe all contracts awarded to Mr Hollingworth.
"While we welcome an independent review into the recent contract - after all that is what we called for last week, it is not broad enough and needs to take into account all of the contracts awarded and CIT's practices and processes," Ms Lee said.
"For total transparency, the terms of reference must be made public to ensure adequate scrutiny of all contracts awarded."
Ms Lee criticised the government on Wednesday for releasing the letter to the media and not to the public. She said she wrote to Mr Steel on Tuesday, asking for a copy of the response as soon as it was received but she did not receive this. She was also critical that comments came from a "government spokesperson", saying the minister needed to be upfront with the public.
Mr Steel tested positive to COVID last week and is in isolation until Thursday morning.
Mr Steel said he only became aware of the $4.99 million contract last week but he revealed he raised concerns with CIT about more than $3 million worth of contracts with Mr Hollingworth in March 2021.
ACT Chief Minister Andrew Barr was also warned about contracts with Mr Hollingworth three years ago. At the time, Mr Barr wrote that he was satisfied CIT had followed the correct procurement processes.
Mr Hollingworth has not responded to requests for comment.
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