Senate debates

Monday, 15 November 2010

Questions without Notice

Defence Procurement

2:56 pm

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | | Hansard source

My question is to the Minister representing the Minister for Defence, Senator Evans. Can the minister confirm that Defence has entered into a $100 million contract for the provision of air services to the Middle East area of operations with a company that owns no planes, employs hardly any Australians and is using a Portuguese charter operator that has no Australian regular passenger transport certificate operator’s licence and that the minimum requirement of the tender specifications requires that any aircraft carrying defence personnel be by an operator who has such a capability? Why was this tender response not voided due to such noncompliance?

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | | Hansard source

I thank Senator Johnston for his question. I do not have a specific brief on the tender to which he refers. I am aware that we have, under successive governments, tendered for contractors to move Australian personnel through the Middle East and other regions and that we have also tendered for the movement of equipment et cetera. I know it is an issue he is interested in. It was an issue I was interested in when I was shadow defence minister because I think there was a Russian company doing it at the time and there were concerns about whether or not they had enough operating capital and were a reliable enough provider.

Senator, you would be aware that I would not have a brief with the level of detail which you seek. I do not know whether you pursued this at estimates and I do not know whether this is an ongoing matter, but I am certainly prepared to ask the Minister for Defence, Mr Smith, if he can provide me with a brief on this particular tender and the issues surrounding it. If he is able to do that, then I will obviously make it available to you at the first opportunity.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | | Hansard source

Mr President, I ask a supplementary question. Further to that answer, Minister, you may also like to be made aware that Deloitte Touche Tohmatsu on 1 September conducted an assessment and an audit of the contract. This assessment was completed on 15 September this year at a cost of $600,000. The period of time over which that audit was conducted was some six days. How can such an outrageous—

Government Senators:

Government senators interjecting

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

Order! Senator Johnston, you are entitled to be heard in silence.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | | Hansard source

How can such outrageous expenditure—namely, $600,000 for six days work—be justified when Deloittes admitted upfront in their report that they did not interview any of the tenderers, did not verify or check the integrity of the financial information provided and did not verify the information obtained by online media sources but relied upon the transcripts of interviews undertaken by others? (Time expired)

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | | Hansard source

Obviously the senator has a great deal of detail regarding this matter, but I understood the first question went to his concerns about the contract and the tender process and to whom it was awarded. But the supplementary seems to go to the fact that he is concerned that the government made some inquiries into that process and took the sorts of concerns he had expressed seriously. So I gather that now he is concerned that we actually inquired into the contract. I do not know whether he is questioning whether Deloittes should have been employed, whether he is just questioning the result of the audit or whether it is purely the costs. Clearly the senator is concerned about the original contract and now he is concerned about the inquiry. No doubt his second supplementary will reflect concern about some other matters. As I say—

Photo of George BrandisGeorge Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | | Hansard source

There’s a lot to be concerned about with this government.

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | | Hansard source

Well, these contracts have a long history. (Time expired)

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | | Hansard source

Mr President, I ask a further supplementary question. I draw your further attention to an audit conducted by PricewaterhouseCoopers on the alleged improprieties associated with this contract, the cost of which remains undisclosed. There was an internal investigation which was a whitewash, conducted by the department itself, and a report from the Australian Government Solicitor’s Office that has been stated to have cost $77,000. So, for a cost of around three-quarters of a million dollars, Defence have a series of whitewashed reports that do nothing to inspire confidence that the integrity of the tender process has been adhered to, and instead awarded— (Time expired)

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | | Hansard source

I am not sure there was a question in that, but certainly the senator has sought to use question time to raise a series of issues that perhaps might have been done better in an adjournment speech or by providing early advice to me so that I could have helped, if he was genuinely after answers, by seeking a brief from Mr Smith. What I would say, though, is that accusing Defence of conducting a whitewash is a fairly strong claim by the opposition Defence spokesman and, given he has had to walk back from a number of his claims and the military advice he has provided in recent times, I suspect he ought to be a little more circumspect. I have no personal understanding but I think it obviously reflects negatively on Defence Force officers. I think he ought to be a little more circumspect, but that is his call.

Mr President, I ask that further questions be placed on the Notice Paper.