Hotel quarantine inquiry: Senior bureaucrats raised concerns they were being asked to improperly sign security guard contracts

Officials at the Department of Jobs, Precincts and Regions raised concerns they were being asked to improperly sign contracts.

Victorian Jobs Department secretary Simon Phemister at the hotel quarantine inquiry in September.

Senior officials at the Victorian Department of Jobs, Precincts and Regions raised concerns that they were being asked to improperly sign contracts for private security guards used in hotel quarantine, emails provided to the inquiry into the bungled arrangements show.

Critically, these details were not pursued by the inquiry, which is headed by former Family Court judge Jennifer Coate and due to release an interim report on Friday.

In an April 9 email discussing a contract with Unified Security, senior Jobs Department staffer Charles Rankin writes: “I’ve put (Jobs Department secretary Simon Phemister’s) signature on it … this is the last one we should do like this”.

“Either he needs to sign using PDF (its pretty simple) or we need someone to witness him telling us to put his signature on it,” Mr Rankin, the director of the Office of the Secretary, writes. “I’m not comfortable putting his 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.”

In his written statement to the Coate inquiry, Mr Phemister said the contract — for $30m over a three-month period — had been executed “with my authority”.

On Tuesday, The Australian reported that the government agency overseeing Victoria’s use of contractors repeatedly raised concerns about how private ­security contracts were awarded and warned Treasury may have left out “materially relevant facts” in evidence presented to the hotel quarantine inquiry.

The Victorian Government Purchasing Board sent a series of letters and emails to Treasury in September disputing whether relevant material was provided to the inquiry investigating failures of the hotel quarantine scheme, and pointing to failures to obtain mandatory procurement accreditation by the Department of Jobs, Precincts and Regions.

It was the Jobs Department that engaged private security contractors — contrary to standard procurement processes. The use of poorly trained private security contractors, instead of police and the Australian Defence Force, has since been blamed for the spread of the virus out of Victoria’s hotel quarantine program, an outbreak which has led to more than 800 deaths.

The purchasing board told Treasury that it “had not been approached to provide relevant evidence, or a witness statement” to the hotel quarantine inquiry and expressed concern that it had been given no input into the statement that Treasury did provide to the inquiry.

A Treasury official — not on staff with the purchasing board — did make a submission but was not called to give oral evidence. The statement made no reference to issues with the Jobs Department’s procurement process. 

The purchasing board said this Treasury statement had overlooked the key fact of “the failure of the (Jobs Department’s procurement) accreditation process”.

It told Treasury that “the lack of accreditation of (the Jobs Department) is a materially relevant fact that may, or may not, be of interest to the inquiry”.

On March 25, just a few days before the start of the quarantine program, the purchasing board wrote to all departments stating: “In unusual times like these it is important to acknowledge an increased risk of unscrupulous or ill-prepared suppliers.

“Please be vigilant about the use of suppliers, in particular new suppliers … when procuring an emergency supplier, you need to ensure you undertake due diligence activities,” the letter read.

The VGPB also reminded departments and agencies of their obligation to consult with Treasury over contracts with providers that were not pre-approved with existing state purchase contracts

Despite this, on March 28, the Jobs Department engaged Unified Security to work at Melbourne’s quarantine hotels in Victoria. The company ultimately received more than $30m for three months’ work despite not being on the Victorian government’s list of approved suppliers. The DJPR first contacted Unified just before midnight on March 27, the same day the national cabinet agreed to establish mandatory hotel quarantine for returning travellers.

By 11.30am the next day, Mr Phemister had given the go-ahead and by midnight guards were stationed at the first of Melbourne’s COVID-19 hotels.

Other Jobs Department officials questioned how the contract was awarded in under six hours to a supplier not on the approved provider list. In a March 31 email, one official warned: “Need clarity on the rationale for going outside the (state purchase contract) in this instance.

“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 and effectively enforcing government regulation at quarantine sites off the back of some emails and phone calls presents significant risk to individuals involved and the department/Government that is not easily mitigated,” the email, provided to the Coate inquiry, reads.

Mr Phemister formally executed the contract with Unified on April 9, while Jobs Minister Martin Pakula told the inquiry the first he knew about it was in July.

Separately, the purchasing board’s latest annual report notes the Jobs Department is still not compliant with the “procurement policy framework”, a probity mechanism that all departments were to adopt by January 2019.

The purchasing board also wrote to Mr Phemister on September 4 detailing its concerns with the department’s procurement processes and the risk to the government in having an unaccredited agency managing high-risk procurement.

A Jobs Department spokesman said the organisation “follows a procurement process inherited from the former (department of economic development, jobs, transport and resources), which was accredited by the Victorian Government Procurement Board”. “The department has submitted all documentation required by the VGPB to achieve accreditation in its own right,” the Jobs Department statement reads.

The purchasing board wrote to Assistant Treasurer Danny Pearson on October 1, after an out-of-session meeting discussing the Coate inquiry, raising concerns about the Jobs Department’s procurement processes.