The Canberra Institute of Technology (CIT) ignored several warnings from government officials about lucrative and vaguely worded contracts it provided for strategic advice and guidance.
- Growing public concerns forced the CWI board to suspend a contentious $5 million settlement for strategic advice
- Procurement officials have alerted the institute over several years to its vaguely worded contracts.
- The controversy concerns $8.5 million awarded to Patrick Hollingworth’s companies
The contract crisis culminated on Friday when the CIT board confirmed it had suspended the most contentious settlement – worth $5 million – in response to a request from ACT skills minister Chris Steel.
Purchasing officials had raised concerns four years ago about the consulting projects, saying that CIT had not clearly explained what the work was and how it could be evaluated.
ACT’s government procurement board (GPB), which advises on major procurement, also urged CIT to be open to competing bids and apply more reasonable timeframes to its contractual decisions.
Last week, ABC revealed that since 2018, CIT has awarded nearly $8.5 million worth of work to companies owned by mountaineer Patrick Hollingworth.
Hollingworth, whose companies Think Garden and Redrouge Nominees won the contracts, describes himself as a “complexity and systems thinker”.
The CIT board has now ordered an internal review of Think Garden’s latest contract, valued at $5 million, which was supposed to help the institute “progress in evolving its complex, adaptive and systems-informed approach to…transformation.”
That contract was signed in March despite a warning from Steel, who asked the board last year to explain what the company’s jargon really meant and apply “the highest levels of probity and fairness” to any further purchases.
On Friday, chairman of the board, Craig Sloan, told ABC that CIT had suspended the contract, “pending consideration of legal advice for options, including termination.”
He added that the board would conduct an audit that would help it assess the performance of CIT’s chief executive, Leanne Cover, who is responsible for contractual decisions.
Canberra liberals have expressed “deep concerns” about the agreements, saying they are “shrouded in secrecy”.
Opposition leader Elizabeth Lee also called on Steel to resign for not explaining the spending.
‘Such an approach risks significant criticism’: official warning
GPB raised several concerns about the proposed Think Garden contract when it met in December last year, according to the minutes of the meeting.
He noted that Ms. Cover had already approved a “single select” bid – closed to rival bidders – arguing that CIT’s needs were urgent.
“Such an approach risks significant criticism, as the full scope of these services has not been previously notified to the market and current agreements significantly increase the remuneration of the current provider,” noted GPB.
The meeting also discussed issues with the CWI’s increasing reliance on Mr. Hollingworth.
“Given the confidence CIT has in this particular change management consultant and their particular science-based methodology, it would be difficult to build a competitive bidding process,” said the GPB.
Among other concerns was a lack of information about what the contract would deliver and whether it would be worth it.
“Details around the sound market process and the basis for comparing rates to make a value for money assessment are limited,” GPB noted.
The ACT government also released documents on Friday that cite its procurement officials’ advice to CIT since 2018.
These officials repeatedly advised CIT to be more specific in describing what the contracts would deliver and how to evaluate them, and to allow other companies to bid more efficiently.
They also criticized the lack of details that Hollingworth’s company provided about the payments.
“While the bidder provided a fixed amount, they did not detail the breakdowns or components for that amount,” officials said.
The documents note that CIT has ignored procurement recommendations on multiple occasions, citing urgency. For a contract, he did not respond at all.
‘Disappointed’ minister calls for review of CWI chief’s management
Earlier on Friday, Steel said he had written to Sloan, chairman of the CWI board, to express his disappointment.
He asked Sloan to suspend the contract, if possible, and review Cover’s performance.
“[I] I am disappointed with your response and disappointed that the CWI governance arrangements resulted in a situation [that has] seriously damaged the CWI’s reputation,” Steel wrote.
“[While] hiring the executive director is an issue for the CWI board, I hope the board will ensure [her] the management of these contractual issues is duly reviewed.
“Given that his term is ending soon, I will be issuing a statement of expectations for the new chairman of the CIT board.”
ABC reached out to Hollingworth for comment on three occasions. He did not answer.
Published , updated