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Thursday, 8 February 2007
Page: 8

Mr Bowen asked all ministers, in writing, on 1 March 2006:

(1)   Must builders comply with the National Code of Practice for the Construction Industry to be engaged to undertake construction work for the department and agencies in the Minister’s portfolio.

(2)   Has the lowest cost tender for construction work in the Minister’s portfolio ever been rejected in favour of a higher cost tender because it did not comply with the code; if so, how many times has this occurred and what was the cost to the department or agency on each occasion.

(3)   Have any construction tenders been cancelled or delayed because no tenderer was compliant with the code; if so, in each instance (a) what projects were affected and (b) what costs were incurred by the 3988 No. 87—1 March 2006 department or agency, such as rent for alternative premises and other associated costs, as a result of the delay.

Mr Andrews (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) —The answer to the honourable member’s question, on behalf of Ministers is as follows:

(1)   Yes, the National Code of Practice for the Construction Industry has applied since its inception in 1998.

(2)   Tenders are evaluated on the basis of value for money. This requires a comparative analysis of all relevant costs and benefits of each proposal throughout the whole procurement cycle. Cost is not the only determining factor in assessing value for money. In addition, tenderers who do not meet the Australian Government’s mandatory tender requirements, including the National Code where relevant, are not eligible to be awarded tender contracts and therefore tendered prices are irrelevant.

(3)   I am advised that of all of the tenders let since the Code’s inception, there have been four projects which may fall within this category. The cost attributed to tender delays, although not necessarily as a result of the Code, are as follows:

(i)   Australia Post Sydney Gateway Facility. $860,000.

(ii)   Australia Post Melbourne Gateway Facility. $2,131,000.

(iii)   Fit out of a new electorate office for the Hon Bob McMullan, MP. $5,790 in rent per month for the new office between December 2005 and May 2006.

(iv)   The Department of Defence reports that one project has been delayed. The cost of this delay is not anticipated to exceed $200,000.