Home Affairs Paladin contract: Labor calls for Auditor-General review after more explosive revelations

Labor is urging the Auditor-General to probe a $423 million Home Affairs contract awarded to a company headquartered in a Kangaroo Island shack after more explosive revelations.

Labor is calling for the Auditor-General to launch an urgent review of the $423 million Home Affairs contract awarded to Paladin after a string of explosive revelations.

It has been revealed that Paladin’s Australian arm was registered to a beach shack on Kangaroo Island at the time it won the lucrative federal government contract through a restricted tender process.

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Shadow Immigration Minister Shayne Neumann wrote to Auditor-General Grant Hehir last night to request an “urgent audit” into the circumstances surrounding the multimillion-dollar contract.

He said media had highlighted “significant concerns” about the contact, particularly over letters of intent to the Paladin Solutions Group and a subsequent contract with Paladin Holding Pte Ltd.

“Given the level of expenditure associated with these contracts, the Government’s poor track-record, and the concerning reports and allegations related to the entities involved, I seek your urgent investigation of the circumstances surrounding these contract arrangements,” Mr Neumann wrote.

“The letters of intent and contract has resulted in the expenditure of $423 million of taxpayers’ money,” he said in the letter.

“The original letters of intent with Paladin Solutions Group were undertaken under section 2.6 of the Commonwealth Procurement Rules – with the Department of Home Affairs using these provisions to approach Paladin Solutions Group directly – and Paladin Solutions Group only.

Shadow Immigration Minister Shayne Neumann wrote to Auditor-General Grant Hehir last night to request an “urgent audit” into the circumstances surrounding the multimillion-dollar contract. Picture: AAP

“At Senate Estimates yesterday, Department of Home Affairs officials claimed that they were ‘dealing with an urgent situation’ when they signed an initial letter of intent with Paladin Solutions Group in September 2017 – with letters totalling $89 million.

“The Secretary of the Department of Home Affairs told the Senate Estimates committee, ‘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’.

“Despite this preference, a subsequent contract worth $333 million awarded to Paladin Holding Pte Ltd was signed on 28 February 2018 with no other providers considered – despite reports today indicating that other companies, such as Toll Holdings, were considering bidding.”

Labor Leader Bill Shorted said Home Affairs Minister Peter Dutton was “yet again at the centre of an incompetency scandal”. Picture: AAP/Mick Tsikas

Yesterday, Home Affairs Minister Peter Dutton said Labor hadn’t queried a cent of more than $15 billion of coalition government spending on border protection until it passed a bill making medical transfers easier for asylum seekers in offshore processing.

“This week when they are under pressure for passing a law that’s going to bring in people of bad character, all of a sudden they’ve got an interest in this $400 million,” he told Sky News.

The minister, who was not responsible for signing off on the Paladin contract, said procurement guidelines had been followed.

“There are probity lawyers all over these decisions and processes, all of that has been followed,” he said.

Opposition Leader Bill Shorten has described the awarding of the contract as scandalous.

“Peter Dutton yet again at the centre of an incompetency scandal - handing out $423 million and then saying ‘it has nothing to do with me, it’s my department’,” he told reporters in Canberra on Monday.

Home Affairs secretary Michael Pezzullo said his department had needed to “move quickly” to fill the contract after a detention centre on Manus Island shut down in October 2017.

Mr Dutton backed claims from departmental officials that companies were worried about being associated with offshore processing on Manus Island.

“Many of the companies who would otherwise be interested in these contracts have been hounded out because of the activists here have mounted campaigns online,” he said.

Multinational giant Toll Holdings was interested in bidding to provide services on Manus Island, the Australian Financial Review reported on Tuesday. Mr Dutton said Paladin were providing “many services” under the $20-million-a-month agreement.

“This is a major distraction for Labor in their minds, but people see through it.”

- with AAP