The Canberra Institute of Technology (CIT) ignored multiple warnings from government officials about lucrative, vaguely worded contracts it awarded for strategic advice and mentoring.
- Mounting public concerns have forced the CIT board to suspend a contentious $5 million deal for strategic advice
- Procurement officials had warned the institute over several years about its vaguely worded contracts
- The controversy relates to $8.5 million awarded to firms owned by Patrick Hollingworth
The contract crisis culminated on Friday, when the CIT’s board confirmed it had suspended the most contentious deal — worth $5 million — in response to a request from ACT Skills Minister Chris Steel.
Procurement authorities had raised concerns as far back as four years ago about the consulting projects, saying the CIT had failed to explain clearly what the work was and how it could be assessed.
The ACT government procurement board (GPB), which advises on important purchases, had also urged the CIT to be open to competing tenders and to apply more reasonable deadlines to its contract decisions.
Last week, the ABC revealed that, since 2018, the CIT had awarded almost $8.5 million of work to businesses owned by mountaineer Patrick Hollingworth.
Mr Hollingworth, whose firms Think Garden and Redrouge Nominees won the contracts, describes himself as a “complexity and systems thinker”.
The CIT’s board has now ordered an internal review of the latest Think Garden contract, valued at $5 million, which was to help the institute “progress the evolution of its complex, adaptive, systems-informed approach to… transformation”.
That contract was signed in March despite a warning from Mr Steel, who asked the board last year to explain what the firm’s jargon actually meant and to apply “the highest levels of probity and impartiality” to any further purchases.
On Friday, the board’s chair, Craig Sloan, told the ABC the CIT had suspended the contract, “pending consideration of legal advice for options, including cessation”.
He added the board would conduct an audit that would help it assess the performance of CIT chief executive Leanne Cover, who was responsible for the contract decisions.
The Canberra Liberals have expressed “deep concerns” about the deals, saying they are “shrouded in secrecy”.
Opposition Leader Elizabeth Lee has also called on Mr Steel to resign over his failure to explain the spending.
‘Such an approach risks significant criticism’: official warning
The GPB raised several concerns about the proposed Think Garden contract when it met in December last year, according to minutes of the meeting.
It noted Ms Cover had already approved a “single select” tender — closed to rival bidders — arguing the CIT’s needs were urgent.
“Such an approach risks significant criticism, as the full scope of these services have not previously been notified to the market and the current arrangements increase the current provider’s renumeration significantly,” the GPB noted.
The meeting also discussed problems with the CIT’s growing reliance on Mr Hollingworth.
“Given the reliance CIT have on this particular change-management adviser and their particular science-based methodology, it would be difficult to construct a competitive tender process,” the GPB said.
Among other concerns were a lack of information about what the contract would deliver and whether it was value for money.
“The detail around both the market-sounding process and basis for rates comparison to make an assessment about value for money is limited,” the GPB noted.
The ACT government also released documents on Friday that cited its procurement officials’ advice to the CIT since 2018.
Those officials repeatedly advised the CIT to be more specific when describing what the contracts would deliver and how to evaluate them, and to allow other businesses to tender more effectively.
They also criticised the lack of detail Mr Hollingworth’s firm provided on payments.
“Although the tenderer had provided a lump-sum figure, they had failed to detail the breakdowns or components for this figure,” the officials said.
The documents note the CIT ignored procurement recommendations on several occasions, citing urgency. For one contract, it did not respond at all.
‘Disappointed’ minister calls for review of CIT chief’s management
Earlier on Friday, Mr Steel said he had written to Mr Sloan, the CIT board’s chair, to express his disappointment.
He urged Mr Sloan to suspend the contract if possible and review Ms Cover’s performance.
“[I] am underwhelmed by your response and disappointed that CIT’s governance arrangements have resulted in a situation [that has] seriously damaged CIT’s reputation,” Mr Steel wrote.
“[While] the employment of the chief executive officer is a matter for the CIT board, I expect the board will ensure [her] management of these contractual matters is appropriately reviewed.
“Given that your term is ending shortly, I will be issuing a statement of expectations to the incoming CIT board chair.”
The ABC has contacted Mr Hollingworth for comment on three occasions. He has not responded.