The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC

Treasurer

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Weatherill must explain ‘free kick’ given to Spotless

Monday, 21 November 2011

Premier Weatherill needs to explain why the Labor Government gave a contract extension to Spotless worth more than $100 million over three years without going to competitive tender, Shadow Finance Minister Rob Lucas said today.

Evidence given to the Legislative Council Budget and Finance Committee this week by Department of Planning, Transport and Infrastructure Chief Executive Rod Hook confirmed that Spotless, which has an existing Facilities Management contract, has now had it extended by Cabinet to cover hospital and health facilities.

Spotless’ existing contract is to manage facilities for all agencies other than Health, Housing and SAFECOM in Metro Regions B and C whilst DPTI’s Building Management Division manages facilities in Metro Region A and Regional South Australia.

Mr Hook confirmed that the annual value of the Health contract was about $70 million and information provided to the Liberal Party is that Spotless’ share of that contract will be about $35-40 million.

Spotless’ original contract commenced in 2006 and has been extended two or three times through to 2015.

“Cabinet’s decision means Spotless will be given a $35-40 million per year Health contract for about three years to 1 January 2015 without having to go to competitive tender,” Mr Lucas said.

“The Liberal Party has been contacted by a representative of a major national company expressing concern that they had been excluded from ever bidding for the contract, and that Spotless had been given a very generous ‘free kick’.

“It seems incomprehensible that the Labor Government would sign a contract with a company like Spotless which wouldn’t require going to competitive tender if the scope of coverage was to be extended by more than $100 million for three years.”

Mr Hook told the Budget and Finance Committee:

“I think all the points you have raised here are valid queries that we will need to pursue. If there's an opportunity to go to the market I am happy to pursue that as our default position.”

(Legislative Council Budget and Finance Committee, 14/11/2011, p951)

However, he later told the Committee the Spotless contract had been extended to 1 January 2015.

“This decision to prevent a competitive tender process will potentially cost taxpayers millions of dollars extra,” Mr Lucas said.

“The Public Service Association has advised its members that about 280 of its employees are ‘in scope’ and affected by the Government’s decision .

“Mr Weatherill must now explain why his Government would sign a contract which gives a ‘free kick’ to Spotless and prevents a competitive tender process which might have saved taxpayers millions of dollars.

“With decisions like these it is not surprising Mr Weatherill is going to lose the state’s AAA credit rating, because he can’t balance a budget and our debt is ballooning out of control.”
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