Hon. George Cash questions the Department of Housing and Works' (DHW) contracting practices, particularly regarding BGC Construction and potential monopolies. Hon. Tom Stephens defends the DHW's policy aimed at ensuring a competitive construction industry and protecting taxpayers.

AnsweredQoN 944Legislative Council
Asked
14 May 2003
Portfolio
Housing and Works

QuestionView source ↗

I refer to the non-residential building contracts awarded by the Department of Housing and Works in each of the financial years since 1998-99. (1) What was the residential building budget for the DHW in each of the financial years since 1998-99? (2) What was the value of non-residential building contracts for each of these financial years awarded to BGC Construction? (3) What percentage of the DHW residential building budget for each of these financial years was awarded to BGC Construction? (4) On what evidence does the minister base his claims of an emerging monopoly in construction work being carried out on behalf of the DHW? (5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS

AnswerView source ↗

I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(1) What was the residential building budget for the DHW in each of the financial years since 1998-99? (2) What was the value of non-residential building contracts for each of these financial years awarded to BGC Construction? (3) What percentage of the DHW residential building budget for each of these financial years was awarded to BGC Construction? (4) On what evidence does the minister base his claims of an emerging monopoly in construction work being carried out on behalf of the DHW? (5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(2) What was the value of non-residential building contracts for each of these financial years awarded to BGC Construction? (3) What percentage of the DHW residential building budget for each of these financial years was awarded to BGC Construction? (4) On what evidence does the minister base his claims of an emerging monopoly in construction work being carried out on behalf of the DHW? (5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(3) What percentage of the DHW residential building budget for each of these financial years was awarded to BGC Construction? (4) On what evidence does the minister base his claims of an emerging monopoly in construction work being carried out on behalf of the DHW? (5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(4) On what evidence does the minister base his claims of an emerging monopoly in construction work being carried out on behalf of the DHW? (5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(5) What percentage of available DHW work does the minister consider constitutes a monopoly? Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
Hon TOM STEPHENS replied: I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
I thank the honourable member for his question and, in the short time available to the Department of Housing and Works, it has provided the following information - (1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
(1) 1998-99, $121 million. 1999-2000, $141 million. 2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million. (2) The total value of contracts awarded to BGC Construction for non-residential building works that exceeded $1.5 million in the various financial years are as follows - 1998-99, $8.3 million. 1999-2000, $55 million. 2000-01, nil. 2001-02, nil - Hon Peter Foss: Looks like the policy was already there. Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
2000-01, $132 million. 2001-02, $125 million. 2002-03, $126 million.
2001-02, $125 million. 2002-03, $126 million.
2002-03, $126 million.
1999-2000, $55 million. 2000-01, nil. 2001-02, nil -
2000-01, nil. 2001-02, nil -
2001-02, nil -
Hon TOM STEPHENS: There was a policy. It was an informal policy of the former Government. The answer continues - 2002 up to 31 March 2003, $38 million. (3) 1998-99, 14.9 per cent. 1999-2000, 19.3 per cent. 2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent. (4)-(5) This policy was introduced to manage the risk to the taxpayer in the short and long term and to ensure a competitive industry in the short and long term. It was developed because industry players were advising me that they were considering not tendering for DHW work because of the perception of strong market dominance of a small number of contractors. Two members of the Master Builders Association indicated to me, as recently as last night, that they had withdrawn from tendering for DHW contracts because of the market dominance of a small group of contractors. Last night a presentation was made to me at Construction House when I went to meet with the MBA to discuss this issue among others. This is what I am trying to protect taxpayers from. The policy was developed to promote best practice throughout the industry by using the leverage of government jobs. How much of DHW money spent on large contracts should one or two players have? Is it 100 per cent of contracts? I have answered that question by saying no. Is it 50 per cent? I say no. I believe that the appropriate figure is 25 per cent and five contracts. Last night I had the opportunity of speaking to the MBA council and I advised it, as I advise members now, that if MBA members can convince me that there is a better way of achieving protection for the taxpayer or that there should be some modification to the policy, I am happy to consider it and will respond with an adjusted policy. Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts. Hon Norman Moore: At the very beginning. Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
2000-01, 18.5 per cent. 2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent.
2001-02, 13.6 per cent. 2002 up to 31 March 2003, 23.6 per cent.
2002 up to 31 March 2003, 23.6 per cent.
Finally, in last week’s debate in this Chamber on this matter, Hon Giz Watson mentioned material that is germane to the answer.. When she introduced the question of a policy restricting the percentage of school cleaning contracts that any one contractor can have, that was a direct parallel with the policy that I recently introduced into DHW. The further investigation that I have carried out since that debate on this matter shows that the Department of Education and Training has had a policy in place, which was agreed with the Master Cleaners Guild of WA, for six years - that is, it was introduced by the previous Government - whereby any individual bidder can win only 12.5 per cent of any new contracts.
Hon TOM STEPHENS: That is right. That policy was the result of concerns within the industry that the big players would win all the work and force the small players out of the market. I understand that both the industry and the Department of Education and Training are happy with this arrangement, which is aimed at ensuring a sustainable and competitive supplier base from which government can draw in its procurement activities. I understand that the previous Government put a similar arrangement in place for lawnmowing contracts, whereby contractors cannot win more than one contract in each district. It seems to me that the coalition Government, when in office, was capable of implementing sensible policies at times. Those were sensible policies. The new works policy does no more than apply the same principles. I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.
I will quickly conclude my remarks by saying this: last night I sat around a table with the Master Builders Association state council. Sitting around that table was a series of people who had come to see me privately to complain about the way in which the works policy was operating to the exclusion of their companies. Last night, as an association, however, those people collectively expressed disquiet about this new policy that tried to respond to their individual background complaints. Now I have brought in a policy, and their association has a series of legitimate queries and criticisms. However, even in the face of that series of legitimate queries and criticisms, a suggestion was still articulated at that table that there is a problem in the construction industry in Western Australia, and it has arisen as a result of market dominance by one or two companies in this field.

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