25 August 2011
© Commonwealth of Australia 2011 ISBN 978-1-74229-472-8
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Referral of inquiry Terms of Reference Conduct of inquiry Submissions, hearings and additional information Key documents Scope and structure of report Potential matters of parliamentary privilege Acknowledgments Note on references
PART I BACKGROUND TO THE TENDER
The delivery of air sustainment services to the MEAO The move to a single contract for air sustainment services from 2005 Re-test the market in 2009 The nature of the Australian air charter industry Controversies associated with previous air sustainment contracts Companies involved in the 2010 tender process Strategic Aviation Pty Ltd Adagold Aviation Pty Ltd Hi Fly Transportes Aereos, SA Individuals involved in the 2010 tender process Mr Shaun Aisen, Strategic Major David Charlton Relationship between Mr Aisen and Major Charlton Mr Mark Clark, Adagold Conclusion
PART II FACTUAL NARRATIVE OF EVENTS
The lead-up to the tender Decision to re-test the market Preparation for re-tender Establishment of the Air Transport Standing Offer Panel The Air Transport Deed of Standing Offer Development of the procurement strategy Consideration of probity issues in the tender planning stage Contemporaneous events during the lead-up to the tender The approach to market The RFT—AO/014/09–10 Preliminary probity concerns Industry briefing Contemporaneous events during the tender response period Tenders close and evaluation Evaluation criteria and process Conflict of interest management Confidentiality Probity risk management during the tender evaluation stage Identification of preferred tenderer and the source evaluation report (SER) Conclusion
Complaints about the tender process Conflicts of interest and confidentiality The tender specifications Adagold's fitness and propriety to contract with the Commonwealth Investigation of complaints Conclusion
AFCD review Scope and methodology Key findings Deficiencies in the tender process Review limitations The PwC review Engagement Methodology Findings and AFCD's response Limitations Conclusion
Correspondence with Strategic on completion of the internal review Consideration of internal review findings Commissioning external reviews Deloitte review Terms of engagement Methodology Key findings AGS Review Terms of engagement Methodology Key findings Allegations concerning the 2005 tender and AFP investigation Defence responses to the external review findings Limitations of the external reviews Limitations on the AGS Review Conclusion
Awarding of contract Performance of contract Contractual performance management Compliance with tender specifications Lessons learned Reforms to Defence procurement practices Reforms to conflict of interest management policies Conclusion
PART III COMMITTEE'S CONSIDERATION OF THE EVIDENCE
The committee's approach to assessing adequacy and appropriateness Achieving the objectives of good probity management The scope of the committee's findings and recommendations Areas for improvements The reviews and the reliance on their findings Conclusion
Terms of reference Matters of concern Probity risk management The appointment of an independent probity advisor to all Commonwealth aviation contracts Terms of reference
Defence policies on the disclosure and management of conflicts of interest The contractual management of conflicts of interest Adherence to risk management measures documented in the tender evaluation plan Conclusion
Decision to re-tender, specifications and timeframe The evidence Areas for improvement—documentation, consultation and certification Procurement Planning Communication with potential tenderers Tender evaluation Conclusion
Due diligence on tender respondents Matters of concern Fit and proper persons Financial and commercial capacity Capacity to deliver the contracted services to the requisite quality and standard Independent, expert scrutiny and continuing monitoring Broader application of the committee's recommendations Conclusion
Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia Phone: +61 2 6277 3535 Fax: +61 2 6277 5818 Email: fadt.sen@aph.gov.au
Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia
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