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Finance and Public Administration Legislation Committee
Department of Parliamentary Services

Department of Parliamentary Services

CHAIR: We will resume with the Department of Parliamentary Services. I welcome Mr Robert Stefanic, the Secretary of the Department of Parliamentary Services, Dr Dianne Heriot, the Parliamentary Librarian, and officers of the department. I thank the department for providing information in advance of these hearings in response to the recommendations in the committee's final report on its inquiry into the Department of Parliamentary Services, which was tabled in the previous parliament. The information has been circulated to the committee. Mr Stefanic, do you have an opening statement?

Mr Stefanic : No, Chair, thank you.

CHAIR: Dr Heriot, do you have an opening statement?

Dr Heriot : No, thank you, Chair.

CHAIR: Mr President, do you have an opening statement?

The President: I do. On Thursday, 1 December 2016 the Senate and the House of Representatives approved the group 2 security works to enhance security at Parliament House. I would like to advise the committee that this process has now commenced, with visible signs of this work now evident. The first stage of works will commence with the establishment of a temporary construction site on the northern front grass ramps. This will include the erection of temporary fencing and hoardings around these ramps in preparation for the construction of a new security fence or new security fences. The temporary fencing and hoarding will only be in place for the duration of the construction.

Access to the footpath along Parliament Drive, the forecourt, main public entrance and public car park will not be affected. Some periodic traffic delays can be expected on Parliament Drive when construction equipment is brought on to the site. Building occupants will be notified of any significant delays wherever possible. There will be no traffic delays during peak times when the houses are sitting or during the estimates period. While access to the grass ramps will be impeded for some time during this work, once the work is completed the public will continue to access a significant amount of the grassed area on the northern side of the building.

On completion of the work on the external perimeter at the front, work will then proceed backwards around the building with phase 2 covering the north-east and north-west corners, phase 3 covering the south-east and south-west corners and the final stage being the southern ramps. Senators and members may also notice work around the building commencing on the upgraded installation of additional CCTV cameras as well as other sophisticated electronic surveillance systems.

Can I again stress that the changes will not impede or change the way that the public enters the building. The public has always entered across the forecourt and through the front doors, and they will continue to do so after all of this construction of the group 2 works are complete. The public will continue to access the roof of this building in precisely the same way: passing through screening and going up to the roof internally via the elevators. Despite recent comment, the public has not been able to walk up the grass ramps and right over the top of Parliament House for some 11 years, since the existing fences were erected on security grounds in 2005. There will be no changes to the current arrangements for protest action on the authorised assembly area at the front of the building.

As the presiding officers, we see it as our responsibility to ensure the safety and security of all Parliament House occupants, including staff, the press gallery and the approximately one million people, of which 130,000 are schoolchildren, who visit Parliament House annually. The security enhancements balance the requirements to maintain the security of the building and its occupants with the continued open access to the many visitors who come to Parliament House each year. All security enhancements are the result of advice from our security agencies and based on many months of consideration and preparation. The presiding officers regularly receive advice on the security of Parliament House from many sources—particularly the Australian Federal Police, ASIO and the Attorney-General's Department—and that advice guides all decisions that we make on the security of this building and its occupants.

Finally, the design for the security enhancements was prepared by Guida Moseley Brown Architects, led by Mr Hal Guida, who is one of the moral rights holders on behalf of the late Romaldo Giurgola, the nominated architect for the Australian Parliament House. The perimeter security enhancements have been carefully designed to minimise visual impact while maximising public access. Following the completion of the work, the building will remain one of the most open and accessible in the world. I thank the committee for being able to provide that statement, and I understand the Speaker will be making a similar statement in the House of Representatives today. Thank you, Chair.

CHAIR: Thank you, Mr President.

Senator HINCH: President Parry, we almost got to this this morning, but I will repeat it for the benefit of people in the room who were not here this morning. In February, at the hearings, you were very cautious, and understandably so, about the total cost of the whole thing and the breakdown because you did not want the breakdown of the fence from other security measures taken within the building to be of any assistance to any possible terrorist attack. If we could grasp that the overall package is about $60 million, with the fence now under construction, is there any increase or planned increase in the costs, without giving an exact figure—maybe a percentage—of the fence?

The President: First of all, I will place on record the exact sum. The exact sum that has been allocated for the security works has been $126.7 million. I think it is important that the parliament has the total figure. It is the right of this estimates process to ascertain that. The breakdown of individual components, as you rightly indicated, I did not provide in February. You asked particularly about the fence. Let's say I answer that question and provide you with the fence cost and then someone else asks me about another component and I answer that. Eventually people will break down the individual components. If there is a lump sum left and that is allocated to only one other aspect, the total figure could indicate the quality of the material or what it might go towards. It is not that your particular question on its own would be an issue. If I could be guaranteed you would be the only one to ask me a question and we could not work this out by process of elimination, I would probably be inclined to answer, but I am not going to because it will open up the opportunity for people to work out individual pricing components for these elements. Once the works have been completed and we are not highlighting vulnerability, if you like, I see no reason why these costs cannot be produced, certainly to the committee in a private capacity, but it may be something we could place on record.

Senator HINCH: Have any aesthetic changes been made since the involvement of the intellectual property holders? Have any aesthetic changes been made since the opposition from people like myself and the Greens?

The President: No. There has not been any change.

Senator HINCH: So the way it was when it was announced late last year is the way it will be?

The President: And the private briefings I gave—I think you were present at some of those private briefings—no, it has not changed.

Senator BERNARDI: Mr Stefanic, I want to cover bit of old ground, if you do not mind. You will recall there was a potential conflict of interest which I raised and apparently an investigation was undertaken and an employee was sanctioned as a result of that inquiry. Do you know what I am referring to?

Mr Stefanic : Yes, I do.

Senator BERNARDI: What was the sanction?

Mr Stefanic : The sanction was a demotion and an official reprimand.

Senator BERNARDI: The demotion was from what grade to what grade?

Mr Stefanic : From a parliamentary executive level II to a parliamentary executive level I.

Senator BERNARDI: EL2 to EL1. Is that employee still with the department?

Mr Stefanic : Yes, they are.

Senator BERNARDI: Are they still in the same position as they were when they were demoted?

Mr Stefanic : No, they are not.

Senator BERNARDI: What position are they occupying now?

Mr Stefanic : Because of the nature of the role and the nature of the disciplinary action, the person was transferred to another branch.

Senator BERNARDI: So they are in another branch. Are they still in the EL1 position?

Mr Stefanic : Substantively, they are in an EL1 position—yes.

Senator BERNARDI: I love the term 'substantively'. Does that mean they are acting in another position?

Mr Stefanic : The person, I believe, is currently acting in a PEL—I will refer to it as an EL2 position.

Senator BERNARDI: Let me just get this right. They were sanctioned for a conflict of interest after an inquiry, moved to another area and now they are back to the old position. Is that right or have I missed something?

Mr Stefanic : I understand where your question is going, Senator. The PEL2 position resulted from a vacancy and it was felt appropriate that, given the range of skills, for a period of time that officer would be able to fulfil that role.

Senator BERNARDI: How long was it between being demoted to an EL1 position and being reinstated to the current EL2 position?

Mr Stefanic : I might ask Mr Cooper if he has some detail on the actual time frames. What I will say though is 'substantive role' is a very clear delineation. They are not appointed into that role; it is simply an acting period.

Mr Cooper : I do not have the exact time frame. It was a matter of weeks or perhaps a couple of months before the person was asked to temporarily take on additional duties at the higher level.

Senator BERNARDI: 'A matter of weeks' so it could be less than a month?

Mr Cooper : We would have to check.

Senator BERNARDI: Would it be three weeks or so?

Mr Cooper : That could be right.

Mr Stefanic : I have just been advised that the nominal occupant of the position is on personal leave and that is how that arose.

Senator BERNARDI: Are they still in their current position?

Mr Stefanic : Do you mean the nominal occupant?

Senator BERNARDI: By 'nominal occupant' are you referring to the person who was sanctioned and who is now temporarily filling that role?

Mr Stefanic : No, the nominal occupant is the position holder.

Senator BERNARDI: I am sure you understand this is that someone who has been sanctioned for a breach of the code of conduct—that we extracted at some length through here and through your internal processes—has been demoted, moved into a sideways area and then some weeks later was nominally restored to their previous status. It seems like a toothless disciplinary action to me.

Mr Stefanic : I would not call it a 'toothless disciplinary action'. The person has been a professional officer in that particular field for most of his career. Being demoted and moved was of itself a significant sanction or punishment. The matter was discussed whether it would raise concerns, and you have raised them today. But on advice, when we looked into the matter, we felt that there was no concern that it was inappropriate given it was for a temporary period of time and there was no substantive reinstatement to a higher level.

Senator BERNARDI: We are going to have to agree to disagree. Who did you get advice from, Mr Stefanic, before deciding that someone who had been in breach of the Parliamentary Service code of conduct and demoted as a result should be restored to the same pay and position?

Mr Stefanic : I had discussions with my fellow division heads before going down that path.

Senator BERNARDI: Do you still deem it appropriate that someone who has been sanctioned for a breach of the parliamentary code of conduct should be restored to their previous pay level only weeks after their demotion?

Mr Stefanic : I think the matter is about more than just money. There has certainly been a significant change in status of that officer and an impact on their career. I think that has ramifications that go well beyond the salary point.

Senator BERNARDI: I understand people have hurt feelings and various other things to go with that but, in the end, careers attach to the positions they hold within the Public Service. For someone to be demoted is significant; to breach the Parliamentary Service's code of conduct is significant. It was fleshed out in this committee. It just seems inappropriate to me. Maybe you are going to disagree with me but it seems inappropriate that that person was restored to the same level of position albeit in a parallel space. The court of public opinion will render its verdict.

I have some questions on different topics. There is an ongoing review into parliamentary security. Am I correct?

Mr Stefanic : There is a functional review into the provision of security services at Parliament House. It is the first review to be conducted following the increased presence of the AFP within Parliament House and the way the AFP and the Parliamentary Security Service operate together.

Senator BERNARDI: So it is not in respect to physical security at Parliament House; it is more about personnel security. Is that correct?

Mr Stefanic : Correct.

Senator BERNARDI: Will the review be considering arrangements in other parliament houses?

Mr Stefanic : Yes. As part of that review, a benchmarking study is being conducted against other parliamentary institutions.

Senator BERNARDI: In Australia?

Mr Stefanic : In other countries also.

Senator BERNARDI: How many people have been tasked with that review?

Mr Stefanic : I believe one DPS officer, but perhaps Mr Cooper might be able to provide more detail.

Mr Cooper : It is one, with another one or two officers supporting.

Senator BERNARDI: And they will be visiting other parliament houses. Can you tell me where?

Mr Cooper : The Australian parliaments have already been visited, and we had one officer travel overseas with an AFP counterpart. He visited Canada, the US and the UK; he visited those parliaments.

Senator BERNARDI: Once again, it comes back—this is not in respect of physical security as opposed to the coordination between the equivalent counterparts in state and federal jurisdictions. Is that right?

Mr Cooper : We cannot discount the physical security. It is about how we maximise our security resources. The way that other parliaments would engage their security personnel is, partly, related to the physical security arrangements that they have. So, yes, the focus is not on physical security; it is more about command and control, and the processes and procedures that they have in place.

Senator BERNARDI: What was the cost of the international travel?

Mr Cooper : I could probably find that out for you quite quickly, but I do not have it with me right now.

Senator BERNARDI: Sure. Senator Xenophon has asked whether it would be possible to get it whilst you are here in attendance. It is less important to me, if it is on notice, but if Senator Xenophon would like that—

Mr Cooper : I meant to say we could get it for you now. I think we can get it for you during this—

Senator BERNARDI: Okay. Is there an overall cost or budget for that review?

Mr Cooper : No, there is not. We will meet the costs in our—

Senator BERNARDI: When is it expected to be concluded?

Mr Cooper : We remain on track to complete the review in the second half of this calendar year.

Senator BERNARDI: What is the purpose, then, of it? There is an element of physical security. There is an element of coordination aspects. Is there any element about staffing?

Mr Cooper : That would be part of it, yes. It is timely to do this review. As the secretary said, this is the first comprehensive review of security arrangements that has been undertaken since the joint security model when the changes were made and AFP joined us up here, and with the security work. So it is a good time to now take a stocktake of the way we do things and look for better ways of doing business, more effective, more efficient ways of doing business.

Senator BERNARDI: Fair enough; you want to be more efficient and more effective. Does that, possibly, include any redundancies in the security area?

Mr Cooper : I guess it is hard to commit to something that we have not reached the end of, and reached the end of the review.

Senator BERNARDI: You are also in the process of recruiting though, aren't you?

Mr Cooper : That is right.

Senator BERNARDI: Hence, you are recruiting in the void of waiting for a review that might say things need to change.

Mr Cooper : In a perfect world you could stop doing one thing and then wait for the other. That is not the situation we are in. We are recruiting and we will not reach our nominal full capacity until the second half of the year.

Senator BERNARDI: Hence you are recruiting because you are not at the capacity that you need to be.

Mr Cooper : That is correct. And I would add that we have an attrition rate, in the PSS, of around 12 per cent. I think it is about 22 officers.

Senator BERNARDI: You are driving them away, are you?

Mr Cooper : No, they are all leaving for good reasons. We are probably training them so well that they have been snapped up elsewhere.

Senator BERNARDI: They have been recruited elsewhere. Is that right? There are no gotchas in this; I am just interested in the thinking. So you are understaffed, at the moment, in the security area.

Mr Cooper : That is correct.

Senator BERNARDI: That goes back to some other questions. Are we still having security doing double shifts—compelled to do double shifts, is how I would describe it.

Mr Cooper : They are not compelled. The number of double shifts is reducing. The number of extended shifts is reducing.

Senator BERNARDI: Sorry: the number of extended shifts?

Mr Cooper : This is where people work beyond their 7½ hours. We require people to work a few extra hours. We are certainly improving in that space. Towards the end of the year, we expect we will be fully compliant. We will reach the number that we need to reach.

Senator BERNARDI: Let's deal with the handcuffs again, Mr Cooper.

Mr Cooper : Let's go.

Senator BERNARDI: We have been through all sorts of cuts. Ultimately, we got to the point where handcuffs were used.

Mr Cooper : Handcuffs are part of the training—that is correct.

Senator BERNARDI: Right. How come it took so long to find this out? It went from February last year to finally April this year. There were three revisions of evidence.

Mr Cooper : Was there not a question on notice prior to April this year? I think while you were away we clarified it.

Senator BERNARDI: Yes, there was. But, in April this year, handcuffing changeover technique was restored in training. It says, 'This technique does not include the use of flex-cuff. Team leaders are the only staff trained in the use of flex-cuffs.' And then in June 2016, 'All PSS participated in flex-cuff training.' Then in April this year, 'Metal handcuffs were used in training.' It took a long time to get to the end result.

Mr Cooper : Yes.

Senator BERNARDI: I come back to this—a straight-up answer in the first place prevents us all covering the same ground again, and it prevents me saying, 'Can I rely on the evidence that is provided.' I say to you, Mr Stefanic, you are the head of this department: it is much easier to level with us, I think, in the first instance and, if there is a mistake, correcting the evidence as timely as possible saves us all heartache and pain.

Mr Stefanic : I appreciate the concerns. It certainly does pain me when those matters come up. I guess part of the issues the department has had in the past has resulted from integrity of the information provided. Unfortunately, sometimes there is an over-reliance on information that has been provided. More testing of that evidence is required. I will not say things are perfect, but we are certainly a work in progress.

Senator BERNARDI: Let's go to another information issue—the incident from 25 June 2016—which was an allegation of a supervisor allegedly threatening a PSS officer. Can you recall that—I raised it in a recent estimates; in fact, question on notice 38 dealt with some of it. Are you familiar with that, Mr Cooper? Did it go to you? In the time line provided, there was a suggestion that it was something like a month from when the incident occurred to when it was referred to HR. Is that correct?

Mr Cooper : It is important to understand that the incident occurred. It was a disagreement between a supervisor and an officer. The supervisor apologised the next day. Within a day or two of that, other line managers had an expectation that the matter had been resolved. Clearly, someone felt it was not resolved and they continued to raise the matter, but it was not a case where it was forgotten about that day or people chose not to progress it. Supervisors and officers have arguments in the workplace every day all over the place and all over Australia. We do not promote it, obviously; we wish it did not happen. But there are some judgements in this, and the judgements were being made by line managers that the matter had been resolved.

Senator BERNARDI: So when was this incident first referred or mentioned by anybody to HR?

Mr Cooper : I am checking.

Senator BERNARDI: I can refer you to your time line: in answer to question on notice 38, if you would like to have a look at that, it says the incident was referred to HR by security branch on 28 July 2016. You stand by that evidence?

Mr Cooper : I believe that is the case, Senator.

Senator BERNARDI: So would anyone have contacted HR prior to that in respect of that?

Mr Cooper : I do not know, Senator.

Senator BERNARDI: Really? So no-one would have sent you an email on 4 October, stating that they had contacted HR on 30 June?

Mr Cooper : If that is the case, that is not in this time—

Senator BERNARDI: No, I know it is not, but the DPS has been asked to provide a time line about the incidents that occurred. The information I have been given is that it was referred to HR, or HR was contacted about it, on 28 July, and yet I am suggesting to you that someone maintains they contacted HR before that day.

Mr Cooper : Who was that?

Senator BERNARDI: Do you really want me to refer the name?

Mr Cooper : I cannot answer your question without having the detail.

Senator BERNARDI: Okay. In an email and time line that was sent to you and Mr Giddings on 4 October 2016, HR was contacted on 30 June 2016, and sought advice from Graeme Henderson. Now, I am loath to give you the email that was sent to you, but I am sure you could get it.

Mr Cooper : I will have to revisit the time line. It may be that that email did not add anything further to the time line—it looks like an error from what you are telling me.

Senator BERNARDI: Yes. Perhaps you can have a look at it, but I would suggest it was sent by the Assistant Director, Security Operations.

Mr Cooper : I will take that on notice, Senator.

Senator BERNARDI: Thank you. You will be relieved to know I have only got one more thing to cover, briefly. Ms Croke, you had been appointed to review Mr Cooper's decision on 25 June 2016 incident. Is that correct?

Ms Croke : Yes, that is correct.

Senator BERNARDI: Have you completed that review?

Ms Croke : Yes, I completed the review in April and replied to the individual on 17 April.

Senator BERNARDI: Sorry, prior to the 17th?

Ms Croke : On the 17th.

Senator BERNARDI: On the 17th. And did you report that to the interested parties, namely the complainant and the complainee-is that right?

Ms Croke : I reported it to the complainant.

Senator BERNARDI: And what was the complainant's response?

Ms Croke : Sorry—

Senator BERNARDI: Did the complainant respond?

Ms Croke : Sorry, can I just correct that date, Senator? The date I replied to the complainant at the outcome of my review was 9 March. The complainant then subsequently emailed me again, and I replied—they emailed me again on 17 April, raising some questions about my review—to them on 19 April.

Senator BERNARDI: On 19 April. So, in effect—I do not need to know the specifics, but in generalities—what did the complainant respond to you with in respect of your report or your review?

Ms Croke : They were seeking to reopen some of the issues that I had reviewed, and my response to them was that I had conducted the review and they had a formal right of review under the Parliamentary Service Act. So when I wrote back on 17 April, I reminded them of their right of review.

Senator BERNARDI: So they have got a right of review of your review?

Ms Croke : They have a right to seek a review of my decision to the Merit Protection Commissioner.

Senator BERNARDI: And has that happened?

Ms Croke : They have since sought that review, and it has been passed on to the Merit Protection Commissioner.

Senator BERNARDI: And what is the status of that? Mr Stefanic, are you the person to respond to that?

Mr Stefanic : My latest information is that the Merit Protection Commissioner is still assessing the application for eligibility.

Senator BERNARDI: What is the general time frame for a response to that?

Mr Stefanic : I do not know. The Merit Protection Commission does not provide deadlines. It has a heavy workload, I understand.

Senator BERNARDI: In which department does the Merit Protection Commission reside?

Mr Stefanic : It sits underneath the Public Service Commissioner.

Senator BERNARDI: Okay, so I can ask them. I think that is all I need to know, unless Mr Cooper is volunteering something.

Mr Cooper : I am. I am volunteering the cost of the overseas work for Senator Xenophon and you. The trip was budgeted at $20,456, and to date the costs are at $16,700. I am just not sure if there are some invoices still to come in against that.

Senator XENOPHON: It seems within budget. Mr Stefanic, can I go to issues of tender number DPS15050, project number WM1840. This relates to the Parliament House security upgrade for group 2 works, electronic security systems upgrade. I have previously written to you about that—about a year ago, if you recollect. I note the original contract was for $22,087,776, but it now appears—as of 2 May this year—to be $31,613,809. Can you confirm whether that is correct?

Mr Stefanic : That is correct.

Senator XENOPHON: So across a relatively short period the contract went up by 43 per cent.

Mr Stefanic : There were some variations to the contract based on—

Senator XENOPHON: That is a lot of variations.

Mr Stefanic : additional work that we are requiring.

Senator XENOPHON: Forty-three per cent in one year is significant. Why have the variations been so significant in this case?

Mr Stefanic : I am not sure how much detail I can provide you with in relation to the specific elements of the project that have been incorporated into it.

Senator WONG: Leaving aside what the actual content of the variation was, which Senator Xenophon may wish to pursue, why were those matters, whatever you have added to the contract, not in contemplation at the time the contract was first let?

Mr Stefanic : I do not believe so, but I will confirm that.

Senator WONG: No. Why weren't they?

Mr Stefanic : I will clarify that for you.

Senator WONG: Do you understand the question?

Mr Stefanic : Yes, I do.

Senator WONG: There is a set of questions about what the variation is, but my question is a little different. Why did you not foresee that those matters would be required within the remit of the contract at the time that you go out to tender and engage in a contract, leaving aside what the content actually is?

The President: Chair, can I make an overarching comment about this?

Senator WONG: Sorry, Mr Stefanic, when you say you will take that on notice are you able to do that in this hearing?

Mr Stefanic : Yes.

Senator WONG: Thank you.

Senator XENOPHON: There are two aspects to that, as Senator Wong pointed out: why was not this foreseen and what were the actual content aspects?

The President: I just want to say, and I am not being specific about this contract, but the general nature of the security environment—and the things that are planned, replanned and then maybe that plan changes and there could be another plan because, once you develop a set of concepts about one area, you might find it overlaps into another area—that this has been a big frustration for Presiding Officers, for the security task force and indeed the Department of Parliamentary Services: that some things are just not foreseen when you commence the process, and also technology evolves in this space. I am just making an overarching statement that I have witnessed this firsthand: some of the changes in the design and some of the changes after you to settle on a particular contract. I am just saying that there are some parameters that are beyond the control of the DPS.

Senator XENOPHON: Respectfully, Mr President, there are issues of reasonable foreseeability here as to what could have been anticipated. This is a very significant variation, of 43 per cent in the course of 12 months, and it is something that I did approach Mr Stefanic with. I had some concerns before the tender was awarded. It was hotly contested between two companies, and I was concerned that there were issues with the way it was being done. Are you saying, Mr Stefanic, that the tender was defective?

Mr Stefanic : No. Those items were inserted subsequent to the tender process. They were, to my knowledge, not a feature of the tender.

Senator XENOPHON: That goes to Senator Wong's question: why wasn't it a feature of the tender? There could have been, perhaps, a fairer tender process because there was one South Australian based company with a lot of local content that missed out on this, which had expertise and were very keen to do it—they were not given an opportunity to provide a tender on that basis. How is it that we have an almost $10 million variation, a 43 per cent variation, on this contract?

Mr Stefanic : Without going into too much detail, one of the items that I will talk to, in generalities, involved a doubling of access control measures in certain parts of the building.

Senator XENOPHON: Wasn't that foreseen?

Mr Stefanic : No, because it was a decision-making process that needed to occur, based on risk.

Senator XENOPHON: Shouldn't that decision-making process, and the issue of risk, have been determined prior to the tender being finalised?

Mr Stefanic : I guess the key is that we are managing all elements of the project within the defined project budget. The tender proposal was so significantly cheaper than the other tenders, so there certainly was scope to increase elements of the project.

Senator XENOPHON: You know there was an attempt by the other party, the key contender, to put in a lower price?

Mr Stefanic : They were late to the party, Senator.

Senator XENOPHON: It was several million dollars cheaper and that was rejected by DPS.

Mr Stefanic : They were not rejected. There are clear procurement processes being followed and, had we not followed them, we would be having a different discussion here. It was after those tenders had closed that that tender was received, unsolicited.

Senator XENOPHON: But how could you not foresee that you needed those—what was it, double?

Mr Stefanic : Doubling of certain access control measures?

Senator XENOPHON: Yes, doubling of certain access controls. That is a pretty significant issue. Why wasn't that foreseen at the time the tender was put out?

Mr Stefanic : I will have to take that on notice.

Senator XENOPHON: You do not know?

Mr Stefanic : Off the top of my head, no.

Senator XENOPHON: Does anybody at the table know? What are we getting? Does anyone know?

Mr Cooper : It was quite some time ago and a number of us were either not here or very new in our roles.

Mr Stefanic : If I might ask Mr Yanitsas to come forward, he may be able to assist you.

Senator XENOPHON: While we are waiting for him, what will we get for the extra $9½ million?

Mr Stefanic : I guess they are the elements that I would rather not discuss in a public forum. I would like to talk to you privately, if you are interested. However, Mr Yanitsas might be able to assist.

Senator XENOPHON: It might be best—if the committee is so minded—to have a private briefing of the committee, given there has been such a cost blowout.

CHAIR: Potentially. But separate, obviously, from the estimates process.

Senator XENOPHON: Separate from the estimates process, of course.

Mr Yanitsas : Can you repeat your question please?

Senator XENOPHON: What are we getting for the extra $9½ million? There was a doubling of access controls, is that right? In broad terms, what are we getting for that? I am still trying to understand why that was not foreseen at the time of the tender? It raises issues as to whether the tender itself was fundamentally defective.

Mr Yanitsas : I will deal with your second point first. The access controls that were being applied to areas within Parliament House were provided as a result of a recommendation from the Security Upgrade Implementation Plan.

Senator XENOPHON: Which was when?

Mr Yanitsas : When was the plan?

Senator XENOPHON: Was it after the tender?

Mr Yanitsas : No. The Security Upgrade Implementation Plan had recommendations that drove the requirements in the tender. The scope that came out of some of those recommendations in the Security Upgrade Implementation Plan was short of what we ended up delivering in electronic access and controls. So what happened through the process of the security working group, the senior officials and the task force, was that further electronic access controls, or additional electronic access and control, needed to be applied to more areas of the precinct or within the precinct than first thought.

Senator XENOPHON: Why was that not obvious at the time of the tender? Are you saying it only arose as a result of a review following the release of the tender document?

Mr Yanitsas : Whether the recommendations that were put into the Security Upgrade Implementation Plan were adequate arose as part of workshopping with the security working group.

Senator XENOPHON: I am trying to understand. This is the tender document; it should give details of the scope of work.

Mr Yanitsas : The scope of work was limited, if you like, to the recommendations of the security upgrade implementation.

Senator XENOPHON: So it did not include the doubling of the access controls?

Mr Yanitsas : That came later.

Senator XENOPHON: Okay, it came later. Can I just get on notice, can I get a timeline of this. I am trying to understand why there was such a huge jump in the cost of these works. I am trying to understand why this was not foreseen. Because if there was at the time of the tender a review that was already underway, why was it not foreseen and taken into account?

Mr Yanitsas : I think what might be useful is that I will take on notice the additional scope, subject to—

Senator XENOPHON: And also the other issue—did both of those who tendered for it—the two main bidders, did they provide a scalable solution? Because often in these types of tenders you say, 'We can scale it up if you need it scaled up.' Can you take on notice whether both companies, both the successful and the unsuccessful tenderer, offered a scalable solution to this?

Mr Yanitsas : I can take that now, Senator. They certainly provided pricing for read units and things like that—card readers—such that that would be a straight multiplication.

Senator XENOPHON: I want to move on this because time is limited. I have asked some questions of this tender in the past. I have an interest in the Australian content of the bid. Can you tell me if any of the work on this now $31.6 million project is occurring overseas? Do you know whether any intellectual property or actual physical work being undertaken overseas?

Mr Yanitsas : I will take that on notice.

Senator XENOPHON: You do not know what the local content is?

Mr Yanitsas : I do not know off hand what the local content is.

Senator XENOPHON: Where does the intellectual property reside?

Mr Yanitsas : For the products we are buying?

Senator XENOPHON: Yes.

Mr Yanitsas : I will take that on notice and come back to you.

Senator XENOPHON: Has there been any overseas travel of DPS staff involved in this particular tender?

Mr Yanitsas : No, there has not.

Senator XENOPHON: No? That is okay. Now, this was a hotly contested tender. At the time of the tender, can you tell us, now that it has been done and dusted, what was the nearest bid to the BAE's tendered price? Can you tell me that?

Mr Yanitsas : Value for money in tenders is all about services received for price put forward.

Senator XENOPHON: You are familiar with the new procurement rules from 1 March, are you?

Mr Yanitsas : I am, but when we were evaluating this tender, I can say that there were two front runners, BAE and the other tenderer that you have referred to, and it was believed at the time by the evaluation committee that BAE offered the Commonwealth the best value for money under the circumstances for the services and products they were providing.

Senator XENOPHON: But since then it has gone up $9.5 million in price.

Mr Yanitsas : It has gone up $9.5 million, but I will say that that is not a result of something changing within the contract. That is the result of scope being added to the contract, and scope that was able to be accurately—

Senator XENOPHON: If you could provide on notice details of how it was that that scope was added to the contract, and on what date the nature of the scope. And it goes to the question that Senator Wong asked—

Mr Yanitsas : I will take it on notice.

Senator XENOPHON: earlier, about whether this could have been foreseen. I just want to know the completion date for this work. When was it in the tender? Is it on time? When was it due to be completed?

Mr Yanitsas : It was due to be completed fourth quarter this year. There is some slippage. The slippage is mainly attributed to the increased scope.

Senator XENOPHON: Right. So the first quarter of next year, or when?

Mr Yanitsas : The new date is first quarter next year.

Senator XENOPHON: I may put forward some questions on notice, and I may have to pursue it further through FOI and the like. Has anyone asked you about Aussies yet?

Mr Yanitsas : No.

Senator XENOPHON: Well, it would not be estimates if we did not ask you about Aussies. There was an article in The Canberra Times in the Public Sector Informer, in March 2017. Did you, Mr Stefanic, provide quotes to that journalist? Did you brief that journalist?

Mr Stefanic : I cannot recall.

Senator XENOPHON: You do not speak to journalists that often, do you, or provide briefings?

Mr Stefanic : DPS provides comments to the media all the time.

Senator XENOPHON: No, I am talking about you though. How often do you brief journalists and background journalists?

Mr Stefanic : I speak to journalists hardly ever and I did not speak to that particular journalist.

Senator XENOPHON: Did you provide background for that article in the Public Sector Informant on 7 March 2017?

Mr Stefanic : I do not believe so.

Senator XENOPHON: Please take that on notice. One issue that has been raised goes to providing turnover details. Has the department ever written to Mr Calabria asking for turnover figures? I think you have said publicly you asked for turnover figures.

Mr Stefanic : My understanding is that we have.

Senator XENOPHON: Could you please take that on notice because I think Mr Calabria said he has never actually received a formal request for turnover figures. Further to that, do you see this as a little different from, say, a Westfield shopping centre, where turnover is regularly asked for in the context of the trading of various stores? This is a case where DPS is a direct competitor with their businesses now that you are running the catering, the cafe and the cafeteria. Do you see that as a slightly different set of circumstances to the circumstances in which Westfield would ask for turnover figures? There is a potential conflict here, is there not? Is there a clear conflict between the two?

Mr Stefanic : If I could start with the conflict issue first, we are not running a private business enterprise. There are no shareholders. There is no-one aiming to generate a profit. What we are simply seeking to do is achieve an appropriate return on Commonwealth assets. That is the main objective.

Senator XENOPHON: It does not address the conflict issue though.

Mr Stefanic : There is a conflict, but DPS is seeking to run if possible a cost neutral operation. That is our objective. Our objective is not to generate a profit from the entire food, beverage and retail space.

Senator XENOPHON: You are running the food and beverage businesses now in those parts other than Aussies. Is that correct?

Mr Stefanic : That is correct.

Senator XENOPHON: Therefore you are asking for turnover figures and you can glean from those, presumably, a whole range of information about that business. Does that not give you some sort of competitive edge?

Senator WONG: We go to someone else at 2:30, and the opposition would like the opportunity to ask questions before 2:30. We will have to require the department to come back.

Senator XENOPHON: I will leave it at that and I will put some questions on notice.

Senator WONG: They are going to have to come back.

CHAIR: They are. Since you wanted to ask questions up until 2:30, we will go to you, Senator Wong.

Senator WONG: I would like to talk about the disclosure of mobile telephone numbers, please. Who do I ask questions of?

Mr Stefanic : You can ask either myself or the Acting Chief Information Officer.

Senator WONG: It was reported on 20 March that mobile telephone numbers of many parliamentarians and their staff were disclosed publicly. Senator Farrell, my colleague, asked some questions on notice, which I am going to be asking questions from so you might want to go there. In question on notice 89, you were asked about when you first became aware of it and how you first became aware. You answered that DPS first became aware at 12:20 on 20 March. I understand the answer to be only by virtue of that journalist contacting you.

Mr Stefanic : That is correct.

Senator WONG: How long had the data actually been online?

Mr McKenzie : The information had been published on the APH website on 22 December 2016.

Senator WONG: It was 22 December?

Mr McKenzie : That is correct.

Senator WONG: So it was three months?

Mr McKenzie : More or less.

Senator WONG: It was two days short of three months.

Mr McKenzie : Yes.

Senator WONG: How is it possible you had people's personal and private mobile numbers published, put online and nobody noticed for three months?

Mr McKenzie : For a little bit of background, the problem occurred with the vendor who produced the reports. They have been producing the reports since 2014, providing the reports in the same format. That contract involves redacting the phone number and the person's name from those reports. Previously, the vendor had completely removed the information. In this case, the programmer at the vendor site tried to redact information in the most current set of reports by setting the text to white on a white background, so, when they appeared on the website, if someone were to browse to them, open up the report—

Senator WONG: Yes—they highlighted it in a different colour and it was visible. Correct?

Mr McKenzie : You had to highlight the information, you had to cut and paste it into another document and change the font colour. It was not immediately visible to the naked eye. It required a significant amount of manipulation to show up the information, but it was there in white text on a white background.

Senator WONG: For three months.

Mr McKenzie : For three months.

Senator WONG: We do not know who else had them?

Mr McKenzie : We know roughly the number of downloads that occurred from our website. The complicating factor is that, as we reported, Google's caching engine had cached the document. So, although we can tell the number of downloads of the document from our own site, we are not able to tell the number of downloads that would have occurred from the Google cache engine.

Senator WONG: Which you have now dealt with as well?

Mr McKenzie : Yes, they have been removed from the Google cache engine and they—

Senator WONG: When did that happen?

Mr McKenzie : That happened on the same evening, on the 20th. They were removed from Google on that night.

Senator WONG: Before this information goes up, do you have any systems in place to check these—are they reports?

Mr McKenzie : They are PDF documents.

Senator WONG: PDF documents—to ensure that the confidential information has, in fact, been redacted?

Mr McKenzie : We did and we do. They are checked and have been checked, but our checks did not extend at the time in the way that they do now, to look for information that is not visually available in the report. Now we have a process to check that there is no white text on a white background. We also run a number of other tools over the document to make sure there is no information metadata or so forth that could be gleaned from reports that is not visible to the naked eye.

Senator WONG: It is not only the white on white. There are other ways in which information can be retrieved off a PDF that do not require a visual cue.

Mr McKenzie : Correct.

Senator WONG: Are you confident you have considered the full gamut of those?

Mr McKenzie : We are now, but those checks were not in place prior; it was only a visual inspection.

Senator WONG: What action has been taken with respect to the contractor?

Mr McKenzie : We have been in contact with the contractor, and the contractor has also put in controls from their side, so, in any future reports, management sign off from their side as required to make sure that the coding that is being used will completely remove the information from the document.

Senator WONG: Who is the contractor?

Mr McKenzie : The contractor, as reported, is Telco Management.

Senator WONG: Going through the questions on notice, you discovered it, the President was contacted within about half an hour—correct?

Mr McKenzie : That was by the secretary, but, yes, that is correct.

Senator WONG: At that immediate point, you say you notified other key stakeholders. Who are they?

Mr McKenzie : In terms of other key stakeholders, there were meetings that were held—

Senator WONG: No. I want to find out what occurred and why there was a delay in telling parliamentarians. In questions on notice 91 and 90, you find out at 12.20. When was the secretary contacted? Did you get contacted immediately, Mr Stefanic?

Mr Stefanic : The journalist had contacted one of our media advisers and the media adviser immediately informed me. I was the second person in the department to become aware of it.

Senator WONG: Whom did you first inform?

Mr Stefanic : My first contact was with the CIO and then, shortly thereafter, with the Presiding Officers.

Senator WONG: Which makes sense. I think the President was called at about 10 to one. Correct?

Mr Stefanic : Correct.

Senator WONG: In answer to Senator Farrell's question, question on notice No. 91, you say you went through this series of actions—the notification of key stakeholders. Was there anyone else, say in the next hour or so, who was contacted apart from those you have just identified?

Mr Stefanic : Sorry, could you repeat the question, Senator?

Senator WONG: You described the action of notification of key stakeholders; that is your answer to question on notice 91. You have explained to us that this included the two Presiding Officers. Who else was a key stakeholder?

Mr Stefanic : Our executive team, the division heads, were made aware of it immediately. I cannot recall off the top of my head who was contacted next. I believe that was the extent of my communications with people.

Senator WONG: Were you acting CIO that time, Mr McKenzie?

Mr McKenzie : Yes, I was.

Senator WONG: It is bit of a problem, isn't it?

Mr McKenzie : The notification, as the Secretary indicated—

Senator WONG: No; I am talking about the disclosure of people's private mobile phone numbers. It is problematic.

Mr McKenzie : Absolutely.

Senator WONG: Especially as it was available, essentially, for three months.

Mr McKenzie : Yes. As we have said, we know the number of downloads from our site. How many people knew it was there is unclear, given that the information was not visually available.

Senator WONG: How many downloads were there?

Mr McKenzie : From the APH website—given that each parliamentarian has an individual file—there were 980 files downloaded. So that is 236 parliamentarians, each with an individual file; 980 were downloaded and those downloads came from 88 unique IP addresses. But what we can see is that the largest number—that being around about 660—were downloaded by three IP addresses, or three locations. Factoring in from that, it would appear that three IP addresses, or three locations or individuals, had pretty much the whole set, and there were a smattering of other—

Senator WONG: Do they have the whole set of phone numbers?

Mr McKenzie : That is correct.

Senator WONG: There were 980 downloads.

Mr McKenzie : 980 files were downloaded.

Senator WONG: Can you tell me who made the decision not to advise parliamentarians for some seven hours?

Mr McKenzie : There was not any decision made to delay that. It was a process that we were running internally to craft the communication. As you can imagine, Senator, it was a very important communication and it went through a number of internal approvals within DPS to assure—one thing I wanted to make sure of is that we released information that informed people what had happened, but I also did not want to release any information that would result in any security issues beyond what had already occurred. So the time period—there was not a delay, we were working away to get the email out as quickly as possible. I was also cognisant of the fact that whatever I did send out may have ended up in the public domain, and hence I was being very careful about what was put in there, from a security perspective. That was borne out, in that large verbatim parts of the email did appear in the press.

Senator WONG: But with respect, making sure of the accuracy of your quotes in the press possibly might have been less important than making sure people were aware that their mobile numbers were accessible.

Mr McKenzie : Yes; although, as I said, I also had the responsibility to make sure that anything that I released did not further compromise the situation any more than it already had been.

Senator WONG: I assume there have had to be a number of phone changes as a result.

Mr McKenzie : There have been some. We have offered private briefings to the Chief Opposition Whip in the Senate and the Chief Government Whip in the Senate, and also to any crossbench senators that are interested. We are providing that information at those briefings but, again, I would not release the number of changes that we have had in a public forum, because it talks to—

Senator WONG: I did not actually ask you that question.

Mr McKenzie : I am sorry; if you could just repeat the question, Senator.

Senator WONG: I just said, there have been—I have not asked you the number.

Mr McKenzie : There have been some.

Senator WONG: The contract with Telco is worth about 2½ thousand a month, is that right?

Mr McKenzie : That is correct.

Senator WONG: Have you considered terminating the contract?

Mr McKenzie : We have had a number of internal discussions looking at a number of options. At the moment, given that the vendor has provided good service since 2014, given that they have a significant number of other contracts with other government agencies and there has been no issue, given the cost-effectiveness of the contract and given that that $2,500 also covers a range of services to the parliament—across all the parliamentary departments—not just this one particular instance, we believe it is still good value for money and we believe that sufficient controls are in place to avoid a recurrence. At this stage, we are not considering—

Senator WONG: But, you do not have the expertise in house?

Mr McKenzie : We would have the expertise in house but, given the economies of scale that the vendor has, we would not be able to do it anywhere near the price that they are offering.

Senator WONG: Senator Farrell in questions on notice 94 and also 95 asked about how many current and former members and senators had their numbers disclosed. You have refused to answer that for security reasons. I am not sure I agree with that. But are you able to give me a total number of telephone numbers disclosed? And, if not, I want to understand what the security rationale is. I am not asking for disaggregation. I am asking for an aggregate figure.

Mr McKenzie : The reason we are not disclosing it is that it goes to the attractiveness of the dataset. Although we have removed it from our website and we have removed it from the Google cache, there is a chance—the internet being the internet—that the information may turn up some time in the future.

Senator WONG: I think we should all just assume it will.

Mr McKenzie : So the reason for not disclosing the number would be that for someone who may be listening in a public forum it could determine how attractive it would be to go looking. I am more than happy to provide that information to any senator outside of a public forum.

CHAIR: As previously agreed by the committee we are now going to take a break from the Department of Parliamentary Services so that we can hear from the Independent National Security Legislation Monitor, who have a flight to return to Sydney. Also, Senator Michaelia Cash's agency has given her commitment to other committees. I anticipate that we will resume with DPS at 5.30 pm. We look forward to having you then, but please bear with us as this will be a little bit messy from here on in. The Digital Transformation Agency was due to come on at 5.30 pm. We have now moved them to first thing tomorrow morning, which will hopefully allow us to get through the rest of the program before the end of the day.

The President: Chair, just clarifying, are you saying DPS should be back at 5.30 pm or should be on standby prior?

CHAIR: I anticipate it will be about 5.30 pm, but it could be earlier.