❓ Opposition questions the awarding of a road contract to Consolidated Constructions, citing concerns about the company's financial health based on outdated advice. The Minister defends the decision, highlighting the due diligence process and a more recent risk assessment.
AnsweredQoN 145Legislative Assembly
QuestionView source ↗
The minister told this House yesterday that she did not consider Consolidated Constructions to be an above average risk prior to awarding it a $7.6 million contract for the Marble Bar-Port Hedland road project in July last year based on independent advice from Priestleys in April that it had investigated Consolidated’s 2002 financials. (1) Does the minister concede that this independent advice was 20 months old when the final $1.2 million was paid to Consolidated Constructions in February this year? (2) Does the minister concede that the Priestleys advice showed a company in serious decline? (3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN
AnswerView source ↗
(1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(1) Does the minister concede that this independent advice was 20 months old when the final $1.2 million was paid to Consolidated Constructions in February this year? (2) Does the minister concede that the Priestleys advice showed a company in serious decline? (3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(2) Does the minister concede that the Priestleys advice showed a company in serious decline? (3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(1) Does the minister concede that this independent advice was 20 months old when the final $1.2 million was paid to Consolidated Constructions in February this year? (2) Does the minister concede that the Priestleys advice showed a company in serious decline? (3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(2) Does the minister concede that the Priestleys advice showed a company in serious decline? (3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(3) Does the minister concede that Consolidated Constructions’ equity position had slipped by 20.5 per cent and its working capital position was very low for the industry and in decline? (4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(4) Based on this information should Main Roads have put Consolidated Constructions on special watch after awarding the contract? (5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(5) Given that the minister has claimed that Consolidated Constructions rated higher than other companies competing for the Marble Bar contract, will the minister now table Priestleys advice on those competing tenderers? Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN replied: (1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
(1)-(5) It was the much vaunted Dun and Bradstreet, not I, that made the assessment in July 2003 - the time at which the contract for Marble Bar was let - that this company constituted only an average risk. It was Dun and Bradstreet. Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: You tabled the Priestleys advice, not the Dun and Bradstreet advice. Why did you table the Priestleys advice? Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: I will go through this once again so the member can understand. I did explain it yesterday. The process adopted by Main Roads is as follows: it pre-qualifies civil construction firms for significant projects. It has a hierarchy of pre-qualification whereby a company can be pre-qualified for a contract in excess of $30 million, a contract for between $20 million and $30 million, a contract for under $20 million, and so on. There is a series of categories. A company goes through the process of being pre-qualified so that it can then be put on a panel. This process has been in place since 1993. Every two to three years the panels are revised. The last revision of the panels was in July 2001. Consolidated Constructions was considered to be suitable for that category and therefore was included on that panel. Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: Based on the Priestleys report. Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: No, not based on the Priestleys report. It was based on a very extensive study that is done of all of the characteristics of the industry. It is from that class of companies only that Main Roads can seek tenders for a particular contract. In this case, Main Roads invited all of the companies on the panel to tender for this project, which was costed at around $7 million. As a result of that invitation, five companies lodged conforming bids. Out of those five companies, on the basis of its assessment, Consolidated Constructions was deemed to be the preferred proponent. At that point, to ensure that there is an updating from the pre-qualification point, the company must hand to Priestleys its last audited set of accounts. Priestleys then analyses that last audited set of accounts and makes a determination. It scores the company against a set of existing criteria. The criteria are quite elaborate. They include things such as company profile, company experience, technical capacity and financial capacity. There are four major areas, and each of those has a number of subcategories. That is a far more extensive process than any Dun and Bradstreet report. That was done, and that report was provided to Main Roads in April 2003. The contract was awarded in July-August 2003. We do the Priestleys assessment only on the company that we have selected as the preferred proponent. The member has been making a lot of noise about a Dun and Bradstreet report. In order to see whether the Dun and Bradstreet report would have made a difference, we actually obtained the Dun and Bradstreet reports for July 2003 on all of those companies. The point that I made was that the risk score for Consolidated Constructions was classified as average. Three of the other major companies were classified as either high or very high, and one was classified as below average. Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Mr B.J. Grylls: Was there a Priestleys report on those other companies? Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Ms A.J. MacTIERNAN: We have done the Priestleys report. I do not know whether the member thinks he has stumbled across something. I have acknowledged time and time again that in relying on an assessment of the last audited accounts, there may be a time lag. If we had done the update that the member wanted us to do - the Dun and Bradstreet update - the result would have been exactly the same, because that Dun and Bradstreet report characterised this company as being of only average risk. There has been a gross misrepresentation of the Priestleys report. The report did not show at all that Consolidated Constructions was a company in serious decline. In fact, it showed that the company’s sales revenue had increased, that it had turned a $3.2 million loss into an operating profit of about half a million dollars, that its current liabilities had improved, and that it had no secured debt whatsoever. The report therefore rated the company at a level beyond the pass mark that had been set for financial stability. Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Everyone can be brilliant in hindsight, but it was not until November that anyone had any idea that the company was in strife. At that point, before Main Roads would make any other payments, Main Roads decided to require the company to issue statutory declarations stating that all its subcontractors had been paid.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.