❓ A WA parliamentary question on notice investigates the awarding of a construction contract to Consolidated Construction, focusing on pre-qualification assessments, financial oversight, and the involvement of Carr Civil. The questions suggest potential irregularities in the process.
AnsweredQoN 93Legislative Assembly
QuestionView source ↗
(1) What procedures were undertaken by the Main Roads Department when awarding Consolidated Construction Contract No. 706/02?
(2) Will the Minister detail each step taken, specifically relating to the awarding of this contract?
(3) Did Consolidated Construction pass all areas of the pre-qualification assessment?
(4) If not, which areas did they not pass?
(5) Why were Consolidated Construction’s out of date financial statements accepted by the Main Roads Department?
(6) Who accepted this information as true and correct?
(7) Did this person accept the information as an authorised representative of the Main Roads Department?
(8) What was Carr Civil’s involvement with Consolidated Construction?
(9) How much of the Consolidated Construction contract did Carr Civil receive?
(10) As the major beneficiary of this contract, why were they not assessed by the Main Roads Department?
(11) What is the company relationship between Consolidated Construction and Carr Civil?
(12) Is Carr Civil a subsidiary of Consolidated Construction?
(13) Do these two companies have directors in common?
(14) Who chose not to assess the capabilities of Carr Civil?
(15) Did this person have the necessary authority to make this decision as a representative of the Main Roads Department (MRD)?
(16) Why did the Public Transport Authority breach its own financial assessment policy?
(17) Why did the Public Transport Authority (PTA) not conduct a further financial check on Consolidated Construction?
(18) Who authorised this oversight?
(19) Was this person an authorised representative of PTA?
(20) What were the errors in judgement made by representatives of both the MRD and the PTA?
(21) Why was no responsibility taken for the outstanding sub contractors debts by either the MRD or the PTA when so many errors of judgement were made by authorised representatives of both organisations?
(2) Will the Minister detail each step taken, specifically relating to the awarding of this contract?
(3) Did Consolidated Construction pass all areas of the pre-qualification assessment?
(4) If not, which areas did they not pass?
(5) Why were Consolidated Construction’s out of date financial statements accepted by the Main Roads Department?
(6) Who accepted this information as true and correct?
(7) Did this person accept the information as an authorised representative of the Main Roads Department?
(8) What was Carr Civil’s involvement with Consolidated Construction?
(9) How much of the Consolidated Construction contract did Carr Civil receive?
(10) As the major beneficiary of this contract, why were they not assessed by the Main Roads Department?
(11) What is the company relationship between Consolidated Construction and Carr Civil?
(12) Is Carr Civil a subsidiary of Consolidated Construction?
(13) Do these two companies have directors in common?
(14) Who chose not to assess the capabilities of Carr Civil?
(15) Did this person have the necessary authority to make this decision as a representative of the Main Roads Department (MRD)?
(16) Why did the Public Transport Authority breach its own financial assessment policy?
(17) Why did the Public Transport Authority (PTA) not conduct a further financial check on Consolidated Construction?
(18) Who authorised this oversight?
(19) Was this person an authorised representative of PTA?
(20) What were the errors in judgement made by representatives of both the MRD and the PTA?
(21) Why was no responsibility taken for the outstanding sub contractors debts by either the MRD or the PTA when so many errors of judgement were made by authorised representatives of both organisations?
AnswerView source ↗
Answered
16 August 2005
Responded by
Minister for Planning and Infrastructure
Response time
48 days
(1) Main Roads called for tender submissions in early 2003 from suitably prequalified contractors for Contract 706/02. (2) A two-stage selection process was used in the award process for Contract 706/02. This included the following steps: · Call for Tender Submission from Pre-Qualified Contractors · Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(2) A two-stage selection process was used in the award process for Contract 706/02. This included the following steps: · Call for Tender Submission from Pre-Qualified Contractors · Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Call for Tender Submission from Pre-Qualified Contractors · Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(2) A two-stage selection process was used in the award process for Contract 706/02. This included the following steps: · Call for Tender Submission from Pre-Qualified Contractors · Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Call for Tender Submission from Pre-Qualified Contractors · Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Selection of Preferred Tenderer · Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Assessment of Management Plans · Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
· Finalisation and Award of Contract (3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(3) Consolidated Constructions were appropriately prequalified for the works required under Contract 706/02. This company had also successfully undertaken a number of projects for Main Roads with a combined value exceeding $35 million. (4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(4) Not applicable. (5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(5) As required as part of the prequalification system, in April 2003, Consolidated Constructions lodged its audited and consolidated financial statements for the last financial year. These were assessed on behalf of Main Roads by an external consultant Estill and Associates, and an accountant, Priestley Charters Accountants in accordance with the Terms and Conditions of Main Roads' prequalification system and deemed to meet the financial capacity requirements of the prequalification system. (6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(6) The assessment was undertaken on behalf of Main Roads Western Australia by recognised consultants Estill & Associates and Priestley Chartered Accountants. (7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(7) Refer to (6) above. (8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(8) Carr Civil was a sub contractor to Consolidated Constructions. (9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(9) Main Roads has no direct knowledge of the commercial relationship between the contractor and any of its sub contractors, nor is it required to have such knowledge. (10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(10) There was no requirement to assess the contractor's sub contractors. However, Main Roads expected that Consolidated Constructions intended to engage sub-contractors as is the norm. (11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(11) Refer to (8) above. (12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(12-13) This is not a matter Main Roads has had cause to investigate. (14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(14) Refer to (10) above. (15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(15) Not applicable. (16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(16) In practice a suitable guarantee is usually a bank guarantee or insurance bond for 10% of the value of the contract before contract work commences. During contract negotiations with Consolidated Constructions the provision of cash retentions was substituted for a guarantee. This is not uncommon. Some companies have a policy not to provide guarantees because of the cost, and the effect of tying up of borrowing capacity, particularly in the early stages of a medium to long term contract. Smaller businesses sometimes cannot access a Bank Guarantee. The relative risk and cost/benefit of different securities is weighed up by the contract negotiating team in consultation with the PTA's Finance Division where appropriate. Any decision to vary the security is recorded and approved. In the PTA's latest Draft Procedure for Financial Assessment of Tenderers, practical reality will be reflected by adopting the words, 'securities shall be obtained in the form of a bank guarantee or retention monies'. (17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(17) The policy guidelines dated January 2002 and current until 1 July 2003 stipulated that "The finance Division must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, say within the last twelve months and it may not be necessary for an assessment to be conducted" This guideline was applied to Consolidated Constructions in the pre-qualification process that concluded in June 2003. Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
Current policy procedure, effective from 1 July 2003 states that "The Finance and Contracts Directorate must be requested on each and every occasion for a ruling on the need to conduct a financial assessment of preferred tenderers for respective contracts. There may be occasions where an assessment has recently been undertaken, for example within the last three months and it may not be necessary for an assessment to be conducted". This policy procedure was made more stringent than the previous guideline. This increased prudence recognised that 12 months could be too long a period in some circumstances. Furthermore the change reflected experience with the New MetroRail tendering process, where large and long term contracts (eg Package A construction works from Narrows Bridge to Mandurah $300M) would be undertaken by complex Joint Ventures. It was recognised that the period from pre-qualification to contract award was considered a significant risk in such cases. In practice PTA will generally not carry out a detailed updated financial assessment in between prequalification and award of contract which is often a period of three to six months unless there are particular circumstances applying to a particular contract that indicate the risk has changed in this period of time. (18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(18-19) The PTA does not consider there was an "oversight", but does acknowledge that there was a weakness in not documenting and filing discussions of risk assessment and judgements. Consolidated Construction's financial assessment, carried out on 11 March 2003, resulted in this company being included on the panel of pre-qualified tenderers in June 2003. Only two tenders were received from the panel members for both Armadale and Gosnells. Consolidated Constructions were selected as preferred tenderer for both contracts following standard policy and procedure value for money criteria. A probity auditor was involved in all parts of the process. The recommendation of Consolidated Constructions as the preferred tenderer was approved by the Chief Executive Officer on 16 September for both Gosnells and Armadale. The approved recommendation included the following statement, "an assessment of the Tenderer's financial status was undertaken as part of the EOI process and will be checked before a contract is entered into." The intent was to check the relative risk including any new knowledge and make a decision as to the need to seek an updated financial assessment. There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
There was not a formal financial assessment check prior to the contract award. The period from 11 March 2003 to September/October 2003 was at the limit of the typical three to six months period between prequalification and contract award that would not generally give rise to a detailed updated assessment, except in higher than usual risk scenarios. Discussions on the financial risks associated with the Consolidated Constructions took place prior to signing the contracts. It was concluded further checks were not required. These discussions and the conclusion were not documented which is a weakness that requires attention. To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
To this end, action taken to address this weakness was to include requirement for documentation and endorsement in the PTA's Procurement Procedures Manual which states that ..."if the Tenderer has been financially assessed in the past three month period, or the financial information has not changed, and the total contract value is similar to the total contract value when the Tenderer was previously assessed, a financial assessment is not required. In this instance, a file note shall be made and endorsed by the PTA's Contracts Manager". (20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(20) MRWA: There was no error of judgement in awarding the contract. PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
PTA: The PTA does not consider that there were significant errors of judgement. (21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
(21) Refer to (20) above. PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
PTA: The PTA did facilitate the utilisation of almost all sub contractors by the subsequently appointed contractors. The process of liquidation is the legal remedy for unsecured creditors. MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
MRWA: In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
In early 2004 following the collapse of Consolidated Constructions, State Cabinet endorsed a measure whereby subcontractors who were engaged on the Marble Bar Road project and had been financially impacted by that company's collapse where allocated an additional 5% Regional Business Preference when tendering for works managed by Main Roads. This measure directly assisted a number of local sub-contractors engaged in extensive road repair works following Tropical Cyclones Monty and Fay.
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.