Construction of the New Woodford Correctional Centre LEGISLATIVE ASSEMBLY of QUEENSLAND

Report No. 34, October 1996 Construction of the new Woodford Correctional Centre LEGISLATIVE ASSEMBLY OF QUEENSLAND

PUBLIC WORKS COMMITTEE

CONSTRUCTION OF THE NEW WOODFORD CORRECTIONAL CENTRE

Report No. 34 PUBLIC WORKS COMMITTEE

MEMBERS

Mr Len Stephan MLA (Chairman) Member for Gympie

Mr Bill D’Arcy MLA Member for Woodridge

Mr Graham Healy MLA Member for Toowoomba North

Mr Pat Purcell MLA Member for Bulimba

Mr Ted Radke MLA Member for Greenslopes

Mr Geoff Smith MLA Member for Townsville

SECRETARIAT

Mr Les Dunn Research Director

Ms Belinda Noakes Research Officer

Ms Maureen Barnes Executive Assistant CONTENTS Page

PREFACE ...... i

RECOMMENDATIONS...... ii

INTRODUCTION...... 1 THE COMMITTEE ...... 1 SCOPE OF INQUIRY...... 2 SUBMISSIONS, INSPECTION AND HEARINGS ...... 2 RESPONSIBILITY OF MINISTERS...... 3

NECESSITY, ADVISABILITY AND FIT FOR PURPOSE...... 4 BACKGROUND...... 4 THE NEW WOODFORD CORRECTIONAL CENTRE...... 4 The Site ...... 4 Project Budget ...... 5 Design and Facilities...... 5 NECESSITY AND ADVISABILITY...... 6 FIT FOR PURPOSE...... 6

PROCUREMENT...... 8 IN-HOUSE BIDS...... 8 THE TENDERING PROCESS ...... 9 Membership of the Tender Evaluation Committee ...... 9 Membership of the Advisory Team...... 10 Chinese Walls...... 11 Cost of Tenders...... 12 Tender Brief Information...... 13 Evaluation Criteria/Weighting ...... 15 Evaluation timetable...... 16 Time for presentation of tenders...... 16 Debriefing ...... 18 SCRUTINY OF THE TENDER PROCESS ...... 19 The Probity Auditor ...... 19 COSTING OF IN-HOUSE BIDS ...... 21 Method of calculation...... 21 Performance Monitoring and Enforcement ...... 23 ‘BUNDLED’ CONTRACTS ...... 25

BALANCE OF PUBLIC AND PRIVATE SECTOR INVOLVEMENT, AND PERFORMANCE OF THE CONSTRUCTION AUTHORITY, CONTRACTORS AND CONSULTANTS ...... 27 BALANCE OF PUBLIC AND PRIVATE SECTOR INVOLVEMENT ...... 27 PERFORMANCE OF THE CONSTRUCTION AUTHORITY, CONTRACTORS AND CONSULTANTS...... 27 The Concept of Partnering ...... 27 Partnering for the Woodford Correctional Centre...... 28 Project Status...... 29 Reasons for Success...... 29 REFERENCE LIST...... 32

APPENDIX A — CALL FOR SUBMISSIONS...... 33

APPENDIX B — LIST OF SUBMISSIONS RECEIVED...... 34

APPENDIX C — LIST OF WITNESSES...... 35

APPENDIX D — REFERENCES TO CORRECTIONAL PHILOSOPHY ...... 37 Preface Construction of the new Woodford Correctional Centre

PREFACE

The inquiry into the construction of a new correctional centre broke new ground for the Public Works Committee. It was the first time the committee has looked at a project involving an in-house bid which won an open competitive tendering process. Many issues arose as a result of the in-house team’s win.

The committee’s report covers these issues. Such issues as membership of tender evaluation committees, separation of bidding and evaluation staff within an organisation, the cost of making a tender, the evaluation criteria and timetable, the costing of in-house bids and scrutiny of the tender process by a probity auditor.

Private sector organisations raised many concerns with these issues. In some cases these concerns included allegations that the tender evaluation process had not been fair — that private sector agencies had been wasting their time and money tendering.

The committee acknowledges these views. However, the committee did not receive any evidence which supports any notions that the tendering process was not fair. The committee believes that under the circumstances the Queensland Corrective Services Commission did a creditable job of running the tender process.

The committee does believe, however, that there are several measures which will improve the quality of the tendering process particularly where there is an in-house bid. The committee’s recommendations address these issues. The committee makes recommendations for the State Purchasing Council to develop guidelines, on several issues, for inclusion in the State Purchasing Policy. The committee would like to see a situation where the State Purchasing Policy is the sole guide for agencies to use when developing tender processes.

The committee is pleased to see the construction of the project going so well. The success of the project can be put down to the excellent partnering approach between the Queensland Corrective Services Commission and Concrete Constructions. In its report the committee makes a recommendation suggesting that government agencies should use more widely the partnering approach to project management.

My thanks to my fellow committee members. The committee thanks all those who took the time to make a submission to the inquiry, appear at a public hearing or attend a private meeting, particularly those private sector people who gave the committee their time. The committee also thanks the committee secretariat staff for their assistance.

Len Stephan MLA Chairman

(i) Recommendations Construction of the new Woodford Correctional Centre

RECOMMENDATIONS

The committee makes the following recommendations:

RECOMMENDATION 1: (Paragraph 40)

The committee recommends that:

Where the Department of Treasury guidelines for Private Sector Involvement in Public Infrastructure Delivery duplicate provisions of the State Purchasing Policy, the Department of Treasury guidelines defer to the State Purchasing Policy.

RECOMMENDATION 2: (Paragraph 58)

The committee recommends that:

(a) the Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on organisational separation in the event of an in-house bid for inclusion in the State Purchasing Policy

(b) these guidelines require that state government agencies involved in an in-house bid make public, before the tender process begins, arrangements they have made for separating staff who may have a conflict of interest in the project

(c) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

RECOMMENDATION 3: (Paragraph 65)

The committee recommends that

(a) the Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on paying reimbursement for tender costs incurred by tenderers for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in the parliament within 6 months of the tabling of this report.

(ii) Recommendations Construction of the new Woodford Correctional Centre

RECOMMENDATION 4: (Paragraph 70)

The committee recommends that:

(a) the Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on compiling tender briefs for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in the parliament within six months of the tabling of this report.

RECOMMENDATION 5: (Paragraph 75)

The committee recommends that

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines which require agencies to publish weightings of evaluation criteria for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

RECOMMENDATION 6: (Paragraph 87)

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on pretender meetings for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

RECOMMENDATION 7: (Paragraph 92)

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on debriefing for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

(iii) Recommendations Construction of the new Woodford Correctional Centre

RECOMMENDATION 8: (Paragraph 99)

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines, for inclusion in the State Purchasing Policy, which require state government agencies to appoint a probity auditor for all major projects, all projects tendered by way of a bundled contract (eg design/construct/operate) and projects where there is an in-house bid

(b) the guidelines require that the minister responsible for the project appoint the probity auditor and that the probity auditor be accountable to the responsible minister

(c) the guidelines require the minister responsible for the project appoint the probity auditor prior to the tender process beginning to enable the probity auditor to comment on the tender evaluation process prior to commencement of tender evaluation

(d) the guidelines enable the probity auditor to intervene in the tender evaluation process at any time

(e) the Minister for Public Works and Housing table these guidelines in the parliament within 6 months of the tabling of this report.

RECOMMENDATION 9: (Paragraph 112)

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on the calculation of in-house bid costs for inclusion in the State Purchasing Policy

(b) that these guidelines require independent audits of in-house bid costings

(b) That the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

RECOMMENDATION 10: (Paragraph 119)

The committee recommends that:

(a) The Department of Treasury develop guidelines for resource agreements between the Department and Treasury and public sector agencies making in-house bids

(iv) Recommendations Construction of the new Woodford Correctional Centre

(b) the Department of Treasury make these guidelines available to public sector agencies making in-house bids

RECOMMENDATION 11: (Paragraph 151)

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on managing relationships and contractual arrangements between public and private sector proponents in large and/or complex infrastructure projects for inclusion in the State Purchasing Policy

(b) those guidelines promote partnering, where it is appropriate, as the preferred approach

(c) those guidelines mandate partnering in all cases where projects are procured using a bundled (eg. design-construct-operate) contract

(d) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

(v) Introduction Construction of the new Woodford Correctional Centre

INTRODUCTION

THE COMMITTEE

1. The Parliamentary Committees Act 1995 (Qld) establishes the Public Works Committee. It consists of six members of the Legislative Assembly. Both the Government and the Opposition nominate three members. The chairperson must be a government member and has a casting vote if the votes are equal (s. 4A.(1)). The all-party committee adopts a non-partisan approach to its inquiries.

2. The committee reviews public works of any value. This can occur at any stage from planning to completion. The committee may determine to conduct a particular inquiry, or the Legislative Assembly may refer specific works for investigation. Amendments contained in the Parliamentary Committees Legislation Amendment Act 1996 (Qld) allow the committee to consider major works conducted by Government-Owned Corporations (GOCs) (s. 20(1)(b)).

3. In deciding whether to investigate a work, the committee may consider: · the stated purpose of the work and the apparent suitability of the work for the purpose; · the necessity for, and the advisability of, the work; · value for money achieved, or likely to be achieved, by the work; · revenue produced by, and recurrent costs of, the work or estimates of revenue and costs for the work; · the present and prospective public value of the work, including consideration of the impact of the work on the community, economy and environment; · procurement methods for the work; · the balance of public and private sector involvement in the work; · the performance of - · the construction authority for the work; and · the consultants and contractors for the work; with particular regard to the time taken for finishing the work and the cost and quality of it; and · the actual suitability of the work in meeting the needs and in achieving the stated purpose of the work (s. 20(2)).

4. The committee takes a variety of matters into consideration in the conduct of its inquiries, many of which also form the basis of its decisions to inquire into particular areas or projects. The committee endeavours to review projects from as wide a selection of departments and other constructing authorities as is practicable, in a variety of locations throughout Queensland, of differing cost and scale, and at various stages of their implementation.

1 Introduction Construction of the new Woodford Correctional Centre

5. The committee considers that in the development of public works, it is essential it obtain input from end users as well as from people and organisations either affected by or with an interest in the development. One of its roles in facilitating this process is providing a public forum in which the community can express opinions, whether it be suggestions, praise or criticism. This enables the committee to determine the extent of the uniformity of approach across the state’s capital works procurement program. The committee believes, however, the focus of this and all other state government capital works projects must be upon maximising the benefits to the community.

6. The committee is determined to ensure Queensland receives value in the development of capital assets, and that state government agencies manage such assets to provide the best possible outcomes.

SCOPE OF INQUIRY

7. The committee’s terms of reference for this inquiry were as follows: · the necessity for and advisability of the work; · the suitability of the work in meeting the needs and in achieving the stated purpose of the work; · the extent to which the procurement process complies with the State Purchasing Policy; · the balance of private and public sector involvement in the work; · the performance of — · the construction authority for the work · the consultants and contractors for the work with particular regard to the time taken for finishing the work and the cost and quality of it.

8. The committee adopted a broad interpretation of the terms of reference. As the use of an in-house bid is relatively new to Queensland the committee has chosen to examine, in some detail, the procurement process for this project.

9. In examining the in-house bid process the committee has assumed there is a benefit to the government in allowing an in-house bid. The committee has not, in any way, looked at the benefits or otherwise of in-house bids or competitive tendering and contracting processes.

10. While some of the report’s recommendations are generally applicable to the tender process the major focus of the recommendations is on tender processes where there is an in-house bid.

SUBMISSIONS, INSPECTION AND HEARINGS

11. The committee sought public submissions in relation to the Woodford Prison by public advertisement and by direct mail to selected interest groups and individuals. A copy of the advertisement is at Appendix A. A list of submissions is at Appendix B.

2 Introduction Construction of the new Woodford Correctional Centre

12. On 19 June 1996 members of the committee inspected the site of the Woodford Prison.

13. The committee held a public hearing in Caboolture on 19 June 1996, and further public hearings in Brisbane on 27 June and 23 July 1996. A list of those who appeared at the hearings is at Appendix C.

RESPONSIBILITY OF MINISTERS

14. This report makes recommendations for action by the Government. Section 24(4) Parliamentary Committees Act 1995 requires the responsible minister to table a response in the parliament within 3 months after the committee tables the report.

3 Necessity, Advisability and Fit for Purpose Construction of the new Woodford Correctional Centre

NECESSITY, ADVISABILITY AND FIT FOR PURPOSE

BACKGROUND

15. By the middle of 1993 the QCSC realised prisoner numbers were increasing faster than its earlier predictive modelling had forecast. By late 1993 it developed a three stage program to address the rising prison population (Submission 7:2): · Stage One — The use of double-ups (two prisoners to each cell) in existing secure centres in South East Queensland · Stage Two — The construction of new cell accommodation at existing centres in South East Queensland and Far North Queensland · Stage Three — The construction of a new correctional centre.

16. The QCSC implemented Stage One immediately and it still uses doubling up as one means of coping with ongoing unprecedented growth in prisoner numbers (Submission 7:2). Stage Two provided a total increased cell capacity of 317 new cells (Submission 7:3) through expansions to the two privately-run prisons (Borallon Correctional Centre and Arthur Gorrie Correctional Centre) and two publicly owned centres (Lotus Glen Correctional Centre Farm and Sir David Longland Correctional Centre).

17. Stage Three of the program called for the construction of a new 400/600 bed correctional centre in South East Queensland. The Government determined that the project would be let by way of a competitive tendering process (see para 36). It also decided that the QCSC should submit a bid.

18. Subsequently, the QCSC formed a bid consortium with Project Services Division of the Department of Public Works and Housing, and Concrete Constructions Group. In June 1995 the Government announced the QCSC consortium had submitted the successful tender. The new Woodford Correctional Centre (‘the centre’) is currently under construction and is scheduled for completion in March 1997 (Submission 7:10).

THE NEW WOODFORD CORRECTIONAL CENTRE

The Site

19. The project occupies the site of the old Woodford Prison (now demolished) located on Neurum Road on the outskirts of Woodford Township. The QCSC controls the land, which is described as: Lot 334 and 335 on Plan CG 535 and Lot 336 on Plan CG 2364 Parish of Durundur, County of Canning 148.82 Ha (Submission 6A:1).

20. The site’s topography includes low lying land adjoining the Stanley River to hill tops with views to the Glasshouse Mountains. The access road to Woodford is often cut by flood waters in times of heavy rain, although alternative access is available (Submission 6A:1).

4 Necessity, Advisability and Fit for Purpose Construction of the new Woodford Correctional Centre

Project Budget

21. On 31 August 1995 the Executive Council approved a total budget of $58.277M for the design, construction and equipping of the centre (Submission 6A:2).

Design and Facilities

22. The centre will hold 600 medium and high security male prisoners. It has the capacity to accommodate special needs groups including protection and at risk prisoners and other prisoners requiring special management. The specific facilities are as follows (Submission 6A:2-3):

23. High Security Buildings: · single cell units — prisoners have 24 hour access to ensuite shower and toilet facilities while secured in cells · common areas for dining, laundry, exercise and general recreation · 304 beds in total · high level of security for both custodial officers and prisoners provided via central movement control stations allowing direct visual and closed circuit television surveillance · buildings constructed with concrete slabs, fully reinforced block walls, concrete ceilings, steel roof trusses and roof sheeting · all internal areas air conditioned.

24. Medium Security Buildings: · single bedroom accommodation in unit blocks — prisoners secured in individual units at night · common showers and toilet facilities and common lounge, dining and laundry areas · 276 beds in total · security surveillance provided via an access control point into the medium security buildings · buildings constructed with concrete slabs, block walls (reinforced for structural reasons only), steel roof trusses and roof sheeting · all internal areas air conditioned.

25. The facility also provides a range of cells with suitable access for persons with disabilities, in accordance with the Building Code of Australia (Submission 6A:3).

26. The centre includes the following ancillary facilities (Submission 6A:3): · a crisis support unit for treatment of prisoners who demonstrate risk of self harm · a medical unit for treatment of minor medical problems · a special handling unit of 20 beds for securing prisoners who provide a higher security risk

5 Necessity, Advisability and Fit for Purpose Construction of the new Woodford Correctional Centre

· an administration building · a visitors centre · a reception facility for processing all prisoners coming to or leaving the centre · a stores facility to receive and distribute all consumables · a kitchen · a detention area to provide alternative accommodation for prisoners who do not conform with centre regulations · a programs building · a multi-purpose hall · an industries facility · a visitor processing facility · a gatehouse.

27. All staff and prisoner living areas are air conditioned. Other spaces rely on ceiling fans and cross ventilation for air movement (Submission 6A:4). Covered concrete paths connect most buildings. A state of the art static security system provides perimeter security (Submission 6:4).

28. Building services include high security surveillance systems, lighting, power, liquid petroleum gas, telephones, computer and intercom communication. All prisoner living areas have fire alarms and sprinklers (Submission 6A:4).

29. The centre will have a purpose-designed on-site sewerage treatment system. A vacuum toilet sewerage disposal system will reduce the use of water and assist QCSC officers to search for drugs (Submission 6A:4).

NECESSITY AND ADVISABILITY

30. As already mentioned, in 1993 the QCSC identified an emerging unprecedented level of demand for prisoner accommodation in Queensland (Submission 7:2). This new centre is the final part of a three stage program the QCSC developed to deal with the problem of vastly increased demand (Submission 7:2). The committee believes that a facility of this kind is clearly necessary in Queensland.

FIT FOR PURPOSE

31. The invitation to tender documents for the centre state its purpose being to

“provide a structured day for prisoners based on a therapeutic community comprising of employment, educational and therapeutic programs, and recreational and social activities” (Submission 9:1).

6 Necessity, Advisability and Fit for Purpose Construction of the new Woodford Correctional Centre

32. The documentation also states the centre’s role is to provide: "1. Secure placement for maximum, high and medium security classification male sentenced prisoners; 2. Accommodation of high and medium security classification prisoners who require protective custody; 3. Accommodation of special management prisoners; 4. Specialised therapeutic intervention programs for drug and alcohol abusers and violent offenders including violent sexual offenders; 5. Crisis support for prisoners who are assessed as high risk of suicide or self-harm; 6. Educational and recreational programs for prisoners; and 7. Work opportunities for prisoners which complement the therapeutic, educational and recreational programs. In an environment that encourages positive behaviour and attitudes leading to self directed rehabilitation while ensuring the necessary degree of security against the assessed risk and within budget” (Request for Tender:7).

33. The Department of Public Works and Housing advised (Submission 6A:6) that the design is influenced by architectural principles including the need for robust, durable, economical and functional design; the need for secure containment; zero or low maintenance; correlation between aesthetics and prisoner behaviour; and safety of staff, prisoners and visitors. The department also suggested that the design submitted by the QCSC “demonstrates a clear understanding of all design issues” (Submission 6A:5).

34. The QCSC reviewed and approved the final design as ‘operationally fit for purpose’, and Concrete Constructions reviewed and approved the final design as ‘technically fit for purpose’ prior to the submission of their bid (Submission 5:4). Furthermore, development of the design is fully documented in a project specific design management plan which is held by all parties. The plan sets out a collaborative design review and approval process to ensure that the final product is fit for purpose (Submission 5:4).

35. The committee observed many examples of innovative approaches to the centre’s design and construction during its inspection of the facility, and believes the centre will fit well the purpose for which it was designed.

7 Procurement Construction of the new Woodford Correctional Centre

PROCUREMENT

IN-HOUSE BIDS

36. An in-house bid is where an internal team, usually based on the existing provider, participates in the tender process. If it is successful it then supplies the required service or product on a contractual basis. (Industry Commission;1996:285). Australian jurisdictions have different approaches to in-house bids. Victoria and Tasmania discourage in-house bids. Western Australia discourages them where a viable external market exists. On the other hand, NSW and South Australia allow in-house bids while not having a policy of preferring them over private sector bids.

37. The Queensland Government allows in-house bids by government agencies but it is a relatively new concept. The committee is unaware of other public sector in-house bids of the size of the Woodford project. Consequently, the committee views the Woodford prison project as a pioneer of several aspects of the procurement process involving an in-house bid. It was certainly a pioneer in that an in-house bid was successful.

38. Not surprisingly, given that an in-house bid won, private industry submitters to the inquiry had some difficulties with the procurement process. In particular, private industry would like to ensure competition between the public and private sectors is fair — to borrow a much used phrase, to ensure there is a ‘level playing field’.

39. Given that the basis for competitive contracting is securing the best result for government the committee shares the private sector’s concern. It wishes to see government set out clear guidelines which ensure fair competition between the public and private sectors. To achieve this aim the committee makes recommendations requiring the Minister for Public Works and Housing to direct the State Purchasing Council to develop guidelines for inclusion in the State Purchasing Policy for public sector agencies to follow in the event they make an in-house bid.

40. As in-house bidding is a new area of government activity the committee believes there should be only one source of information for agencies to consult — the State Purchasing Policy. The committee is aware the Treasury Department is developing guidelines for Public Sector Involvement in Public Infrastructure Delivery. The committee is unaware of the content of these guidelines so does not know the extent to which they cover similar ground as the State Purchasing Policy and the recommendations made in this report. In cases where there is duplication the committee believes the Treasury guidelines should defer to the State Purchasing Policy.

Recommendation 1:

The committee recommends that:

8 Procurement Construction of the new Woodford Correctional Centre

THE TENDERING PROCESS

Membership of the Tender Evaluation Committee

41. The Tender Evaluation Committee (TEC) was “responsible for the approval and issue of tender specifications and evaluation criteria, management of the tender process and the evaluation of tenders” (Submission 9:2). The government of the day established the TEC to help ensure an objective, independent and neutral tendering process.

42. The TEC had five members. These were: Mr A J Ayers (Secretary to the Department of Defence) (Chairman), Mr M Montefiore (Queensland Treasury), Ms A McDonagh (Office of the Cabinet), Mr G May (Administrative Services Department) and Professor P Weller (Chairman QCSC).

43. Barclay Mowlem raised the issue of membership of the Tender Evaluation Committee (Submission 4:3). They argued that its composition was controversial for two reasons: 1. Whether it was fair for the QCSC to have a representative on the TEC. 2. Whether the TEC should have included private sector representatives.

44. One submission argued that the chairman of the QCSC should not have been a member of the TEC because he had a vested interest in the QCSC winning the tender (Submission 4:7). The committee received no evidence which suggests that the chairman of the QCSC unduly influenced the TEC to find in the favour of the QCSC, and believes that as the QCSC chairman was only 1 of 5 members of the TEC, there was little opportunity for him to do so. Informal discussions with the then chairman of the QCSC, and with other members of the TEC, convinced the committee that the chairman of the QCSC did not unduly influence the TEC in any way.

45. Furthermore, the committee believes it is unrealistic to suggest that the purchaser not have a representative on the TEC. The committee accepts this particular situation is different to the private sector, where a company would not normally make an in-house bid for tenders and therefore would not have any potential conflict of interest. However, while the committee can understand the concern of the private sector, it believes that principals must have representatives on tender evaluation committees, as it is essential to have someone on the committee who understands precisely what the principal wants from the project (Transcript:54).

46. There were also calls for private sector representation on TECs (Transcript:43, Submission 4:6). The committee agrees with this in principle but sees difficulties with it. Who is going to select private sector representatives for a TEC? On what criteria will they be chosen? Are there enough suitably qualified private sector people available to serve on a tender evaluation committee who would not appear to have a conflict of interest? The committee believes industry should provide the government with suggestions on how it might organise private sector representation on tender evaluation committees. The committee would welcome any future submissions on this matter from private industry.

9 Procurement Construction of the new Woodford Correctional Centre

47. It strikes the committee that there are as many problems with private sector representation on a tender evaluation committee as there are with public sector representatives. Nonetheless, the committee sees no reasons why private sector individuals should not serve on tender evaluation committees provided they meet all necessary probity requirements. In the end both the public and private sectors will have to trust the integrity of the members of tender evaluation committees. The appointment of a probity auditor should help allay any fears particular individuals or organisations may have about the impartiality of a tender evaluation committee. This report discusses the role of the probity auditor in more detail at para 93.

Membership of the Advisory Team.

48. The advisory team was responsible for undertaking “analytical research of both the expressions of interest and the tenders for consideration and deliberation by the Tender Evaluation Committee.” (Submission 9:2).

49. The advisory team, which included a technical assessment team, included the following functions: · a suitably qualified private consultant · a senior official from Queensland Treasury · a senior official from the Office of the cabinet · a senior Administrative Services Department official with construction/engineering experience · an Administrative Services Department financial adviser · three specialists from within the engineering, architectural and design services area of the NSW Department of Public Works · a senior QCSC official with operational experience in corrections · a senior QCSC official with experience in offender programs and offender services and service delivery · a senior QCSC official with experience in correctional training within the human resources environment · a senior QCSC official with legal experience in the area of contracts and tenders · a senior QCSC official with legal experience in corrections discipline.

50. Criticisms of the membership of the advisory in the area of contracts and tenders team were similar to those of the TEC. Codd Partnerships submitted that QCSC officers who had helped prepare the tender brief subsequently worked as part of the advisory team, and that this caused them to have a conflict of interest (Submission 2:2).

51. The QCSC went to great lengths to ensure advisory team members were aware of their responsibilities in regard to maintaining probity. The probity auditor for the project gave evidence to the committee that members of the advisory team were, as much as possible, separated from QCSC officers working on the bid (Transcript:30). The

10 Procurement Construction of the new Woodford Correctional Centre

QCSC also issued written instructions to staff working in the different roles forbidding discussion of the issue (Transcript:30).

52. The committee believes the QCSC took action which effectively separated the advisory team from those QCSC staff who prepared the bid. A detailed analysis of the separation of staff within the QCSC is at paragraphs 53-58.

Chinese Walls

53. An organisation implements ‘Chinese walls’ in situations where different sections of the organisation may have conflicting interests in a particular issue. ‘Chinese walls’ prevent staff within an organisation coming into contact with other staff or information which may compromise their position in relation to a particular matter. For example, a law firm may use them in the case where two of its employees are appearing for opposing sides in a trial. They can take the form of physical separation of staff (different buildings), different phone and fax numbers and sworn statements by staff that they will not discuss the matter.

54. The committee agrees with a recent Industry Commission report on competitive tendering which made a recommendation stressing the importance of separation of staff within an organisation making an in-house bid. The commission recommended:

“Where there is to be an in-house bid, it should be prepared by an organisational unit which is separate from all aspects of service regulation and specification, and tender evaluation.” (Industry Commission;1996:296).

55. In this case the QCSC stated that it implemented ‘Chinese walls’ between the bid team and those involved in the evaluation of tenders (Transcript:2). For example, the board of the QCSC excluded the chairman of the QCSC from discussions on the Woodford project because he was a member of the TEC (Transcript:2).

56. The effectiveness of ‘Chinese walls’ was an issue during discussion of the membership of both the TEC and the advisory team (Transcript:38,39,46,54,66,68,70; Submissions 1,2,4,11). Witnesses from Australasian Correctional Services stated the probity auditor did not give due attention to the concerns they raised about ‘Chinese walls’ and the bidding process (Transcript:66). The probity auditor has not had the opportunity to respond to these allegations but in evidence to the committee stated he was completely satisfied with the separation between the evaluation and bidding teams within the QCSC and with the process in general (Transcript:29,30). The probity auditor did concede, though, that organisational separation is a difficult issue.

57. The committee agrees, and notes that it is not so much the ‘Chinese walls’ which are the problem, but rather how they are managed. Some submissions alleged that the ‘Chinese wall’ system did not work, but the committee received no substantive evidence to prove these claims.

58. However, if government is to maintain public confidence in these tendering processes the committee believes the public must perceive the process to be independent and fair. Consequently, the arrangements an agency undertakes to ensure separation within an organisation — ‘Chinese walls’ — should be made public, preferably before the tender

11 Procurement Construction of the new Woodford Correctional Centre

evaluation process begins. Keeping bidders informed of these types of arrangements should assist in addressing perceptions of the process being unfair.

Recommendation 2:

The committee recommends that:

(c) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

Cost of Tenders

59. Codd Partnerships submitted that the design-construct-operate approach to procurement imposes unreasonable costs on shortlisted tenderers (Submission 2:2). They estimate this project cost each consortium approximately $750,000 per bid, the architectural work being $250,000 of this amount (Submission 1:2,3). Australasian Correctional Services also estimate the cost of their bid at around $750,000 (Trancript:71). Australasian Correctional Services estimated their direct costs (actual expenses for consultancy fees and the like, rather than cost of time forgone) for the bid were around $250,000. The QCSC spent approximately $500,000 on their bid (QCSC correspondence 17 July 1996).

60. Codd Partnerships argued “the cost of being involved is greater than the profit which can be generated by a successful bid” and “the reward risk ratios for the participants are not within acceptable bounds” (Submission 2:3). There was general agreement among submitters that there should be some form of reimbursement for tender costs (Transcript:26,28,40,69).

61. In 1993 when the then Parliamentary Committee of Public Works conducted an inquiry into the Brisbane Convention and Exhibition Centre it heard evidence from several witnesses that the procurement system (design-construct) resulted in tenderers meeting unreasonably high costs (Public Works Committee Report 18:19). In that case, the Convention and Exhibition Centre Committee gave each of the shortlisted tenderers with $100,000 to help defray their costs (Public Works Committee Report 18:19). The Convention and Exhibition Centre Committee did this for two reasons: to recognise the range of consultants involved in preparing bids and their significant investment in

12 Procurement Construction of the new Woodford Correctional Centre

design research, and to encourage better quality submissions from the tenderers (Public Works Committee Report 18:19). The committee believes this practice has merit.

62. The committee believes short listed tenderers for projects should receive some reimbursement to help defray tender costs. However, it also believes that private sector bidders must accept some of the risk of making a bid. The committee does not believe the presence of an in-house bid affects in any way what level of reimbursement the principal should pay.

63. Part 6.1.2 of The Australian Standard — Code of Tendering states:

“The tender documents will conform to the following objectives: … (k) Avoid Tenderers having to provide undue amounts of design and documentation work prior to the acceptance of tender, unless the principal offers to pay for such work.”

64. To accommodate this the committee suggests agencies should conduct the tender process over two or more stages. The first stage should be an expression of interest for which bidders would receive no reimbursement. Final bidders selected from the expression of interest stage would be eligible for reimbursement. A public sector agency should be under no compulsion to pay reimbursement. Payment of reimbursement, and how much the agency pays should be at its discretion. Agencies will need to look at the issue of reimbursement and strike a balance between the cost of reimbursement, their ability to pay, and the potential benefits of higher quality bids some form of reimbursement may encourage.

65. Based on the statements of what bidders spent on the Woodford project, the committee believes a maximum sum of $50,000 reimbursement per $10m project cost is reasonable. For example, a bidder for a $50m project could receive up to $250,000 reimbursement for a full bid.

Recommendation 3:

The committee recommends that

(b) the Minister for Public Works and Housing table these guidelines in the parliament within 6 months of the tabling of this report.

Tender Brief Information

66. There was some discussion during the inquiry about the level of information contained in the tender brief documents, particularly in regard to the QCSC correctional philosophy (Trancript:38). Codd Partnerships suggest that the QCSC had an unfair advantage in that it was in the best position to interpret its correctional philosophy, and this philosophy was not adequately set out in the tender documents (Submission 2:1).

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Australasian Correctional Services also believes that correctional philosophy was a central plank in the evaluation process (Transcript:73). The committee agrees that lack of sufficient information can cause confusion and lead to misunderstandings. The Industry Commission suggests, “Agencies should specify service requirements in clear and accurate terms within an easy-to-follow format.” (IC;1996:322).

67. The committee does not agree with the allegations by Codd Partnerships and Australasian Correctional Services as it believes the tender documents clearly set out the QCSC’s correctional philosophy. Appendix D sets out the many references in the tender documents which refer to the QCSC’s correctional philosophy. Even though, in the committee’s opinion, there is ample evidence of the QCSC’s correctional philosophy in the bid documents, it believes that where a bidder is unsure or requires more information it should ask for clarification. The Standards Australia Australian Standard AS 4120-1994 - Code of tendering (p.10) states:

“Tenderers shall thoroughly familiarise themselves with the documents, and the site upon which the project is to be constructed, and if in doubt seek clarification from the Principal, to ensure that their tenders are complete and reflect a full understanding of the documents and the work required.”

68. In the Woodford project there was ample scope for bidders to seek clarification both from the TEC and the probity auditor. Bidders must accept some responsibility. If a bidder goes through the process being unsure of certain specifications it can not, at the end of the day, say lack of detail disadvantaged it when it did not seek clarification.

69. Another aspect of the tender brief information issue which concerns the committee is the ability of the principal to know exactly what it is getting for its money. During this inquiry and much the same in its inquiry into the Brisbane Convention Centre the committee received evidence that, in the absence of detailed design and precise specifications, the agency does not know what it will eventually get and that the project is prone to cost increases (Public Works Committee Report 18:21). Given the eventual blowout of Convention Centre costs the committee believes there may be some merit in increasing detail in tender briefs.

70. A note of caution here as an agency must strike a balance between the potential cost blowouts because of too little detail and the cost of evaluating a tender with more detailed information.

Recommendation 4:

The committee recommends that:

(a) the Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on compiling tender briefs for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in the parliament within six months of the tabling of this report.

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Evaluation Criteria/Weighting

71. To assist in evaluating the bids the TEC developed an evaluation action plan. The plan included a detailed analysis of each of the seven evaluation criteria, which were: · Corporate stability and experience · Design construction and equipping · Security arrangements · Prisoner management · Program delivery · Centre administration · Value for money. (QCSC; Request for Tender:25-27)

72. Much of the criticism over the evaluation criteria and weightings was that the lowest priced bid did not win the tender (Transcript:73). The committee has difficulty accepting this criticism as the Request for Tender documents clearly state that price was not the sole determining factor of which bidder would win the tender. Keeping this in mind the committee can understand the confusion and disillusionment arising from the lowest priced bid losing on some intangible value for money grounds, especially in light of what (some suggest) was an inadequate debriefing process (for a discussion of the debriefing process see para 96).

73. As far as the committee is aware there were no specific weighting of these criteria with the exception of ‘value for money’ which the TEC assessed in accordance with the provisions of the State Purchasing Policy (QCSC; Request for Tender:29). The State Purchasing Policy makes the point that value for money may not necessarily favour the lowest price (SPP; Section 1:9). The Industry Commission (1996:342) suggests that when assessing value for money agencies should not look only at price considerations but also at quality, suitability for purpose, whole-of-life costs, post-delivery service and suppliers flexibility. In accordance with the State Purchasing Policy the Request for Tender documents state — “The Tender Evaluation Committee may recommend a Contractor who is NOT the lowest priced conforming bid.” (QCSC; Request for Tender:23).

74. The Parliamentary Committee of Public Works came across this problem in its inquiry into the Brisbane Convention Centre project. In its report the committee states that while weightings are highly value laden it is unlikely publication of them would have altered the final decision (PWC;1993:20). In this case the committee tends to agree and believes the weighting of the criteria was not a significant determinant in the final decision.

75. Given this belief the committee believes publishing the weightings for criteria can do no harm. The committee recognises that publishing weightings may lead to some bidders placing more emphasis on heavily weighted areas. However, in the absence of any evidence to suggest this would happen the committee believes that principals should publish criteria weightings.

15 Procurement Construction of the new Woodford Correctional Centre

Recommendation 5:

The committee recommends that

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

Evaluation timetable

76. The advisory and technical assessment teams reviewed the three competing bids over a 12 day period from 31 May 1995 to 11 June 1995 (Submission 6B:4). The advisory and technical teams fully briefed the TEC on all aspects of the different bids.

77. Most submitters to the inquiry expressed concern over this short tender evaluation period. Barclay Mowlem suggest that the total evaluation time of 3 weeks is insufficient for a project which took 3 months to develop (Submission 4:9). Australasian Correctional Services describe the tender evaluation period as absurd, even given that the TEC put considerable resources into the evaluation process (Transcript:69).

78. Representatives of the TEC claim that while the time period for the tender evaluation was short it was sufficient (Transcript:17,60). Also, the probity auditor in his report to the minister states that while the timetable concerned him, he was satisfied that the process was completed satisfactorily. When questioned by the probity auditor members of the TEC believed that time pressures had not compromised the quality and outcome of their decisions (Submission 9; Appendix B:7).

79. Despite the assurances of the TEC and the probity auditor the committee has some problems with the tender evaluation timetable The committee understands the pressure of prisoner numbers on prisoner accommodation, but believes a few more weeks taken for the evaluation period would not have made a great deal of difference in the long term.

80. A principal may have more resources to use on a particular tender which would reduce the tender evaluation period. The Standards Australia Code of Tendering does not set out guidelines for how long a principal should take to evaluate tender bids. The committee does not believe it feasible to put a set time limit on evaluating tender bids as each tender is different, and different principals put different amounts of resources into the valuation process.

Time for presentation of tenders

81. On 12 June 1995 the three tenderers made formal one hour presentations of their bids to the TEC. Barclay Mowlem suggest the one hour time frame was insufficient for the

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TEC to have gained a reasonable understanding of their proposal for the final analysis (Submission 4:9).

82. The committee does not believe a one hour tender presentation is sufficient for a project of this size. On recent inspections of four hospital redevelopment sites in Sydney, Canberra and Hobart the committee discovered that the presentation time for similar value projects as Woodford prison was generally two hours, in one case, three.

83. Given the amount of resources and effort which goes into tenders it is understandable that the bidders felt a one hour presentation to be insufficient. The committee believes that there should be at least an initial two hour presentation which either the bidder or the principal could follow up with up to a further two meetings.

84. The timing of the presentation during the evaluation process is also a concern. At a private meeting several senior industry people advised the committee that having the presentation at the end of the tender evaluation process defeated the purpose of making a presentation. Their argument was that generally the principal had made its mind about the winning bid, on the basis of the tender documents, before the presentations take place. They suggested that often the principal would go through the presentation process simply to satisfy the bidders desire to make a presentation.

85. If this is the case the committee believes moving the presentation to a more appropriate time in the evaluation process would be worthwhile. Bidders should make their presentation at a stage which would allow them to fully explain their design, concepts and/or how their design suits their operational philosophy - before the principal has made an assessment based solely on the tender documents. If necessary the bidder should have the option to follow up the initial presentation with a further presentation if the principal needs more information, or the bidder has more information to present.

86. The committee is not making a recommendation in this area as it believes the assessment of when to have presentations and whether there should be further presentations is best left to the agency involved. However, the agency will need to keep in mind probity issues, such as not allowing bidders to supplement their bid or to start negotiations over design or operational matters.

87. One way of improving the quality of tender presentations is for the agency to arrange a pre-tender meeting. The committee supports the concept of a pre-tender meeting, to clarify any outstanding issues, between the principal and bidders. At this meeting the principal would have the opportunity to set out exactly what it wants from the project and what its requires of the bidders. Bidders would be able to clarify any design or operational matters they are unsure of. A pre-tender meeting would enable bidders to present a high quality tender.

Recommendation 6:

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The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on pretender meetings for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

Debriefing

88. The Industry Commission points out “the benefits of debriefing unsuccessful tenderers appear to be widely recognised” (1996:346). The benefits mainly come from unsuccessful tenderers being able to make higher quality bids in the future - in which case the principal also benefits from improved quality on any future projects it puts out to tender.

89. With the Woodford project all three consortia took the opportunity of a debriefing by the members of the TEC (Submission9:9).

90. Barclay Mowlem (Submission 4:10) and Australasian Correctional Services (Transcript:73) stated that they found the debrief to be inadequate. Both groups believed the level of information provided at the debrief did not adequately explain the evaluation criteria and the assessed values for each bidder. Barclay Mowlem suggest the “debrief should provide the tenderer with a quantitative and qualitative written assessment of their bid in comparison to other bids received.” (Submission 4:10) The committee agrees with this and believes it is not good enough for a bidder to be told at a debrief, with no supporting evidence, that their bid was not the best design or value for money.

91. The Infrastructure Association of Queensland believes that a proper debriefing process which gives bidders a good idea of why they did or did not get the job allows industry to improve and produces a better bid on the next tender (Transcript:44). Adopting this approach would create advantages for all involved in the process. The principal will benefit from improved tendering on its next job. Bidders will be able to make their bids for similar projects more competitive in the future.

92. The committee believes the best approach for organising a tender debrief is for the principal to follow a set debriefing process. This process should include a thorough assessment of how the bidder performed against of each of the selection criteria. The debrief should take place at a face to face meeting between the principal and the bidder. At the debrief the principal should provide the bidders with written comments on how they performed. Principals should, at the beginning of the tender process, decide a maximum time for debriefs to ensure that no bidder gains an advantage by having a longer debriefing session than other bidders. Bidders may choose to take less time than the specified maximum. The probity auditor should be present at debriefings.

Recommendation 7:

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The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on debriefing for inclusion in the State Purchasing Policy

(b) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

SCRUTINY OF THE TENDER PROCESS

The Probity Auditor

93. The role of the probity auditor is to ensure the tender evaluation process is as fair as possible for all parties concerned. The Industry Commission (1996:277,278) suggests that independent auditors (probity auditors) help ensure that competing bids are evaluated impartially and reassure participants of the integrity of the evaluation process. An agency may also use a probity auditor to develop probity guidelines and to conduct probity audits of evaluation processes (Industry Commission 1996:278).

94. For this project the then Minister for Police and Minister for Corrective Services appointed Dr Bob Grice as probity auditor (Submission 9:2). The probity auditor’s terms of reference required him to review and report on the following: · the tender evaluation criteria · the tender evaluation methodology · the evaluation committee processes · any other matters considered relevant in ensuring that an objective and independent process is carried out (Submission 9:Appendix B).

95. The probity auditor reported he was satisfied with the measures taken by the QCSC to ensure the evaluation process was fair. The probity auditor stated: “the Tender Evaluation Environment has been characterised by independence, competitive neutrality and objectivity: and the Evaluation Processes and methodology employed with respect to the identification of a preferred bidder for the project: · were appropriate · were professionally administered and documented · were consistently and fairly executed with respect to all bidders · utilised appropriate expertise, both internally and externally in the evaluation processes · appropriately addressed the evaluation criteria set out in the tender documentation · adequately addressed quantitative, qualitative and risk issues

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· specifically addressed competitive costs and accountability issues associated with the assessment of a private sector budget against the public sector” (Submission 9:Appendix B:3)

96. The committee sees the appointment of a probity auditor as an important step in sustaining public confidence in the competitive tendering and contracting process. Indeed, agencies should appoint probity auditors not just where there may be an in-house bid but also for all major projects. For a state government the committee sees a major project as being at or above $30m. However, there are several issues involving probity auditors which need discussion.

97. The committee believes there is room for improvement in the sequence of appointment of the probity auditor and the tender evaluation committee and advisory team. Agencies should appoint the probity auditor before the tender evaluation committee and advisory team. This would allow the probity auditor to have input into the membership of both teams, and into how an agency should undertake appropriate separation of bidding and evaluation teams.

98. The minister responsible for the project should appoint the probity auditor. Also the probity auditor should be accountable to the minister responsible for the project. The committee does not believe that making the probity auditor responsible to the Director-General of a department, who may be participating in the bid, is appropriate. The committee understands the difficulties of making the minister responsible. However, it feels that the probity auditor needs access to the minister.

99. Associated with the committee’s belief the probity auditor should have direct access to the minister is the ability for the probity auditor to intervene in the process at any time if he or she believes the process is not right.

Recommendation 8:

The committee recommends that:

(b) the guidelines require that the minister responsible for the project appoint the probity auditor and that the probity auditor be accountable to the responsible minister

20 Procurement Construction of the new Woodford Correctional Centre

(d) the guidelines enable the probity auditor to intervene in the tender evaluation process at any time

(e) the Minister for Public Works and Housing table these guidelines in the parliament within 6 months of the tabling of this report.

COSTING OF IN-HOUSE BIDS

Method of calculation

100. It comes as no surprise to the committee that all submitters critical of the QCSC tender process also had reservations about the calculation of the QCSC’s operating costs for its bid. Australian Correctional Services (Trancript:72) asks questions about how the QCSC funds insurance. How is it calculated? How is it audited? How is it accountable?

101. Where a private sector organisation sets a tender price other bidders generally regard it as an accurate reflection of the true cost to the bidder, because it will lose money if it sets its price too low. Granted, in some cases a bidder may make a loss making bid — for example, in order to generate work for itself. Nonetheless, other bidders can be confident that a private sector bidder has included all costs in its final tender price. This is not the case with public sector agency bids. If evidence provided to the committee is any guide, other bidders are not confident that a public sector agency has included all of its costs in its final price because public agencies, as a general rule, do not react to the usual rules of the market (Transcript:44,49,71). For this reason it is especially important that, by including all costs, direct and indirect, in-house bids reflect the true cost of completing the project.

102. It is important that private sector bidders have confidence in the process because as the Infrastructure Association of Queensland points out, uncertainty over how a public service agency making an in-house bid calculates its costs could lead to some potential tenderers not bidding against an in-house team (Transcript:44). This would defeat the purpose of competitive tendering. To ensure that in-house bids reflect as closely as possible the real costs of bids, the committee believes that in-house bids should include a percentage of departmental head office costs and tax equivalent charges, and should use accrual accounting methods.

103. Departmental head office costs might include such things as the payroll system, training facilities or some of the Director-General’s time. Public sector agencies need to develop a method of calculating what proportion of these costs they should include in a bid for a particular project. The Industry Commission in its report on competitive tendering recommends agencies use either an activity based costing method or a net avoidable cost method (1996:310). This report will not examine the relevant merits of these methods. Suffice to say the committee believes agencies should have a system for calculating these costs. The system should be transparent in that it should maintain external confidence in the costing of in-house bids (IC;1996:312).

104. In its report on competitive tendering the Industry Commission (1996:306) recommends:

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“In-house suppliers should be made effectively liable for all relevant taxes and charges, with payments made, where practicable, to a central revenue body.”

105. The committee believes the payment of tax charges by in-house suppliers will put them on a more even footing with private sector bidders. Furthermore, payment of tax charges by the in-house supplier to a central agency could help to create a more distinct relationship between the in-house supplier and the government (IC;1996:306).

106. There are some who have argued that public sector agencies should include a rate of commercial return in their bids. The commercial rate of return is effectively the cost of the capital to government. Private sector agencies argue public sector agencies have an unfair advantage in not having to make a profit. The committee has some difficulties with this proposition. How should the agency calculate the rate of commercial return? What is an appropriate rate of commercial return? Also there are instances where a private sector bidder may for its own reasons decide it strategically worthwhile to bid low on a particular project knowing they will make a loss. In this situation the public sector agency would be disadvantaged as, in many cases, it can not make those kinds of strategic decisions.

107. The arguments on both sides of the rate of return issue are inconclusive. The committee would like to see more work done on this issue in respect to the effect of including a commercial rate of return in the in-house bids of Queensland public sector agencies.

108. Agency decisions to commercialise sections making in-house bids would remove many of these problems. By commercialising a section the agency immediately makes it easier to quarantine costs of a project to the section responsible for running it. In the case of Woodford the QCSC could have commercialised those sections of the organisation responsible for operating the correctional centre.

109. The Industry Commission (1996:306-309) in its recent report on competitive tendering states that in-house bids should use accrual accounting when calculating bid costs. Use of cash accounting systems may result in an agency not including the full cost of such items as superannuation and capital equipment in its bid price (IC;1996:307).

110. The committee does not know whether the QCSC costed its bid using cost or accrual accounting methods. The committee believes that all in-house bids should use the accrual accounting method as it gives a more accurate picture of the true cost of making the bid.

111. The lack of confidence by the private sector in the costing of in-house bids concerns the committee. One witness stated to the committee that he did not believe the QCSC could run Woodford prison for the price they tendered (Transcript:49,50). The committee is not in the position to make an assessment on whether this allegation is true or false, however, it is concerned that private sector bidders may withdraw from the competitive tendering process. If this occurs the government will lose the benefits of the competitive tendering and contracting process.

22 Procurement Construction of the new Woodford Correctional Centre

112. The committee believes an independent audit of the in-house bid costing would allay private sector fears that in-house bids are cooking the books. There are many major consulting auditing firms available and capable of auditing such accounts. The results of these audits should not disclose the public sector agency’s direct costs as these would be commercially sensitive. The audit should be in the form of a statement which verifies the in-house bid costs as a fair and true reflection of the costs to the agency of fulfilling the contract.

Recommendation 9:

The committee recommends that:

(a) The Minister for Public Works and Housing direct the State Purchasing Council to develop guidelines on the calculation of in-house bid costs for inclusion in the State Purchasing Policy

(b) that these guidelines require independent audits of in-house bid costings

(b) That the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

Performance Monitoring and Enforcement

113. For the government to gain the full benefits available from the competitive tendering and contracting process agencies must effectively monitor contract performance (Asher; 1987:157). This usually involves a government agency monitoring a private sector contractor. However the Woodford case is different. How an in-house bidder which wins a tender contracts with itself is an issue which constantly arose during the inquiry.

114. In regard to its own operations the QCSC has entered into the following contracts (Submission 7:6,7):

· Building agreement for the design, construction and equipping of the Woodford correctional centre between the Director-General of the Queensland Corrective Services Commission (service provider) and the Queensland Corrective Services Commission Board (the principal) dated 4 September 1995.

This agreement warrants to the QCSC Board that the Director-General as principal (service provider) in the contract mentioned above will ensure that the centre is designed, constructed and equipped in accordance with the specifications.

· Service Agreement for the operation and management of the Woodford correctional centre between the Director-General Queensland Corrective Services Commission (service provider) and the Queensland Corrective Services Commission Board (the principal) dated 4 September 1995.

23 Procurement Construction of the new Woodford Correctional Centre

This agreement warrants that the Director-General as principal in the contract first mentioned above will ensure that the centre is established, operated and managed in accordance with the specifications.

115. Also, the QCSC must develop a Performance Based Resource Agreement which the Minister for Police and Corrective Services and Minister for Racing, on behalf of the QCSC, will enter into with the Treasurer, on behalf of the Cabinet (Submission 7:7). The committee has seen a copy of the draft agreement, however, the draft agreement seen by the committee did not include the building and services agreement on which the contract is based.

116. The agreement should set out in clear and unambiguous terms the performance criteria which the QCSC should meet. There should be no room for confusion over exactly what are the QCSC’s contractual obligations. The committee supports the requirement in the draft agreement for the QCSC to report to Treasury on a quarterly basis. The report must include financial performance and performance against the service and building agreements.

117. Private sector bidders have asked what would happen in the event the QCSC fails to meet performance criteria. This is a valid question. In evidence to the committee both the QCSC and a Queensland Treasury officer assured the committee that the QCSC would face penalties if it failed to meet contract requirements (Transcript:9,64).

118. The draft contract allows that escapes from custody, failure to address or periodically update sentence plans, certain deaths in custody, reduced capacity due to damage by prisoners and above average random drug testing results will incur a penalty. Unfortunately the draft contract the committee has seen does not set out what these penalties are. In other words, what will happen in the event the QCSC does not meet contractual obligations. The committee believes the contract should set out exactly what action Treasury will take against the QCSC if it fails to meet its contractual obligations and when it will take it.

119. To allay the fears of the private sector over the public sector agency not meeting contractual requirements, the committee believes Treasury should complete performance contracts with public sector agencies making an in-house bid before the tender evaluation process begins. As an agency is in the position to know what service and building performance levels it requires prior to the tender evaluation process there is no reason why Treasury and the relevant agency can not complete these contracts before the tender process starts. Keeping in mind concerns over commercial in confidence information, the committee accepts that the financial aspects of the agreement may have to wait until after the tender process is complete.

Recommendation 10:

The committee recommends that:

(a) The Department of Treasury develop guidelines for resource agreements between the Department and Treasury and public sector agencies making in-house bids

24 Procurement Construction of the new Woodford Correctional Centre

(b) the Department of Treasury make these guidelines available to public sector agencies making in-house bids

‘BUNDLED’ CONTRACTS

120. Contract size, length and scope can have various effects on competition. Bundled (eg. design/construct/operate) contracts may inhibit effective competition by influencing the ability of smaller enterprises or specialist contractors to participate in the tender process (Industry Commission Report:262). On the other hand, larger contracts can enhance the scope for strategic alliances and provide potential for innovation (Industry Commission Report:263). Bundling may cut the costs for the client of conducting the tender process by ‘rationalising’ two or more processes into one. It can also mean that the prime contractor (rather than the public agency) bears the costs of managing subcontracts (Industry Commission Report:264). However, the practice can increase procurement or ‘transition’ costs for the client by extending the time needed to evaluate the more complex tender submissions (Transcript:40). A bid for a bundled outcomes-oriented contract is also much more expensive for tenderers to prepare than a bid for a more traditional fully specified project (see para 59).

121. In this case the QCSC procured the centre using a design-construct-operate tendering process or a bundled contract. Private and public sector organisations formed consortia to submit tender proposals.

122. Some private sector parties dislike the design-construct-operate approach. In particular, Codd Partnerships — design consultants for one of the unsuccessful private consortia — argued in a submission and other evidence that “these contracts are unworkable in that there is no clear indication of what is to be provided for the money which is allowed ... there is very little certainty for the client and considerable flexibility for the builder” (Submission 2:2). They claimed the resulting uncertainty “about what is to be delivered for the sum agreed” has two possible outcomes (Submission 2:2):

· The clients’ and the builders’ understanding of what is to be provided is at variance, resulting in substantial additions or variations to the contract

· What is to be provided can be varied by the builder to ensure profit margins are maintained or enhanced.

123. Codd Partnerships cite dramatic cost increases during construction of the Brisbane Convention and Exhibition Centre (procured using a design-construct approach) as proof “the system does not have control of the dollars” (Transcript:40).

124. The committee received advice during its 1993 inquiry into construction of the Brisbane Convention and Exhibition Centre that the design-construct approach can adversely affect the quality of the final product, and conceded (Public Works Committee Report 18:21):

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“it is not inconceivable that ... distinctly different end results could be achieved from the one accepted proposal, depending on detail decisions taken during construction”.

125. At that time, the committee concluded the design-construct approach is appropriate where its time, value for money and flexibility advantages are essential (Public Works Committee Report 18:22). The committee argued that ‘large landmark developments which have unique characteristics’ could be better procured through a separate design concept competition, followed by more traditional tendering to a fully or partially documented design (Public Works Committee Report 18:22).

126. The QCSC have submitted to the committee informally that, in the case of the Woodford Correctional Centre, the prison’s actual design affects staffing levels (and thus also overall operating costs) so significantly that design, construction and operational methodology were inseparable in terms of the tender process. They argue that a more traditional specified approach to procuring the project would never have delivered the level of innovation and ‘world best practice’ the successful bid achieved.

127. The committee accepts this argument. It also acknowledges the concerns regarding the quality and final cost of projects tendered in this manner. The committee believes that all bundled contracts should be managed as joint ventures using a partnering approach (see para 132) so that the principal can maintain day-to-day control over and scrutiny of the project’s progress. The committee further believes that, providing such precautions are taken, and providing efforts are made to control expenditure by the shortlisted tenderers (see para 59) bundled contracts can deliver significant benefits for public infrastructure in terms of design innovation and value for money. Public sector agencies should utilise this method of project delivery in future.

26 Balance Of Public and Private Sector Involvement, Construction of the new Woodford Correctional Centre and Performance Of The Construction Authority, Contractors and Consultants

BALANCE OF PUBLIC AND PRIVATE SECTOR INVOLVEMENT, AND PERFORMANCE OF THE CONSTRUCTION AUTHORITY, CONTRACTORS AND CONSULTANTS

BALANCE OF PUBLIC AND PRIVATE SECTOR INVOLVEMENT

128. A consortium comprising the QCSC, Project Services Division of the Department of Public Works and Housing, and Concrete Constructions Group Limited is developing and will operate the centre.

129. The private sector — specifically Philip, Smith Conwell, Architects — developed the design for the centre with advice provided by the consortium members (Submission 7:9). The private sector — Concrete Constructions and various sub-contractors — is entirely responsible for construction of the centre. The QCSC acts as Principal for the administration of the construction contract (Submission 6B:7) but the Department of Public Works and Housing fills the role of building superintendent (Submission 7:9).

130. The QCSC is the operator of the centre, but is able to engage other private and public service providers to carry out certain functions or to provide services within the centre, such as training and activities (Submission 7:9). QCSC advised that a community advisory committee will be set up to provide a local community interface with the centre (Submission 7:9).

131. The committee believes there is an adequate balance of public and private sector involvement in the project, and that the various responsibilities are borne by those parties most able to do so.

PERFORMANCE OF THE CONSTRUCTION AUTHORITY, CONTRACTORS AND CONSULTANTS

The Concept of Partnering

132. The private sector is increasingly involved in providing infrastructure within Australia and around the world. Both public and private sector entities have expressed dissatisfaction with “the non-productive, adversarial aspects of traditional modes of contracting” (Blake Dawson Waldron:4).

133. A different model of managing public/private sector dealings, sometimes called partnering, has emerged. Partnering has been described simply as “putting the handshake back into business” (Blake Dawson Waldron:4), and aims to minimise cost and disruption to projects by focussing on mutual interests rather than individual benefits.

134. Partnering is not a contract as such, although it can be encouraged by the use of new and different kinds of contracts. It relies on some notions which may have come to be seen as quaint in recent times — concepts like ‘good faith’ and ‘give and take’ — and attempts to create a culture of cooperation between participants. Partnering encourages the participants to observe their contractual obligations voluntarily out of a genuine commitment to the project’s success, rather than because of the threat of

27 Balance Of Public and Private Sector Involvement, Construction of the new Woodford Correctional Centre and Performance Of The Construction Authority, Contractors and Consultants

formal legal sanctions (Blake Dawson Waldron:4). It tries to create an environment where both parties understand that neither benefits from exploiting the other.

135. The partnering method relies heavily on regular, mediated team workshops as a way of dealing with problems and issues. The workshops are a forum for testing agreement on shared objectives and assessing the commitment of different stakeholders to those goals (Blake Dawson Waldron:5):

“learning flows from demonstrating the link between enhanced project outcomes and Partnering values such as transparency, unity and consensus building. This linkage of values and outcomes ... helps to establish the desired project culture” (Blake Dawson Waldron:5).

136. Good communication and cooperation are essential to the success of projects which involve government agencies and private sector entities (Blake Dawson Waldron:5). Increasingly, governments procure projects by specifying desired outcomes (for example — in design) rather than providing detailed project specifications to which contractors will tender. This approach to procurement and delivery can and has delivered better projects, but it means that more negotiation is needed. In turn then, the success of future projects will depend largely on how well relationships between the proponents are handled.

Partnering for the Woodford Correctional Centre

137. Concrete Constructions proposed the partnering approach for the Woodford project (Submission 8:1). The QCSC are the construction authority, Project Services are building consultants and the contract manager and Concrete Constructions are the contracted design and construction managers.

138. Soon after Concrete Constructions signed a project documentation and construction contract in 1995, they prepared a paper titled “Woodford Correctional Centre — Contract Negotiation Model” (Submission 5:10). The paper clearly sets out the needs, common goals and roles of the respective parties (Submission 5:A1). It describes the process of contract negotiation that occurred between the consortium partners, as follows (Submission 5:A1-2): · the QCSC engaged Concrete Constructions as preferred builder after a competitive tender process which was capability (not price or profit) focussed · Concrete Constructions and Project Services managed the consultant team and procurement of the outline design · the QCSC’s requirements were defined in a comprehensive brief · Concrete Constructions provided extensive input during the design process · the QCSC ‘signed off’ the outline design · the QCSC and Concrete Constructions jointly developed a project document and construct contract which was specifically drafted to incorporate the ‘in good faith’ obligations of both parties · the contract sum was agreed as a lump sum.

28 Balance Of Public and Private Sector Involvement, Construction of the new Woodford Correctional Centre and Performance Of The Construction Authority, Contractors and Consultants

139. Apart from the contractual provisions, separate administrative guidelines identify common goals, detail an escalation procedure for the resolution of any emerging issues, and commit the parties to the use of partnering principles in contract administration (Submission 5:14).

140. The consortium holds regular partnering workshops. At the first workshop in November 1995 attendants formulated a mission statement, goals and further objectives for the project — the consultants and subcontractors for the project also ratified those (Submission 5:14).

141. Most key personnel regularly receive a partnering rating form to register feedback on the performance of the parties. A panel elected from the first partnering workshop review the results and take corrective action, where necessary, to address problems before they escalate (Submission 5:16).

Project Status

142. Concrete Constructions argue that the project (at this point) is a resounding success. They cite the following (as at 5 June 1996) as evidence (Submission 5:20): · the project is ahead of schedule · there is no cost overrun from the original contract sum · there have been no contractual disputes with any party · design is almost complete · construction is progressing well with no significant defects · safety statistics are excellent · industrial relations performance is excellent · there are a high standard of on-site environmental controls · client satisfaction is expressed by all partners.

143. Project Services back up the claims that the project is ahead of schedule, running to cost, relatively free of defects and of a high quality (Submission 6A:8). Project Services also advise that there have been no reported non-payments of subcontractors (Submission 6A:8).

144. The QCSC cite the same indicators of performance and state they have been ‘very satisfied’ with the performance of the partners to date (Submission 7:10). They also claim that “the time taken for this project through its varying stages has set new benchmarks for the delivery of a fully tendered correctional centre in Australia” (Submission 7:10).

Reasons for Success

145. Concrete Constructions identified three key advantages of the contract negotiation process used for this project (Submission 5:A2):

29 Balance Of Public and Private Sector Involvement, Construction of the new Woodford Correctional Centre and Performance Of The Construction Authority, Contractors and Consultants

1. The owner was able to maintain control over the design process and the procurement of a suitable Outline Design prior to formalising the assignment of documentation and construction risk to the builder.

2. The builder clearly understood the scope and nature of the necessary building works prior to agreeing a Contract Sum.

3. The owner was able to remove the gulf which usually exists between independently prepared design, and construction, and benefit from the design management and value engineering skills of the builder.

146. Concrete Constructions contend (Submission 5:14) that the ‘good faith’ clause incorporated in the project contract is ‘unprecedented’, in that it “binds the parties to act in a manner which is fair, reasonable and honest”, and confirms their agreement to specified common goals and their commitment to the use of partnering principles in administering the contract.

147. Phillips Smith Conwell Architects Pty Ltd (architects and principal consultants for the project with extensive experience in correctional facility design in Queensland) submitted that they are ‘extremely impressed’ by the performance of the parties (Submission 8:1). They cite three reasons for the project’s success (Submission 8:1): · the expertise of the QCSC and Project Services staff — “their focus on their specific objectives coupled with their flexibility of approach” · the competency and commitment of all Concrete Constructions staff · the professionalism and responsiveness of the Consultants — “their creativity and ability to provide innovative solutions”.

148. The architects also claim the partnering approach has proved extremely successful in this case:

“the level of co-operation and complete lack of contractual disputes on the project is something that we have never experienced on a project of this scale” (Submission 8:1)

149. The committee finds these testimonials impressive. Construction of the centre is currently ahead of the allowed time and within budget. The spirit of cooperation which exists between the consortium partners seems to have filtered down to the level of the workers on site — the project remains free of disputes, both contractual and industrial. The committee believes the available evidence points to the success of the partnering method in this instance, and provides good reasons to suggest the use of the model for other projects.

150. It is worth noting that although a highly structured approach to partnering methodology was used in this case, other joint public/private sector ventures have been successfully managed in a similar but much less formal manner. For example, the committee recently inspected some hospital projects in other states where a more relaxed approach to cooperative project management yielded some impressive outcomes. In those cases, the project partners managed to establish and maintain a

30 Balance Of Public and Private Sector Involvement, Construction of the new Woodford Correctional Centre and Performance Of The Construction Authority, Contractors and Consultants

‘culture of cooperation’ without a highly structured system of workshops or very detailed documentation of project goals. The committee accepts that factors such as project complexity and personalities will affect how easily cooperation can be achieved, and thus how formal the process needs to be.

151. In submissions to this inquiry, several parties urge the adoption of partnering for future projects — Concrete Constructions recommend that the ‘Woodford method’ of project delivery serve as a model for future projects, and claim that the form of contract is directly transportable to other projects. The committee is concerned that the State Purchasing Policy provide some guidance on a whole of government approach to the management and delivery of major joint venture infrastructure projects.

Recommendation 11:

The committee recommends that:

(b) those guidelines promote partnering, where it is appropriate, as the preferred approach

(c) those guidelines mandate partnering in all cases where projects are procured using a bundled (eg. design-construct-operate) contract

(d) the Minister for Public Works and Housing table these guidelines in parliament within 6 months of the tabling of this report.

31 References Construction of the new Woodford Correctional Centre

REFERENCE LIST

Archer K, (1987), The Politics of Privatisation: Contracting Out Public Services, Macmillan.

EPAC, (1995), Private Infrastructure Task Force — Interim Report, AGPS, Canberra.

Industry Commission, (1996), Tendering and Contracting by Public Sector Agencies, AGPS, Melbourne.

Infrastructure Association of Queensland, (1996), Draft Issues Paper on Queensland Government Policy Guidelines on Private Sector Involvement in the Provision of Infrastructure.

Parliamentary Committee of Public Works, (1993), Report of an Inquiry into the Brisbane Convention and Exhibition Centre, Goprint, Brisbane.

Queensland Corrective Services Commission, Request for Tender for the Design, Construction and Operation of the Woodford Correctional Centre.

Queensland Government, State Purchasing Policy.

Standards Australia, (1994), AS 4120-1994, Australian Standard, code of tendering, Standards Association of Australia, Homebush.

Woodford Correctional Centre, Evaluation Action Plan.

Woodford Correctional Centre, Tender Evaluation Advisory Committee Report.

32 Appendix A — Call for Submissions Construction of the new Woodford Correctional Centre

APPENDIX A — CALL FOR SUBMISSIONS

The following advertisement appeared in the Courier-Mail on Saturday 18 May 1996.

PUBLIC WORKS COMMITTEE Call for Submissions Woodford Prison The Public Works Committee, an all-party Committee of the Legislative Assembly of Queensland, inquires into public works constructed by the Queensland Government.

The Committee is currently undertaking an inquiry into the construction of a new correctional centre at Woodford. To help in its inquiry, the Committee is asking for submissions from interested individuals and organisations. The terms of reference for the inquiry are: 1. the necessity for and advisability of the work 2. the suitability of the work in meeting the needs and in achieving the stated purpose of the work 3. the extent to which the procurement process complies with the State Purchasing Policy 4. the balance of private and public sector involvement in the work 5. the performance of a) the construction authority for the work b) the consultants and contractors for the work with particular regard to the time taken for finishing the work and the cost and quality of it.

Submissions can be made to the Committee by writing to:

The Research Director Public Works Committee Parliament House George Street Brisbane Qld 4000.

The closing date for submissions is Wednesday 5 June 1996.

If you need further information, contact the Committee’s Research Director on (07) 3406 7689 or the Research Officer on (07) 3406 7926.

Len Stephan MLA Chairman

33 Appendix B — List of Submissions Received Construction of the new Woodford Correctional Centre

APPENDIX B — LIST OF SUBMISSIONS RECEIVED

1. Mr Ross Millican 2. Mr Edwin T Codd Group General Manager Managing Director Australasian Correctional Management P/L Codd Partnerships Pty Ltd PO Box Q134 QVB PO Box 1531 SYDNEY NSW 2000 MILTON QLD 4064

3. Mr Graham Buderus 4. Mr Doug Russell Branch Manager Executive - Special Projects Honeywell Limited Barclay Mowlem Construction Ltd PO Box 5236 Private Bag 3 WEST END QLD 4101 MOOROOKA QLD 4105

5. Mr M J Grierson 6. Mr Stephen Green A/Director-General Qld Branch Manager - Building Department of Public Works and Housing Concrete Constructions Group Ltd GPO Box 2457 GPO Box 941 BRISBANE QLD 4001 BRISBANE QLD 4001

7. Mr K Hamburger 8. Mr Ross Carseldine Director-General Project Director Queensland Corrective Services Commission Phillips Smith Conwell Architects GPO Box 1054 PO Box 479 BRISBANE QLD 4001 FORTITUDE VALLEY QLD 4006

9. Mr W E Shennan 10. Mr Tom Walsh Audit and Investigations Director Construction Manager - S E Qld Queensland Corrective Services Commission A E Smith & Son Pty Ltd GPO Box 1054 PO Box 14 BRISBANE QLD 4001 HAMILTON CENTRAL QLD 4007

11. Mr Peter Hollingsworth President Infrastructure Association of Queensland PO Box 579 ASHGROVE QLD 4060

34 Appendix C — List of Witnesses Construction of the new Woodford Correctional Centre

APPENDIX C — LIST OF WITNESSES

1. Mr Peter Rule 2. Mr John Forster Director, Corporate Services Queensland Corrective Services Commission Queensland Corrective Services Commission GPO Box 1054 GPO Box 1054 BRISBANE QLD 4001 BRISBANE QLD 4001

3. Mr Gary May 4. Mr Russell Wegner Department of Public Works and Housing Department of Public Works and Housing GPO Box 2457 GPO Box 2457 BRISBANE QLD 4001 BRISBANE QLD 4001

5. Mr Peter Wood 6. Mr Rob Deck Department of Public Works and Housing Project Manager - Design GPO Box 2457 Concrete Constructions Australia BRISBANE QLD 4001 GPO Box 941 BRISBANE QLD 4001

7. Mr Bill MacGinley 8. Mr Allan Robertson Project Director Project Manager - Construction Concrete Constructions Australia Concrete Constructions Australia GPO Box 941 GPO Box 941 BRISBANE QLD 4001 BRISBANE QLD 4001

9. Dr Bob Grice 10. Mr Edwin Codd KPMG Managing Director Central Plaza One Codd Partnerships Pty Ltd 345 Queen Street PO Box 1531 BRISBANE QLD 4000 MILTON QLD 4064

11. Mr Doug Russell 12. Mr Wayne Shennan Executive - Special Projects Audit & Investigations Director Barclay Mowlem Construction Limited Queensland Corrective Services Commission Private Bag 3 GPO Box 1054 MOOROOKA QLD 4105 BRISBANE QLD 4001

13. Mr Mike Montefiore 14. Mr Walter Ivessa Assistant Under Treasurer Assistant Under Treasurer Treasury Department Treasury Department GPO Box 611 GPO Box 611 BRISBANE QLD 4001 BRISBANE QLD 4001

15. Mr Peter Hollingsworth 16. Mr Les West President Convenor, Govt Liaison Sub-committee Infrastructure Association of Queensland Infrastructure Association of Queensland PO Box 579 PO Box 579 ASHGROVE QLD 4060 ASHGROVE QLD 4060

35 Appendix C — List of Witnesses Construction of the new Woodford Correctional Centre

17. Mr Terry Lawson 18. Mr Ross Millican Managing Director Group General Manager Corrections Corporation of Australia Australasian Correctional Management 973 Fairfield Road 44 Market Street MOOROOKA QLD 4105 SYDNEY NSW 2000

19. Mr Peter Sheehy Building Manager Thiess Contractors Pty Limited PO Box 1522 MILTON BUSINESS CENTRE QLD 4064

36 Appendix D — References to correctional philosophy Construction of the new Woodford Correctional Centre

APPENDIX D — REFERENCES TO CORRECTIONAL PHILOSOPHY

REQUEST FOR TENDER FOR DESIGN, CONSTRUCTION AND OPERATION OF WOODFORD CORRECTIONAL CENTRE

Invitation of Tender and Conditions of Tender Section 2.2 Interpretations of Performance Specifications ...... p.5 Section 2.3 The Commission’s Correctional Philosophy ...... p.6 Section 2.3.1 Commission Mission...... p.6 Section 2.3.2 Corporate Goals ...... p.6 Section 2.4 Centre Purpose and Role ...... p.7

Operational Specifications Clause 1.0 Centre Management...... p.3 Clause 1.1 Human Resources...... p.3 Clause 1.4 Workplace Health and Safety...... p.9 Clause 1.5 Community Interaction ...... p.13 Clause 2.0 Security and Control...... p.18 Clause 2.1 Physical Security and Control ...... p.18 Clause 2.2 Special Treatment, Separate Confinement and Disciplinary Procedures .... p.29 Clause 2.3 Centre Prisoner Offences ...... p.30 Clause 3.0 Centre Prisoner Management...... p.31 Clause 3.1 Cell Time...... p.32 Clause 3.2 Sentence Management ...... p.33 Clause 3.3 Case Management...... p.38 Clause 3.4 Centre Prisoner Employment ...... p.39 Clause 3.5 Programs...... p.40 Clause 3.6 Graduated Release Schemes...... p.45 Clause 3.7 Special Centre Prisoner Groups ...... p.46 Clause 4.0 Specialist Services ...... p.51 Clause 4.1 Food Services...... p.51 Clause 4.2 Health Services...... p.53 Clause 4.3 Psychological and Social Services ...... p.57 Clause 4.4 Interpreter Services...... p.59 Clause 4.5 Religious Services...... p.60 Clause 4.6 Library Services...... p.61 Clause 5.0 Support Services...... p.62 Clause 5.1 Centre Prisoner Property ...... p.62 Clause 5.2 Clothing and Bedding ...... p.63 Clause 5.3 Personal Hygiene...... p.65 Clause 5.4 Centre Prisoner Purchases...... p.66 Clause 5.5 Amenities Allowance ...... p.67 Clause 6.0 Centre Prisoner Interaction ...... p.68 Clause 6.1 Centre Prisoner Communications ...... p.68 Clause 6.2 Centre Prisoner Grievances and Complaints ...... p.70 Clause 6.3 Legal Services ...... p.71

Appendix Chapter 17 of QCSC Policy and Procedures Manual, Sentence Management Policy

37 PUBLIC WORKS COMMITTEE

No. Report Date Tabled 1 Annual Report for the Period Ending 30 June 1989 6 July 1989 2 Inquiry into the Proposed Construction by the Brisbane and 28 September 1989 Area Water Board of a Dam on the Albert River at Wolffdene (September 1989) Report for the Period 1 July to 19 October 1989 19 October 1989 3 No Public Works Committee Report No. 3 was issued 4 Annual Report for the Period 6 March to 30 June 1990 23 August 1990 5 Bundaberg Hospital Redevelopment - Stage Two 24 October 1990 (October 1990) 6 Aboriginal and Torres Strait Islander Housing - The Future 28 May 1991 (May 1991) 7 Annual Report for the Period 1 July 1990 to 30 June 1991 18 July 1991 8 Building Another Mental Institution or Housing a New 24 October 1991 Mental Health Service? - A Report on Community Debate Concerning Construction of the New Kirwan Psychiatric Rehabilitation Unit (October 1991) 9 Consultation and Planning for Schools and Colleges between 5 December 1991 State and Local Authorities (November 1991) 10 The Proposal to Build a 33-Level Office Block at 111 George 5 December 1991 Street (November 1991) Annual Report for Year 1991-1992 25 November 1992 11 Kirwan Psychiatric Rehabilitation Centre 2 March 1993 12 The Proposed Upgrade of the Townsville Correctional Centre 3 March 1993 13 Public Housing in Toowoomba 19 March 1993 14 The Development of the Sciencentre - the Old Government 13 May 1993 Printery 15 Queensland Centre for Advanced Technologies 13 May 1993 16 Cairns Courthouse, Police Headquarters and Watchhouse 20 May 1993 Complex 17 Replacement Schools for Herberton and Mission Beach 15 July 1993 Annual Report for Year 1992-1993 1 September 1993 No. Report Date Tabled 18 Brisbane Convention and Exhibition Centre 13 October 1993 19 The Construction of New Government Office 18 November 1993 Accommodation in Rockhampton 20 Health Facilities in Far North Queensland - 3 December 1993 Preliminary Report 21 Health Facilities in Far North Queensland - Final Report 25 February 1994 22 Cairns Convention Centre 28 April 1994 23 Landsborough Highway, Jessamine Creek, and University 28 April 1994 Road, Townsville Annual Report for Year 1993-94 2 August 1994 24 The Development of Mountain Creek High School 31 August 1994 25 Nambour Hospital Block 6 and Associated Matters 9 September 1994 26 Queensland Cultural Centre - Stage Five 28 October 1994 27 Technology Facilities Toowoomba College of Technical and 23 February 1995 Further Education 28 Development of the Teemburra Dam and Associated 24 March 1995 Irrigation Areas 29 Development of the Mackay Small Craft Harbour 31 March 1995 30 Development of the Hervey Bay Courthouse 6 June 1995 31 Development of the Bundaberg Police Headquarters and 6 June 1995 Watchhouse Annual Report 1994-95 19 October 1995 32 Redevelopment of the Cairns Base Hospital 23 July 1996 33 Expansion of the Lotus Glen Correctional Centre Farm 23 July 1996 Annual Report 1995-96 8 October 1996 34 Construction of the new Woodford Correctional Centre 29 October 1996

This Committee tables transcripts of evidence; however, they are not numbered and they are not included in this list.