A tender for work at the Acton waterfront was poorly designed and the territory government agencies responsible for the work did not do enough to ensure they received value for money as the cost of the work grew by more than 70 per cent, an audit has found.
The Auditor-General's report into procurement and contracting for the Acton waterfront project, which formed part of the high-profile City to the Lake plan, found the government's management between 2014 and 2020 was ineffective and the initial 2014 tender poorly designed.
The audit found documents "grossly underestimated" the value of procurement which "without doubt" affected the advice provided to government.
"Following the execution of the contract, the Land Development Agency varied the contract with insufficient regard to value for money considerations," the 149-page audit report, released on Friday, said.
Work on the project was expected to cost $28 million in December 2014, but the contract, which has been varied several times, now covers about two-thirds of the originally planned work and is worth $46.8 million.
The report also criticised the City Renewal Authority, which was established in 2017 and took over the project, for its failure to "robustly assess the risks of continuing with the contract against alternative options".
"The City Renewal Authority should have examined alternatives to remaining with the incumbent Contractor well ahead of consideration of the major Contract Price increase in April 2020 for the next element of the project," the audit found.
The audit made seven recommendations, which include calling on the City Renewal Authority to make more information public about the procurement process and contracts for the project and improve its procurement processes.
"As part of due diligence following changes in administrative arrangements, ACT Government entities should conduct a risk-based assessment of the procurement and contracting arrangements supporting any legacy contracts that have been assumed by the entities," the audit recommended.
The City Renewal Authority should also fully and completely brief decision makers, delegates and the government's procurement board on procurement matters, the audit said.
The City Renewal Authority said the report made "several sensible recommendations" and it was committed to implementing them as soon as possible.
"The Acton waterfront project is a complex and significant city renewal initiative that has evolved over its planning and development history as the territory's expectations have also evolved, as is common for high-profile public development projects," the authority told the auditor-general.
The government outlined a 10-hectare area bounded by Commonwealth Avenue and Parkes Way in December 2014 as the site for public space, commercial and retail buildings and an aquatic centre.
The Acton waterfront project, part of the site, was outlined at the time to include a park and boardwalk around the West Basin foreshore of Lake Burley Griffin following a realignment of the lake edge and land reclamation.
The now-defunct Land Development Agency released a tender for a two-stage process in December 2014, with a proposed value of $27.5 million for the second stage, when construction would be completed.
The audit noted there had been 16 variations to the contract between November 30, 2015, when it was awarded, and September 4, 2020. The value of the contract increased to $46.8 million, but did not encompass all the work originally planned.
The project was due to be completed by late 2016 but is still yet to be finished.
The National Capital Authority granted works approval for the boardwalk and land reclamation in September 2020, and the audit criticised the Land Development Agency for inadequately identifying the interests of the authority.
"There is evidence that the September 2015 works approval submission lodged by the Land Development Agency required substantial additional work, with respect to meeting the National Capital Authority's requirements. This impacted both the project cost as well as the timeframe," the audit said.
The audit said there was no evidence the contractor, Chincivil Pty Ltd, had acted inappropriately. "The City Renewal Authority has advised that at each stage of the project the contractor's performance has met expectations," the audit report said.
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