‘Follow the money’: Lobby-linked contracts had real conflicts of interest

Joseph Brookes
Senior Reporter

A fifth of the government procurements linked to an alleged lobbying scandal involving tech suppliers and former minister Stuart Robert had either conflicts of interest, poor value for money consideration or inadequate records, a review of Services Australia and the National Disability Insurance Agency contracts has found.

The procurements — flagged in an internal review released on Sunday for further investigation — are worth $374 million and allegedly linked to a consulting and lobbying firm owned and run by the former minister’s close friend and political fundraiser.

They raise questions Mr Robert must answer, according to Services minister Bill Shorten, who will now consider the findings for a government response.

Mr Robert insists the review should put an end to the matter because it did not find “clear misconduct” among $618 million in government buying.

Canberra Parliament

“The former minister Stuart Robert certainly has questions to answer because the bulk of these contracts and literally hundreds of millions of dollars involved in these contracts occurred on his watch,” Mr Shorten said.

“He will need to explain, in my opinion, how come there were so many deficient procurement standards in these contracts.”

The Independent Review of Services Australia and National Disability Insurance Agency Procurement and Contracting, released on Sunday, shows the results of a probe into 95 procurements worth $618 million potentially linked to an alleged lobbying scandal.

It found many complied with Commonwealth Procurement Rules, but 28 were inconsistent with good practice, including the 19 that warrant further investigation.

The review was triggered by media reports but did not consider the behaviour of Mr Robert or the private firm involved.

A joint taskforce from Services Australia and the NDIA was established to support the review. It examined the procurements from 2015-16 to present. The period includes Mr Robert’s time as Human Services minister and his time as Government Services minister.

The final review did not find evidence of “clear misconduct” by public servants but did identify conduct “that was not good practice”, including evidence of real conflicts of interest that were not properly managed.

“There were a number of procurements with insufficient conflict of interest documentation and a number of instances where actual, potential or perceived conflicts of interest were not adequately addressed,” the review said.

“Additionally, there were examples of poor practices and close relationships between some APS officials and suppliers and those relationships were not always managed effectively.”

The review, conducted by former head of the federal public service, Dr Ian Watt, flagged 19 of the procurements for further investigation.

More than half of the 19 flagged procurements — worth around $235 million — had “insufficient conflict of interest documentation commensurate with the scale, scope and risk”.

Four of the procurements had insufficient risk considerations, while seven had insufficient record keeping. 12 had unclear or insufficient value for money justification, and 11 involved significant contract extensions or variations.

Nearly half did not meet the reporting requirement to publish the contract on AusTender within 42 days.

Concerningly, a comparison to other similar procurements by Services Australia and the National Disability Insurance Agency (NDIA) not linked to the scandal found a “similar standard”, indicating the sub-optimal procurement processes likely extends much more widely across the agencies.

The review was triggered by media reports that consulting firm Syndergy360 was lobbying government officials on behalf of companies around the time he was a minister, and the company was paid a commission if a contract was successfully secured.

Mr Robert is a close friend of Synergy 360 chief executive David Milo and its shareholder John Margerison, who has raised money for the former minister.

The media reports led to current Services minister Bill Shorten ordering the review while warning of “corruption”.

Mr Robert has denied any wrongdoing or involvement in the procurements. His office did not provide a response when asked about the review on Monday, but the former minister told the Parliament the finding of no “clear misconduct” should put an end to the matter.

“After four months… multiple interviews, working through multiple departments, Dr. Watt has found a zero misconduct upon 95 procurements, and that’s where the matter should rest,” he said.

The procurements examined in the review include large deals with technology suppliers like Adobe, Delv, Infosys, Oracle and Unisys, among the 95 procurements examined. But the 19 contracts warranting further investigations are not identified individually in the review.

Mr Shorten welcomed the release of the review on Sunday, but said it showed Mr Robert has questions to answer.

“It appears that some of these contracts, the controversial contracts, the ones which have failed to meet what is regarded as the proper standard of the Australian Public Service procurement guidelines, are involved with a network of political contacts of the former government at the centre of the allocation of these contracts,” Mr Shorten said.

The minister said more needs to be done to find out the “basis for the allocation” of the 19 contracts in question, and the government will provide a response after considering the review.

“The problem for us is that some of these investigations can only be really fully satisfied when we’re able to compel financial data from parties beyond the federal government to understand what’s gone on here, we need to follow the money,” Mr Shorten said.

In addition to calling for a closer look at the 19 procurements, the damning review has recommended tighter governance and transparency in future procurements, as well as the professionalisation of procurement.

Dr Watt wants the review shared across Australian Public Service Agencies to help reform procurement.

“The reviewer’s clear conclusion is that both reports should be shared with at least selected agency heads across the APS,” he wrote

“The issues found within the procurements reviewed are far from unique to the NDIA or SA. There are lessons within these findings that should be applied across the APS.

“Further, there is a need for capability uplift across the APS to ensure the challenges identified through the review are fully addressed.”

Do you know more? Contact James Riley via Email.

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