Probe into hotel quarantine security contract

The Victorian Auditor-General is investigating whether probity rules were followed when the government awarded multimillion-dollar contracts to security companies to provide guards at quarantine hotels.

The second wave of COVID-19 infections in the state stemmed from an outbreak among guards and hotel staff at Rydges hotel on Swanston Street. An inquiry into the hotel program found private guards were poorly trained and the government’s infection control protocols were substandard.

Department of Jobs, Precincts and Regions secretary Simon Phemister at the Coate inquiry.Credit:

Much of the scrutiny has focused on the $30 million contract awarded to Sydney-based Unified Security, which was not on the government’s preferred list of security providers. Unified did the bulk of the security work and operated at Rydges, and evidence to the Coate inquiry into hotel quarantine showed government officials held serious concerns about how and why Unified was selected.

Auditor-General Andrew Greaves said in a letter last week that he was reviewing specific government purchases including the security contracts. “The review is examining a range of probity issues, focused on managing conflicts of interest, but also has regard to … financial regularity,” he wrote.

Jobs Minister Martin Pakula did not sign off on security contracts. Instead, this was done by Department of Jobs, Precincts and Regions secretary Simon Phemister, who, The Age can reveal, has the ability to spend up to $300 million without ministerial approval. Most other department heads can authorise only about $10 million.

Mr Greaves’ letter came in response to questioning from Opposition Leader Michael O’Brien, who told The Age Victorians “deserve answers about how Labor’s failures led to 801 deaths, economic devastation and a state in lockdown for 16 long weeks”.

Department of Jobs officials expressed concerns about probity in the days after the Unified contract was signed, evidence tendered to the Coate inquiry revealed. It was executed by a departmental director who placed Mr Phemister’s electronic signature on the contract on behalf of the secretary. Department officials were also worried about why Unified was chosen.

The inquiry heard that at 12.30pm on March 27 – as national cabinet was meeting to discuss hotel quarantine and about 12 hours before any government official said they contacted Unified – Unified’s boss emailed managers saying they “urgent[ly]” needed to complete infection control training by 2.30pm on the same day.

Other evidence reveals that a procurement official in the department wrote to colleagues on March 31, saying: “Need clarity on the rationale for going outside the [preferred panel of companies] … I understand there was an urgency to get things up and running quickly over the weekend but to have a non-approved firm providing security … off the back of some emails and phone calls presents significant risk to individuals involved and the department/government that is not easily mitigated.”

In April, a Department of Jobs director wrote to colleagues that the contract was “the last one we should do like this”.

“Either [Mr Phemister] needs to sign using PDF (it’s pretty simple) or we need someone to witness him telling us to put his signature on it. Because I’m not comfortable putting [Mr Phemister’s] signature on it, and then signing as a witness that he signed in my presence, without at least a verbal confirmation he wants to sign the contract,” he wrote.

Daniel Andrews taking the oath at the hotel quarantine inquiry in September.Credit:

A Department of Jobs official responsible for initially contacting Unified on the day national cabinet approved hotel quarantine admitted the company was chosen partly because it was Indigenous-owned and furthered the government’s desire to award work to Indigenous firms. The company was also chosen because of its immediate responsiveness on the day, Coate inquiry evidence shows.

In its submission to the Coate inquiry, the department said the Unified contract was “entirely consistent” with “a streamlined and flexible procurement process to facilitate an immediate response to a state of emergency”.

Evidence tendered to the inquiry also cast doubt on Premier Daniel Andrews’ claim he did not know about the decision to use private guards when he gave a press conference about 3pm on March 27. Mr Andrews, in his affidavit to the inquiry, said it was possible he was briefed on the contents of a policy document that said private guards would be used.

Evidence showed a senior policy adviser to Mr Andrews was talking to Department of Premier and Cabinet officials about “security” from 1.19pm that day. There is no suggestion the adviser had any role in the awarding of contracts.

The Victorian government declined to comment.

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