Industry heavyweight has had jack of government tenders

Standing up for the little guys: Trenaman wants to see the goalposts changed for what constitutes a ‘local business’.

Resource and industry business leader Jack Trenaman is sick of local businesses missing out on government tenders and is calling on the government to change its approach.

The SMW Group director’s latest gripe is the $2.25 billion Shoalwater Bay Training Area upgrade project.

While there is a local preference clause in the tender awards, Mr Trenaman says the word “local” is very loosely used.

British construction giant Laing O’Rourke was awarded the management contract for the project – an international company which opened a shopfront in Rockhampton just before the project began.

Mr Trenaman wants to see “genuine local businesses” awarded contracts.

“Change what constitutes local content, have a transparency on the total spend to date and to genuine local businesses, local businesses that were here before the announcement, not just the fly in, fly out business for the project,” he said.

“Businesses that are pre-existing and have not been developed … just for the duration of the project,” he said.

“We have a major defence package that isn’t even managed by an Australian company.

“My thought is genuine local business is someone that has been in the community two to five years prior and has contributed to the local community.

“JRT contributes to all of the Yeppoon sporting clubs, I look after Capras, Fitzroy and Blackwater and Moranbah netball.

“None of the majors contribute to any of the locals.”

The Department of Defence stated the managing contractors of the project were “committed to employing a regional workforce and had developed Local Industry Capability Plans to ensure local communities had the opportunity to take advantage of economic benefits arising from the project”.

“For the Australia-Singapore Military Training Initiative SWBTA Facilities Project, being delivered by Laing O’Rourke in Central Queensland, 93 work packages have been awarded for the delivery phase design and construction work for the SWBTA, valued in the order of $346 million,” a Defence spokesperson said.

“Of these work packages, 62 has been awarded to local companies in the Central Queensland region (including Rockhampton, Livingstone Shire Council, Mackay, Moranbah, Emerald, and Gladstone areas). The work awarded to local companies is valued in the order of $286 million.

“For the SWBTA Remediation Project, being delivered by Downer/FKG Joint Venture, 60 work packages have been awarded for the delivery phase construction work, valued in the order of $84 million.

“Of these work packages, 48 have been awarded to local companies in the Central Queensland Region (including Rockhampton, Livingstone Shire Council, Mackay, Moranbah, Emerald, and Gladstone areas).

“The work awarded to local companies is valued in the order of $71 million.”

The following contracts were announced in May 2021:

• $24 million in work awarded to earthmoving and civil contracting company Bellequip for construction works

• $81,000 to Tunuba – a joint venture between the Darumbal people and CQG Consulting water-filled barriers works;

• $19 million to a joint venture between Allroads and Amcor Quarries for the completion of civil pavements and in-ground service

• $10.33 million awarded to Waanyi Shamrock United – a partnership involving Shamrock Civil Engineering and the Waanyi Indigenous company (based in North Queensland) for civil works.

The project involves up to 200 sub contracts released from 2019 to 2024.

The scope of the work for the project includes post land acquisition facilities and infrastructure, hardened manoeuvre corridors, field toilets and waste management, camp accommodation, vehicle wash, storage and maintenance, urban operations live fire, combined arms air land range, ICT infrastructure, bulk logistics node and medical facilities.

Mr Trenaman wants to see genuine local businesses awarded the contracts so the money stays in the community.

“Genuine value for money for this community would be people that own properties and pay rents in the town, their employees own houses and pay rates and their kids go to school in the town,” he said.

“Currently you go and have a look at who is flying in and out each week, that is not local.

“These are decisions from bureaucrats that impact on this local economy.”

Defence has rejected the claims surrounding a FIFO workforce.

“Accommodation camps have been established to provide a supplementary accommodation option to support the Major Capital Facilities Project workers travelling from the Rockhampton and Livingstone areas,” a Defence spokesperson said.

“These camps have been established to mitigate workforce fatigue and journey management impacts, not to encourage utilisation of FIFO workers.”

It’s a story that is all too common, Mr Trenaman said and the same thing happened for the construction of the Yeppen Crossing.

“You can go out through the Bowen Basin on roadworks at the moment, they are all southern companies,” he said.

“They win the big packages there, they float their big businesses up here.”

Some Central Queensland based businesses are forced to pay their employees higher prices as they are accustomed to the good money out at the mines.

This means when they apply for tenders they might be beaten by companies down south on price.

“When we hear the state government say we want to develop regional manufacturing and get back into the regions, no one is assisting driving that,” Mr Trenaman said.

“We have a huge skill shortage going on in CQ at the moment because the coal price has picked up and construction has picked up.

“There is nobody saying you might be five or 10 per cent dearer than someone in the south but we are going to help you win that package so we can develop trainees and apprenticeships in the town.

“You should always be able to negotiate price, but they pick and choose which one is going to be the award category for the final decision

“It’s inconsistent.”

Defence stated there were guidelines around which company was awarded packages and contracts.

“As part of the Managing Contractor’s contract with Defence, subcontracting procurement activities must be undertaken consistent with the principles of the Commonwealth Procurement Rules – notably achieving value for money, encouraging competition, and conducting efficient, effective, economical and ethical procurement,” the spokesperson said.

“This is the case for all work packages, regardless of the size.”

If SMW Group was awarded a tender it would have had 30 new persons from the Rockhampton region employed.

“Now those 30 jobs are coming out of Brisbane,” Mr Trenaman said.

Speaking out against the project isn’t about getting payback for being unsuccessful in tenders for Mr Trenaman, it’s about being the voice for the small businesses and pushing for change in the future.

“We have built this business and made it public listed by the resource sector and we will continue to look after our customers out there,” he said.

“It is very unfortunate because we could sign another skill set to our business and develop those for these other upcoming projects.”

Projects like the Shoalwater Bay upgrades are “once in a lifetime jobs”.

A frustrating part is by not getting the smaller packages, it stops businesses from going for the larger ones as they have missed out on the chance to upskill for the bigger projects.

Mr Trenaman is worried the same thing is going to happen when the ring road comes to town.

“We will never be able to compete in larger packages and a lot of business won’t have the opportunity to,” Mr Trenaman said.

“There is a lot of companies that have less capabilities that us in this region but if they were able to develop those capabilities because they won a package and defence helped them develop their skillset, they would use those throughout Central Queensland over international companies who win those jobs all the time.

“The little fellas that have been waiting for these once in a lifetime projects to get a kick along and employ locals, they are going to miss out.”