The state government has become embroiled in a court battle with building giant BGC over the handling of a bid for $126 million in medical construction contracts.
The state government has become embroiled in a court battle with building giant BGC over the handling of a bid for $126 million in medical construction contracts.
BGC has gone to the WA Supreme Court to overturn a decision by the state’s treasury to reject its bids for contracts at the Nedlands-based QEII Medical Centre and Sir Charles Gairdner Hospital due to non-compliance.
On Friday, Justice Ken Martin of the WA Supreme Court granted BGC an injunction against being shut out from the evaluation process over an issue relating to the documentation process.
In effect, BGC’s lawyers claim Justice Martin has ordered that the state cannot award the tender without evaluating BGC’s tender equally and on its merits.
The Department of Treasury and Finance, which is responsible for the process, said the initial bids had been rejected following legal advice that they were non-complying.
State under-treasurer Tim Marney said that the department was concerned about issues and potential legal action from other parties that may have arisen if the bids had been included.
However, in light of the court ruling, Mr Marney said that the department would be evaluating the BGC bid, subject to provision of additional information, and did not anticipate that would result in a delay in the tender process.
BGC has recently been at odds with government over other tender practices.
In August, BGC attacked the state government tendering process used to award $342 million in building contracts as part of the federal government's stimulus package, administered by the state’s Department of Housing and Works.
BGC 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.
This latest tendering matter started when the state government sought bids to build PathWest Laboratories, budgeted to cost $67.5 million, and its nearby Comprehensive Cancer Centre Stage 2, budgeted for $58.5 million. It had planned to name its preferred tender by December 21.
As part of the tender process it is understood that the state’s Building Management and Works, which is part of the state’s Department of Treasury and Finance, held individual meetings with each of the potential bidders.
BGC claims its understanding of the tender process was guided by the discussions at that meeting.
The company is fighting the rejection of its bids and, on Friday, won a mandatory injunction against the state requiring its bid to be evaluated and restricting the state from awarding the tender without considering the BGC bid.
Hotchkin Hanly partner Michael Hotchkin said the mandatory injunction was rare and ensured the bid process could continue while the dispute was settled.
“I think the court took a really sensible approach to fixing a problem that was really not of BGC’s making,” Mr Hotchkin said.
“It is also a lesson for people wanting tenders to make sure they avoid the risk of saying different things to different people.”
Below is the full response received from WA under-treasurer Tim Marney:
The Department of Treasury and Finance (DTF) recently called tenders for 2 projects at the QE11 Medical Centre for a PathWest pathology facility and stage 2 of the Comprehensive Cancer Centre.
The tender information submitted by BGC was considered by DTF and there was concern that it was not in accordance with the specified tender requirements (which would potentially cause issues with competing tenders and possible legal action). In response to this concern, DTF sought legal advice, which confirmed the BGC tender should be treated as non-conforming . BGC was informed that its tender was non-conforming and would not be considered.
BGC sought an injunction to prevent its tenders being considered non-conforming, and to prevent the award of contracts, pending a hearing to decide the matter.
On Friday 4 December the Supreme Court ruled that BGC's tender should be evaluated , following provision of additional information (eg tender price breakdown and nominated subcontractor credentials).
DTF will proceed with this evaluation, with appropriate consideration of the BGC tender against the other tenders already identified as conforming with the tender requirements. The tender evaluation panel will make a recommendation on the best value for money outcome for the State.
It is not anticipated that this will result in any delays to these projects and DTF is optimistic of good results for the State.
