Report finds CEO ‘friendship’ influenced tender

The former CEO of a West Australian council favoured a person with whom she appeared to have “a more than purely professional working relationship” in a tender process, failed to keep adequate records and omitted details from the tender register, a report has found.

The report into Perenjori Shire Council looked at tender and procurement processes at the shire between 2012-18 when Alison Mills was CEO.

The Director General of WA’s Department of Local Government authorised an inquiry in January 2018 after an audit identified “serious issues” relating to the redevelopment of the Perenjori Pavilion and the construction of accommodation for council staff.

That inquiry found a “degree of deception” on the part of Ms Mills but noted that councillors may not have performed due diligence and been “willingly misled”.

The report found Ms Mills, who resigned July 2018, had favoured sales consultant Warren Taylor in regard to two projects.

One project involved the construction of independent living units for shire staff, which Mr Taylor’s company ended up winning from eight competing tenders.

A ‘more than professional relationship’

The report found there was “a perceived, if not actual, conflict of interest” for Ms Mills which “brought into question the objectivity and impartiality” of the tender process.

The report said the awarding of the $550,000 contract to Warren Taylor Homes for almost $603,000 wasn’t adequately justified and that Mr Taylor’s tender was assessed more favourably than others.

The tender panel did not undertake “the evaluation of potential suppliers for the independent living units contract impartially, honestly and consistently,” the report says.

“The Authorised Persons consider on the preponderance of evidence that there exists a personal or casual friendship or, at the very least, a more than purely professional working relationship” between Ms Mills and Mr Taylor including numerous “catch-ups” that didn’t occur with other tenderers.

“At no time did the CEO declare the communications she had with Mr Taylor, nor the broader context of their relationship,” the report says, even though she admitted in her own words she was “not … supposed to do this” in relation to helping him prepare his tender.

Pavilion redevelopment

The report also looked at the $220,000 contract for the redevelopment of the Perenjori Pavilion, which was also awarded to Mr Taylor’s company SCH.

It found in the process Ms Mills breached breach the Local Government Act by making improper use of confidential information including tender information from another company “which advantaged Mr Taylor over and above other tenderers”.

In a third case the report also found that appropriate procedures for purchase were not followed in relation to a contract to build transportable accommodation for shire staff, which was awarded to StratX Pty Ltd.

An extra $102,344 was spent on the units which was not budgeted or approved by Council, the report said.

The report found Ms Mills’ handled the contract in a way that indicated she wanted to avoid it going to tender.

The units were later transported to Perenjori before they were fully assessed and were “found to be damaged, and the quality of workmanship to be non-compliant with Australian Standards.”

The report found serious shortcomings in record keeping at Perenjori.

“During the course of the inquiry, it became clear that the state of files relevant to the inquiry, tender registers and electronic records of the Shire was, at best, haphazard,” it said, with poor record keeping “severely hampering” the inquiry.

A Commissioner was appointed in June to run the tiny farming and mining LGA, which has a population of just 600 people, after five of its nine councilors resigned.

Local government minister David Templeman said the report was a reminder of the responsibility of councils to abide by local government laws.

“Record keeping, the role of the CEO, and tendering processes are all important activities and councils have to be aware of their obligations and responsibilities,” he said.

The appointment of the commissioner would help restore stability for the shire, he said.

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