Bruised and tender

Hydroquip owner Anthony Mcfadden’s quoted prices were “manipulated” by a City of Perth employee. Photo by David Bell

Prices manipulated, undeclared conflict, complaints mishandled, CCC misled – and Anthony Mcfadden has to face them all again

“IT is a lot worse than I first thought,” says a business owner who missed out on a contract due to “manipulation” of the City of Perth’s tender processes.

The Power inquiry slammed the council over its handling of Welshpool-based company Hydroquip’s 2017 tender application to maintain the city’s bores and pumps, and of owner Anthony Mcfadden’s subsequent complaint to the WA Corruption and Crime Commission.

Hydroquip had held the tender for about 10 years.

Inflated

But council staffer Blake Humble, who was overseeing the tender process and also sat on a panel assessing the applications, inflated Hydroquip’s quoted prices 

in an analysis used to make a recommendation to then-CEO Martin Mileham.

That manipulation contributed to Western Irrigation winning the contract.

What the other panel members didn’t know was that Mr Humble had an undeclared conflict of interest due to his relationship with Western Irrigation’s managing director Andrew Ogden, who’d previously written job references for him ‚Äì including for his role at the council. The pair also sat on the executive of industry body Irrigation Australia WA.

Commissioner Tony Power found that Mr Humble’s actions were “at the very least, affected by bias”.

Mr Mcfadden said losing the big contract had a huge financial impact on Hydroquip, which had to lay off one employee.

Three years later he’s won the contract back after the tender selection was outsourced to the WA Local Government Association, but he can’t believe most of the staff the inquiry found had let him down so badly were still employed by the city.

A couple of them still call the shot on what needs repairing or replacing, and Mr Mcfadden says that’s another area where bias can creep in.

“Given that ratepayers will be footing the $7 million bill for the inquiry, you have to ask what has changed,” he says. 

After he lost the tender Mr Mcfadden complained to the CCC, suspecting something was up given he had the cheapest prices around. 

The CCC asked the city to look into Mr Mcfadden’s complaint, but for reasons no one could “cogently” explain to the inquiry, an independent probity review commissioned by the council went through multiple drafts where a council employee cut out any references to the allegations Mr Mcfadden had raised.

Although the first draft of the probity review by Stanton International included a “suggestion” that “the city may wish to consider referring the matter to the CCC to investigate”, that never made it to the final version.

Instead the council told the CCC that the report had found nothing but “some procedural inconsistencies”.

Excluded

Mr Power found that “misleading” and criticised the council for failing to take any action to ensure it didn’t happen again.

The inquiry found Western Irrigation should have been excluded from the contract at the outset because it failed to meet a mandatory requirement, but in less than one year it had billed the council more than half of what had been estimated for three years’ work.

The Voice asked the council what action had been taken to overhaul its tender processes, whether staff had been trained or counselled, and whether the the city’s complaints handling process had been changed since the misleading report to the CCC.

Chair commissioner Andrew Hammond said the city will respond to the report’s 341 recommendations in a report back to the local government minister to be considered at 

a council meeting in the near future. For now “the city will not be commenting on any other specific matters, findings or considerations” from the report.

By DAVID BELL

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