Updated
The Department of Home Affairs has defended its
handling of multi-million-dollar contracts for security and other
services on Manus Island, arguing Australia was forced to step in
quickly after Papua New Guinea pulled out.
Key points:
- Home Affairs boss says his department followed proper processes awarding Paladin Holdings contracts
- Officials say a "special measure" was used because there was not enough time for an open tender
- Department secretary says Home Affairs Minister Peter Dutton had nothing to do with the "procurement process"
Department officials fronting a Senate estimates hearing were probed on the contracts — worth a total of $422 million — which were awarded to Paladin Holdings PTE Ltd, registered to a PO box in Singapore.
Home Affairs secretary Michael Pezzullo told the hearing the PNG Government was planning to take over responsibility for the services in October 2017 but in July that year decided it could not proceed because it was in caretaker mode ahead of its election.
"My very strong preference would have been to have a long lead time, an open tender, a global search assisted by specialised consultants and advisers," Mr Pezzullo said.
"That plan held fast until mid-2017 when the sovereign state of PNG advised us, 'we don't intend to proceed'.
"We were dealing with an urgent situation but were never desperate in doing so."
The hearing was told the Government awarded the contract under a so-called "special measure" provision because there was not enough time for an open tender.
"[It's] not a limited tender, it's an ability to go to an immediate individual and ask for a quote for the services," deputy secretary Cheryl-Anne Moy told the hearing.
Ms Moy said Paladin had experience in the region and had previously provided subcontracting services at the Manus Island detention centre.
"Paladin was operating in the environment … they understood the environment," she said.
"And we asked if they would be able to undertake these services and to date, we're quite happy with the services that they're undertaking."
Home Affairs Minister Peter Dutton has repeatedly said he had "no sight" of the tender process, which Mr Pezzullo confirmed to the hearing.
"Mr Dutton had nothing to do with the procurement process," he said.
"His sole role was to give me policy guidance on whether we would have to provide services. We took it from there."
Contract 'wasn't signed with beach shack company'
Officials also sought to distance the Government from a Paladin entity, Paladin Solutions Group, that was registered to a beach shack on Kangaroo Island.
"The office that is mentioned in media … in South Australia, it's the Australian entity," first assistant-secretary David Nockels said.
"When we first engaged Paladin in the broad, to assist with delivering services in Manus, it was Paladin Solutions Group under a letter of intent.
"But we signed the contract with Paladin Holdings PTE Ltd, which is a Singaporean-based company."
The officials said Paladin was operating under a strict performance management regime and that issues raised in media reports had not given them cause for concern about the contract.
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