Patrick Hollingworth's pitch to the Canberra Institute of Technology was always confident. Yes, the upfront costs are big, the proposals conceded. But you need to look instead at what you'll get from me over the long term.
"We set our fee to reflect the potential for an order of magnitude return on the investment over a ten-year timeframe (i.e., a longer temporal scale). Amortising our fee across a decade gives you an annual cost of $170,501," Mr Hollingworth's Think Garden told the institute in an effort to secure a fourth contract ultimately worth $1.7 million.
"We think this is ridiculously good value."
The ACT Integrity Commission did not.
"This statement is meaningless. ... The last sentence is mere puffery," Integrity Commissioner Michael Adams KC wrote in a report released last week.
Six contracts, worth more than $8.5 million, awarded to Mr Hollingworth's companies show how the mountaineer, consultant and motivational speaker achieved excellent conditions.
The first report from an investigation into the Canberra Institute of Technology's handling of consulting contracts awarded to Mr Hollingworth last week found the institute's former chief executive, Leanne Cover, to have engaged in serious corrupt conduct.
Ms Cover, the commission found, had misled the institute's board and Skills Minister Chris Steel over the contracts.
The commission's long-awaited report gives some hints about the way Mr Hollingworth convinced the territory's publicly owned vocational training college to part with millions of dollars and under what terms.
48-hour responses, whenever possible
In Mr Hollingworth's first proposal to the Canberra Institute of Technology, in which he pitched himself to lead the institute's transformation work for 18 months, he set his own generous accountability indicators.
"Responding to the CEO's questions and requests concerning the work within a 48-hour time period (during weekdays and when I am in Australia), whenever possible," read one.
The work would include workshops, coaching and consulting.
"The specific nature of every component of the work is yet to be identified, however no components of work will begin without mutual consent of CIT represented by the CEO and myself," Mr Hollingworth wrote.
A retainer for 15 hours' work a month
When it came time to renegotiate with the institute, Mr Hollingworth proposed a $1.2 million deal that would have included putting him on a 15-hour-a-month retainer worth $302,500 a year. That works out to an hourly rate of $1680.55.
"The Tender Evaluation Report did not contain a detailed analysis of the value for money," the Integrity Commission noted.
Mr Hollingworth eventually agreed to a deal worth $151,200 over three months for workshops, coaching and mentoring. The equivalent hourly rate is unclear.
A year's pay for six months' work
In 2020, the CIT and one of Mr Hollingworth's companies entered a fourth contract, worth $1.7 million after an open tender process. The contract included a provision to extend the 20-month contract term for 12 months for $1.
The institute did take up the contract extension, but only for an extra six months with no reduction to the overall consulting fee.
"The contract option was for an extension of 12 months, and therefore the extension for only six months effectively surrendered the right to six months work which could have been required at no additional cost," the Integrity Commission said.
Upfront payments and discounts
For the sixth, and final, contract with the CIT, Mr Hollingworth was offering a discount, first on the cost and then later on 7.5 per cent "processing fees".
"Our fee for the two year program described in detail in this proposal is $5.68 million, including GST but excluding disbursements," his company's proposal said.
"Further, we are pleased to offer CIT a preferred client discount of 12 per cent should CIT agree to upfront payment of our fees, reducing the total fee payable to $4,999,990 including GST but excluding disbursements."
Except a 12 per cent discount on $5.68 million is not $4,999,990. The commission said the price, agreed to in a contract, appeared to have been "arbitrarily fixed". It was just $10 below a $5 million threshold which would have triggered greater oversight.
The CIT ultimately signed a contract with Mr Hollingworth that would have paid 99 per cent of the fee after less than 80 per cent of the contract period.
