The depth of cabinet’s bungle over the Australia Network tender has prompted the Auditor-General to question the federal government’s ability to handle such sensitive issues effectively.
The release of his damning report yesterday drew a concession from one cabinet minister that the government’s handling of the issue was flawed.
But Prime Minister Julia Gillard refused to respond directly to the report which found the repeated mishandling of the contract, worth $223 million over 10 years, presented the government in a ”poor light”.
Auditor-General Ian McPhee criticised the lack of security of commercially confidential documents and pointed to the government’s confusing approach to the tender process.
The opposition said the report showed the government was dysfunctional.
The government said it had paid compensation to Sky News, part of a consortium in the losing bid, following the aborted tender process.
Ms Gillard said the government would respond but she stood behind the decision to hand the contract to the ABC.
Trade Minister Craig Emerson said there were lessons to be learned.
”No one pretends that that was an elegant process, it wasn’t … there were many problems with it,” he said.
Opposition Leader Tony Abbott said the report showed the government could not be trusted to follow due process.
”Senior members of this government can’t be trusted to be honest with each other,” he said.
The report found government delays and indecision cost the time and money of the two tenderers – the ABC and the Australian News Channel (a joint venture between Nine Digital, Seven Media and British Sky Broadcasting).
The contract was to provide the broadcasting service aimed at promoting Australia overseas. It had been delivered by the ABC since 2001.
After months of leaks last year, the government terminated the tender process and handed the contract to the ABC.
A panel twice recommended the new contract be given to the Sky consortium.
In June last year, the tender process was halted as rumours emerged the panel was about to recommend Sky News be awarded the contract.
The process was then taken from Foreign Affairs and handed to Communications Minister Stephen Conroy.
Mr McPhee’s report found Senator Conroy’s role as the nominated approver raised issues such as ”perceptions, at least” of a conflict of interest, given his ministerial responsibility for the ABC.
”The manner and circumstances in which this high-profile tender process was conducted brought into question the government’s ability to deliver such a sensitive process fairly and effectively,” the report said.
”Despite the government agreeing to a tender process, key ministers did not hold a common view of the approval processes, including any role for government in being consulted on, agreeing to, or making the decision in relation to the preferred tenderer.”
In a formal response to the report before its publication, the Department of Prime Minister and Cabinet said it considered that the report ”inaccurately describes the tender as being conducted in a climate of uncertainty”.
Liberal senator Simon Birmingham said the report was a damning indictment of the government.
”It demonstrates that the dysfunction at the heart of this government is responsible for the ultimate corruption of this $223 million tender,” he said
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