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Thursday, 16 August 2012
Page: 5707

Defence: Middle East Area of Operation Contract

(Question No. 1935)


Senator Johnston asked the Minister representing the Minister for Defence, upon notice, on 27 June 2012:

With reference to the Middle East Area of Operation (MEAO) aviation contract with Adagold Aviation Pty Ltd:

(1) In comparison to the previous contract, how much has been saved, detailed per corresponding month, since November 2010.

(2) What are the total savings realised on the contract since 22 October 2010.

(3) How much has been paid to the contractor since November 2010 to conduct and operate the service, detailed per month.

(4) How much has the department spent on fuel, lubricant and other costs since November 2010 to conduct the service, detailed per month.

(5) What is the status of the Australian Federal Police investigations that were initiated in relation to this contract and the previous MEAO contract.

(6) Will the MEAO contract be advertised with a proper and transparent process when the current contract expires on 21 October 2012, and what action has been taken to date in relation to this matter.


Senator Bob Carr: The Minister for Defence has provided the following answer to the honourable senator’s question:

(1) Contract Savings since 2010 are;

(a) For the period 23 November 2010 to 22 November 2011, estimated savings were $13,174,695 or 22% in comparison to the second preferred tender response.

(b) For the period 23 November 2011 to 30 June 2012, the estimated savings were $9,617,358 in comparison to the second preferred tender response.

(2) The total estimated savings in the 19 months since contract commencement and 30 June 2012 is $22,792,053.

(3) Amounts paid to the contractor since 2010 are listed below. These figures exclude the cost of fuel, which is billed and paid separately:

(a) For the period 23 November 2010 to 22 November 2011), 68 routine weekly flight missions were undertaken, with approximately $28,288,432 paid to the contractor.

(b) For the period 23 November 2011 to 30 June 2012, 46 routine weekly flight missions have been undertaken with approximately $19,371,704 paid to the contractor.

(4) The total amount paid to the contractor in the 19 months since contract commencement and 30 June 2012 is approximately $47,660,136.

Amounts paid for fuel since 2010 are listed below.

(a) For the period 23 November 2010 to 22 November 2011, the cost of fuel for the 68 routine weekly flight missions is estimated at $19,422,568.

(b) For the period 23 November 2011 to 30 June 2012, the cost of fuel for the 46 routine weekly flight missions is estimated at $13,138,796.

The total cost of fuel in the 19 months since contract commencement up to 30 June 2012 is estimated at $32,561,364.

(5) The Australian Federal Police (AFP) did not undertake an investigation in relation to the 2010 contract process.

Defence referred allegations of criminal conduct to the AFP in September 2010 in connection with the 2005 contract. In August 2011, the AFP wrote to Defence and advised that it had completed its investigation into the 2005 contract and did not identify sufficient evidence to commence a prosecution against any person. Consequently the case has been finalised.

(6) Defence recently determined to exercise the first extension option which will see a continuation of the service under the current contract until 21 November 2013. The decision making process took into account contractor performance and the considerable cost savings to Defence. There was no requirement to re-tender (advertise) the service as the existing contract makes provision for up to two extension options of one year each at the discretion of Defence.