The Canberra Institute of Technology's executive ignored advice from the ACT government's procurement board about a nearly $5 million contract, Skills Minister Chris Steel has said.
Documents released by the government also appeared to show CIT wanted to award the contract to "complexity and systems thinker" Patrick Hollingworth without an open tender process.
The $4.99 million contract, which the board said it could not guarantee represented value for money, has come under fire for its use of jargon and for having unclear terms of reference. It was awarded by CIT in March.
The contract is the latest in a series of more than $8.5 million awarded by CIT to a company owned by Mr Hollingworth. But work has been suspended on the contract and advice is being sought about whether the contract can be completely stopped.
However, invoices from CIT paid to Mr Hollingworth indicated nearly $1.7 million of this contract had already been paid. The invoice for "business change consultancy" was paid on April 21, 2022.
The latest revelation has thrown the future of the institute's chief executive Leanne Cover into doubt. Mr Steel has told the board he expected Ms Cover's management of the contracts would be reviewed.
Documents show CIT had first proposed the tender to the government's procurement board in November 2021. The institute said it was on a tight timeframe and wanted to have a contract in place by January 2022.
CIT held a meeting with Procurement ACT on November 10 and both parties agreed there should be an open tender process.
However, in the following weeks CIT requested the procurement process be changed to "single select" in a proposed procurement plan.
Several issues were identified in a review of the plan, including that there were no clear deliverables and the pricing schedule was basic. Procurement ACT also said there was no time to make well-considered recommendations.
Procurement ACT held a meeting on December 21, where it was recognised the proposed approach risked "significant criticism" as it had not been notified to the market. Concerns were also raised around the deliverables in the contract, its price and the fact it would increase Mr Hollingworth's remuneration "significantly".
"Given the reliance CIT have on this particular changed management adviser and their particular science-based methodology, it would be difficult to construct a competitive tender process, however, this argument can't be relied upon without constant rigour and a nominated timeframe for when reliance on these consultancy services would end," meeting minutes show.
"Such an approach risks significant criticism as the full scope of these services have not been previously notified to the market and the current arrangements increase the current provider's remuneration significantly.
"The detail around both the market sounds process and basis for rates comparison to make an assessment about value for money is limited.
"There is no description in the request for quote of the services that CIT are expecting to be provided, and no defined deliverables or measures of performance."
THE STORY SO FAR:
- CIT board cannot provide assurance that $4.99m contract is value for money
- CIT given deadline to justify $4.99m contract
- ACT govt warned three years ago of concerns with CIT consulting contracts
Following that meeting an open tender process was agreed to. The tender was released on January 17 and was open for three weeks and three responses were received. But Mr Hollingworth's company, Think Garden, was awarded the $4,990,990 contract.
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 latest revelation CIT wanted a single-select procurement for the contract came after Ms Cover had also signed off on a single-select procurement process in 2018 for a $1.22 million contract with Mr Hollingworth's company. This was also overturned but the contract was still awarded to Mr Hollingworth.
Mr Steel stopped short of confirming on Friday whether he wanted the CIT board to dismiss Ms Cover.
"The employment of the CEO is a matter for the board under the CIT Act but to be really clear that it is unacceptable," he told The Canberra Times.
"I think that the CIT after being questioned and after being provided a clear message by myself and my office about concerns with the previous contracts and they may not meet community expectations that the CIT then went on to procure this latest and very large contract."
Mr Steel then pointed to the fact the territory government's procurement board had expressed serious concerns about the proposed contract, which he said were ignored by CIT.
"There was quite significant advice provided and the extent to which that was followed, I expect, will be a matter for the independent review that will be undertaken," he said.
"But [the procurement board's advice] went to the same broad issues that have been the concern all the way along ... which is that it is unclear what the deliverables are, there are very few performance benchmarks and the size of the contract also draws into question whether it is value for money."
Mr Steel said on Friday it had been wrongly reported the contract did not go to the procurement board because it was under $5 million. He said contracts worth more than $1 million from CIT were reviewed, as it was a territory entity.
The CIT's executive did not respond to requests for comment on Friday about whether its executive still stood by the contracts.
CIT's executive sought to justify the contracts earlier this week, 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".
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