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Tuesday, 23 August 1994
Page: 159

(Question No. 1540)

Senator Tierney asked the Minister representing the Minister for Administrative Services (with reference to the provision of leased office accommodation at Charlestown, NSW, for the Department of Social Security to act as a regional office and area management Hunter office for the department), upon notice, on 30 June 1994:

  (1) What were the Commonwealth guidelines as set out in the development brief for this project.

  (2) Who was successful in gaining the tender on this project.

  (3) Why did the Commonwealth call for a development ideally over two floors.

  (4) Why did McGees National Property Consultants proposal conform to the Commonwealth's development brief, whereas the successful tenderer did not conform to the development brief.

  (5) Why didn't the department advise McGees National Property Consultants that they would consider alternative developments outside the development brief guidelines if a more competitive lease rental and incentives could have been considered by the department.

  (6) Why didn't the Commonwealth seek a similar type of proposal from McGees National Property Consultants for a three storey development to ensure that they were getting the best financial deal.

  (7) Would the chosen three storey plan have fitted better on the McGees National Property Consultants site allowing a more competitive rental to be offered to the department.

  (8) Why didn't the Commonwealth attempt to negotiate a lower rental figure with the McGees group as their plan conformed with the brief and the only reason given for declining the proposal was financial considerations.

  (9) Was the difference in lease terms so great that the Commonwealth could justify proceeding with a proposed development that diverged to such a large degree from their own development brief.

  (10) What other Commonwealth projects has the successful tenderer in this matter been the successful proponent.

  (11) Is the department satisfied that financial probity has been exercised in gaining the best deal for the taxpayers' dollar in this matter.

Senator McMullan —The Minister for Administrative Services has provided the following answer to the honourable senator's question:

  (1) The development brief sets down the Commonwealth's requirements for premises for the purposes of providing office accommodation for the Department of Social Security (DSS) Charlestown Regional and DSS Area Hunter Management offices.

   The development brief outlines DSS's base building needs in relation to such matters as building location, size, access to services, and the performance of electrical, mechanical and hydraulic systems. It is not intended to deal in a substantive way with aesthetics or design considerations, these matters being best left for consideration and solution by prospective developers.

   The space requirements for the Area Management and Regional offices were stated as 2,300m2 and 1,830m2 respectively (i.e. a total office area of 4,130m2) together with thirty (30) undercover secure car parking spaces.

   Section 5.01 of the development brief notes that: "The premises should ideally be located over two (2) levels. The lower level will be set aside solely for the Regional Office, with access to the Area Office upper level/s via a separate entry point." (emphases added)

  (2) Cancarra Pty Limited—Trading as Flannery Constructions, A.C.N. 003 694 595 of 13 Mangrove Road, Sandgate, New South Wales.

  (3) A development over two floors would have met DSS ideal functional requirements. The development brief did not preclude any proponent from submitting proposals over more than two floors (see answer to Question 1).

  (4) The successful proposal meets the overall requirements outlined in the development brief and provides the most favourable financial arrangements to the Commonwealth.

  (5) It was unnecessary to do so as the development brief allowed for both the design suggested by the successful tenderer and the one proposed by McGees National Property Consultants.

  On the question of competitive lease rentals it is up to each proponent to produce their best offer for consideration by the Commonwealth.

  (6) Because it was up to McGees to propose whatever configuration they liked providing it was in line with the overall development brief.

  The Commonwealth negotiates with any particular proponent on the development options and financial arrangements submitted by that proponent. These negotiations are commercial-in-confidence.

  (7) See answer to Question 6.

  (8) The Commonwealth did negotiate with the McGees group and with the other proponents, seeking best rental offers. The outcome of these negotiations did not establish McGees National Property Consultants' proposal as the most favourable on financial grounds.

  (9) See answer to Question 4 above.

  (10) The DSS Regional office at 275-279 King Street, Newcastle;

  We understand, however, that the company in question was engaged as builder by the lessors of the following properties:-

  DSS office at 7-9 Kelton Street, Cardiff, to rectify earthquake damage;

  29 Smith Street, Charlestown, to construct an office for the Department of Employment, Education and Training (DEET).

  (11) Yes. The Department of Social Security, which approved the proposal at a senior level, and the Department of Administrative Services (DAS), are satisfied with the integrity of the process and the value-for-money of the outcome.