Qld audit suggests "favouritism" in DJAG boot camp contracts

By David Donaldson

April 9, 2015

The Queensland Audit Office has found significant irregularities surrounding the awarding of contracts for the government’s youth boot camp program, but cleared officials at Department of Justice and Attorney General of most of the blame.

Instead auditor-general Andrew Greaves found former attorney-general Jarrod Bleijie ignored evaluation panel recommendations in awarding contracts to applicants deemed unsuitable, resulting in higher costs.

The report argues that the poor processes and lack of transparency surrounding the contracts “weakened” accountability and “ultimately leaves the process of awarding the two contracts open to accusations of favouritism, which in the absence of a clear documentation trail, cannot be readily rebutted”.

In one case, the tenth-ranked applicant won the contract.

The decisions have proven costly — although the original budget approved for the boot camp trial was $4.9 million, Greaves estimates the cost over two years will be $12.3 million, an increase of $7.4 million.

It has also emerged departmental staff had been instructed not to co-operate with the auditor-general’s investigations.

The contracts relate to the Newman government’s trial youth boot camps as part of its Safer Streets Crime Action Plan — Youth Justice. Early intervention boot camps targeted teenagers at risk of long term offending, sentenced youth boot camps were for those with a history of offending who faced imprisonment, or were guilty of multiple motor vehicle offences.

Of the three contracts entered into for the expansion boot camps, only the Rockhampton site was awarded to the provider recommended by the tender evaluation panel.

While Greaves found no issues with the departmental expressions of interest process, Bleijie’s decisions appear not to have followed the department’s guidelines. In the case of the Fraser Coast and Lincoln springs boot camp providers, “the evidence indicates that suitable, lower cost service providers were available”.

Bleijie did not record the reasoning behind his decision, with the report adding that the then-attorney-general failed “to adhere to the government’s own documentation standards.”

It continues:

“Actual experience since the two contracts were awarded serves to reinforce our view, particularly for the sentences youth boot camp. Contract variations and payments were made to the service provider in excess of the contracted amounts. Capital improvements for, and payments to, the sublessors of the sentenced boot camp facility were made on very favourable commercial terms. These all represent value transfers with little certainty that the state has received equivalent value in exchange.

“These extra costs also raise significant doubt about whether the full cost of the program was understood when it was approved; and whether the state is unnecessarily subsidising the sentenced boot camp provider for costs the provider is, or should have been, contractually bound to absorb.”

It also noted that then-director-general of the DJAG John Sosso did not endorse two of the EOI evaluation panel recommendations, but failed to document his reasons for doing so.

In addition, Blejie significantly changed the parameters for two of the tenders after the EOI process was completed:

“The attorney-general rejected the panel recommendations for the Cairns and Townsville SYBC [sentenced youth boot camp] and made his own decision to combine these camps into a super boot camp. The super boot camp was not subject to a new EOI process and the attorney-general advised us that he awarded the contract based on his own review of original tenders, which were for two separate boot camps.

“Awarding a contract for a single super boot camp using information supplied for another purpose and based on arrangements either not made express or at variance with the original is, prima facie, unsafe.”

Variations made to the ongoing contract were kept from Greaves and only discovered after threatening to invoke his powers to compel. Greaves detailed the struggle in his final letter to Bleijie:

“In late January 2015 my officers also advised me that they had been told by departmental staff that the director-general had requested his staff not to provide any further evidence to my office. On 27 January 2015 I wrote to the director-general requesting that he co-operate with my investigation and directing him to the relevant sections of my Act that can compel this. In response to my letter I finally obtained all the information from the department that I judged necessary to finalise my report on 6 February 2015.”

In a response letter to the draft report sent to the auditor-general, Bleijie argued there were “inaccuracies relating to your office’s summary of key facts”.

He argued, “I completely reject your conclusions” and that “I am of the view that the adequacy of the procurement process is intrinsically linked to the results or outcomes of the public expenditure … I disagreed with the weightings the Department of Justice and Attorney General had applied to the selection criteria for the Youth Boot Camp Program EOI process.”

In a response to Bleijie’s letter, Greaves noted that Bleijie had failed to provide any documentation explaining his decision-making processes, writing:

“As you have not addressed this matter in your response, I take this as your confirmation that no such evidence exists.”

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