06/08/2009 - 00:00

BGC blasts state tender

06/08/2009 - 00:00

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CONSTRUCTION companies including industry heavyweight BGC have attacked the state government tendering process used to award hundreds of millions of dollars worth of work upgrading the state's primary schools.

CONSTRUCTION companies including industry heavyweight BGC have attacked the state government tendering process used to award hundreds of millions of dollars worth of work upgrading the state's primary schools.

The criticism is targeted at a second round of tendering, overseen by the Department of Housing and Works, of $342 million in building contracts as part of the federal government's stimulus package, administered by the state.

BGC general manager of construction, Gerry Forde, said the tender cost the company a six-figure sum, only to have the government turn around and start a second round of negotiations asking everyone to adhere to its own prices.

"It's a blundering disgrace," Mr Forde told WA Business News.

"It wasn't an easy tender; it was actually an expensive exercise."

BGC pulled out of the process upon receiving a letter signed by the department's program director Steven Luce, asking the company to reduce its prices if it wanted to be considered for work.

The practice of second-round tendering is frowned upon in the sector where tenders are almost always awarded to the cheapest and/or best applicant on the first go.

"This second-tier tendering is against the government's own code. It's about time Buswell read the bloody thing," Mr Forde said, referring to the WA treasurer.

Small constructors who also received the letter were equally critical of the process. A handful of big companies won the bulk of the work, despite the industry expecting it to be shared around.

National construction group John Holland won 40 per cent of the new school tenders with 88 contracts valued at $140.4 million. Pindan Constructions (19 projects worth $38 million) and Arccon (14 projects worth $27 million) were also big beneficiaries of the federal government initiative.

It is understood the state government has indicated to industry groups that the situation was unusual in that there was a huge amount of work to be awarded and completed in a short timeframe.

In a written response to WA Business News, the Department of Treasury and Finance said the process ensured the state government got the best value for money, and it minimised the risk of awarding a large number of contracts to a small number of bidders.

"It is also worth noting that as part of the Building the Education Revolution program the federal government placed a 'cap' on the available funds for each school, and tenders above that cap could not be accepted," the department wrote.

The department has confirmed it will post the contract details soon, so the public can view the prices of the winning tenders.

 

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