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Franchise for the gift shop and newsagency at Sydney International Airport



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P A R L I A M E N T O F A U S T R A L I A

H O U S E O F R E P R E S E N T A T I V E S

H O N . N. A. B R O W N , Q.C., M.P. FEDERAL M E M B E R FOR MENZIE5

Shadow Attorney-General

SUITE 3 10 10 DONCASTER ROAD DONCASTER EAST. VIC 3 1 09 TEL. (0 3 ) 842 1700 FAX. (03) 84', 9532

C o rre s p o n d e n c e : '

P.O. BOX 124

DONCASTER EAST 3 1 09

4/88

PRESS RELEASE

COMMONWEALTH PARLIAMENTARY LIBRARY C. I. S.

Yet another Federal tender that has been brought to my notice shows that the government tendering process is sloppy and needs

review. ’

This one concerns the franchise for the Gift Shop and Newsagency

at Sydney International Airport.

The Federal Airport Corporation (FAC) called for tenders for the

franchise to run this business; it is worth millions of dollars and was held at the time by a company called Alaok Pty Ltd. The tender document on which tenderers bid had three clauses in it which severely limited the goods that could be sold and the

prices that could be charged at the shop.

Because of these restrictive terms, some companies did not submit

tenders.

In my press release of 5 June 1988 (attached) I revealed that the

Trade Practices Commission had told the FAC that these clauses were in breach of the Trade Practices Act.

Despite that, the FAC went ahead, allowed tenders to close and awarded the franchise to Alaok, the same company that already

held the franchise.

I can now state that the FAC, after tenders had closed, changed

the contract document. It took out one clause and altered two

others.

2.

This is clear from the attached letter from the TPC.

Having altered the tender document, the FAC should have cancelled

the tender and called for tenders again.

It did not do this.

As a result, other companies who did not tender because of the

restrictive terms, have been prevented from tendering on the

amended contract. ’

At the very least, the FAC should have told tenderers that it had altered the terms of the contract, so that they could amend their own tenders.

But it did not do this either.

It is a basic principle of tendering that if tender documents are changed, the body calling for tenders should cancel the tenders

and start again.

All of this shows very loose tendering practices.

Government bodies clearly need a lesson on tendering principles.

N A BROWN

9 October 1988

FOR FURTHER INFORMATION: (03) 439 2693 or (062) 81 4390

P A R L I A M E N T O F A U S T R A L I A

H O U S E O F R E P R E S E N T A T I V E S

H O N . N. A. B R O W N . Q.C., M.P. FEDERAL M E M B E R FOR M EN ZIES

SUITE 3 1010 DONCASTER ROAD DONCASTER EAST. VIC. 3 109 TEL. (0 3 ) 8 4 2 1 700

Correspondence: P.O. BOX 124 DONCASTER EAST 3 1 0 9

PRESS RELEASE

CONTINUING SAGA OF AIRPORT CONTRACTS

A recent piece of evidence confirms the sloppy way in which the

Government handles tenders for multi-million dollar contracts at

Australia's airports.

A letter (attached) from the Trade Practices Commission shows

that the Federal Airports Corporation is acting without regard to

the Trade Practices Act.

The contract involved, which is a contract to run the gift shop

and newsagency at Sydney Airport, is worth millions of dollars.

Despite this, the Government's handling of airport contracts has degenerated to such a low level that it is now even ignoring the

law.

The clauses that the Trade Practices Commission is concerned

about relate to price fixing and selling and not selling specific

goo d s .

This latest incident comes on top of a series of events which

shows that the Government is not handling airport tender

arrangements properly.

First, there was the granting of a new 3 year contract for the

duty free shops at Sydney International Airport without putting

the contract out for public tender.

2.

Secondly, when inwards duty free was introduced, the Government

handed out these lush contracts without putting them out for

tender.

Then there was the short-lived contract for removing duty free

dockets at Brisbane Airport, again handed out without putting the

contract up for public tender. This arrangement was cancelled when I raised the issue, but Senator Evans brushed it off as a

"misjudgment by management".

_Now we find yet. another piece of slack administration - apparent

breaches of the Trade Practices Act. .

The Government's conduct in awarding valuable contracts at Australia's airports is clouded with suspicion. As I have- said

several times, there should be a public enquiry into the whole

Government tendering process. This recent piece of evidence

confirms the need for such an enquiry.

N A BROWN

5 June 1988

For further information: Tel. (03) 842 1700 or (03) 439 2693

In reply pleane q u o l·

O A R 5969

BJD;RM

Trade Practices Commission

1 Jun« 1988

The Manager Federal Airports Corporation PO sox 6 3 MASCOT NSW 2020

Dear Sir

TENDER INVITATION No. NS 88

I have recently had brought to my attention the terms and conditions of the above tender for a gift shop/newgagency concession at Sydney airport.

2. Several of the clauses in the tender document appear to be in conflict with provisions of the Trade Practices Act· In particular I would draw your attention to paragraphs 6(2), 6(3) and 6(4) at page 64. Each of these clauses appears to be in

breach of Sections 46 or 48 of the Act. The reach of the Act as you would be aware, by virtue of section 2A, extends to the Corporation.

3. At this stage the matter is brought to your attention

for any comment, you may care to make.

Yours faithfully

uJ

GRAHAM PINNER Regional "Director

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Trade Practices Commission

20 September 1980

Dear

X roCer to your of about clausun

contained In tender documents for an Australiana/mternat tonal Cifit shop Issued by the Federal Airports Corporation (FAC).

2* Commission staff took the viow that- parayraphc 6(2) to

6(4) at page 64 of the tender document were in breach of sections 46/ 4? or 48 of the Trade Practices Act and put that concern to the FAC. As a result the FAC offered to delete paragraph 6(2) and amend paragraphs 6(3) and 6(4) to comply with the Act. After an examination of the re-drafted clauses the offer was accepted

and a decision taken to consider the complaint satisfied.

3.

Yours sincerely

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