Inquiry finds arena tender process to be 'flawed'
A NSW PARLIAMENTARY inquiry into the granting of a contract to resurface two arenas at the Sydney International Equestrian Centre has found the tender process managed by the Office of Sport was flawed and that “robust probity standards” were not applied.
It also found that the chief executive of Equestrian NSW, Bruce Farrar, should have reasonably foreseen that his involvement in the tender process for contract number OoS17/18-02 would give rise to a perceived or actual conflict of interest, and that this conflict should have been disclosed.
It has recommended that concerns that evidence provided to the inquiry by three witnesses, including Mr Farrer, may have breached the Crimes Act 1900 should be referred to police for further investigation.
The report by the NSW Government Public Works Committee also recommends that NSW Independent Commission Against Corruption also give consideration to reopening its investigation into the granting of the contract and that the Office of Sport seek advice from the commission in relation to its procurement processes.
Findings
Finding 1
That the tender process for contract number OoS17/18-02 was flawed in that the Office of Sport failed to apply robust probity standards, including a failure to appropriately document numerous aspects of this procurement.
Finding 2
That the Office of Sport's failure to apply robust probity standards led to concerns about real or perceived conflicts of interest affecting the tender, and a perception of a biased and unfair procurement process that lacked the integrity required of NSW Government agencies.
Finding 3
That Mr Bruce Farrar, CEO, Equestrian NSW, should have reasonably foreseen that his involvement in the tender process for contract number OoS17/18-02 would give rise to a perceived or actual conflict of interest, and that this conflict should have been disclosed.
Finding 4
That the Office of Sport failed to uphold robust probity standards by allowing the close involvement of Mr Bruce Farrar, CEO, Equestrian NSW, in the tender process for contract number OoS17/18-02, as set out below:
Mr Farrar, on behalf of Equestrian NSW, sought funding from the NSW Government for the Sydney International Equestrian Centre upgrade
Mr Farrar discussed the upgrade with Mr Barrie Smith prior to the contract being awarded
Mr Farrar included Ebb and Flow technology in the Equestrian NSW funding request, knowing that this requirement would heavily favour Barrie Smith Motorsport
Mr Farrar was a member of the Technical Advisory Committee set up to provide expert advice on the tender. The Technical Advisory Committee ultimately recommended Barrie Smith Motorsport despite this not being the initial recommendation of the Tender Evaluation Panel, which recommended Capricorn Australia. Barrie Smith Motorsport was ranked second with the most expensive tender. The views of the Technical Advisory Committee helped Barrie Smith Motorsport win the tender.
Finding 5
That the Office of Sport failed to comprehensively investigate the issues relating to the granting of contract number OoS17/18-02, specifically by:
failing to include in the terms of reference for the O'Connor Marsden probity review the use of the second-hand material from Wallaby Hill at the Sydney International Equestrian Centre
failing to investigate the potential conflict of interest relating to Ms Alexandra Townsend, and her involvement with Equestrian NSW and Barrie Smith Motorsport
failing to investigate the potential financial benefit received by Ms Townsend as a result of the second-hand material from Wallaby Hill being used at Sydney International Equestrian Centre
failing to be transparent about the emerging issues relating to the contamination of the upgraded surface at the Sydney International Equestrian Centre.
Finding 6
That the use of contaminated second-hand material from Wallaby Hill for the upgrade of the arena at Sydney International Equestrian Centre was inappropriate and likely constituted a breach of the contract between the Office of Sport and Barrie Smith Motorsport.
Finding 7
That the Office of Sport failed in its duty to ensure value for money in the expenditure of public funds by not seeking to terminate its contract with Barrie Smith Motorsport following the installation of the second-hand material from Wallaby Hill at the Sydney International Equestrian Centre. This failure led to questions about the quality of the surface and an ongoing lack of confidence in the facility amongst some in the equestrian community.
Finding 8
That the Office of Sport was misled by Mr Barrie Smith about the availability of his product, using the excuse of dock delays to pursue the low-cost option of transferring used materials from a failed arena at Wallaby Hill (saving himself and OTTO Sport money). In evidence to the inquiry, Mr Smith was asked (by the Chair) if it was always his intention to source the materials from Ms Alexandra Townsend’s property, to which he replied 'Certainly' and then changed his answer to 'No'. The committee found Mr Smith to be an unconvincing witness.
Finding 9
That the Office of Sport has since taken steps to rectify the contamination of the upgraded arena surface at the Sydney International Equestrian Centre, and it appears that the surface is now safe for use. However, as it cannot be guaranteed that all contaminated material has been removed, parts of the equestrian community will continue to have a lack confidence in the upgraded arena surface.
Recommendations
Recommendation 1
That the NSW Independent Commission Against Corruption give consideration to reopening its investigation of the granting of contract number OoS17/18-02, with specific reference to the use of second-hand material from Wallaby Hill at the Sydney International Equestrian Centre.
Recommendation 2
That the Office of Sport continue to seek further advice from the Independent Commission Against Corruption to ensure its current procurement processes:
are robust and consistent with the highest probity standards
are compliant with any relevant legislative and policy requirements
ensure value-for-money for the New South Wales taxpayer.
Recommendation 3
That the NSW Government review the relationship between the Office of Sport and Equestrian NSW to ensure independence on the part of the Office of Sport and its administrative and decision-making processes.
Recommendation 4
That the Office of Sport ensure that the requirements contained in the new funding agreements with State Sporting Organisations are adhered to.
Recommendation 5
That the Office of Sport publish its standard funding agreement with State Sporting Organisations in its annual report.
Recommendation 6
That the NSW Government give consideration to extending the performance audit function of the Auditor-General to include audits of State Sporting Organisations.
Recommendation 7
That NSW Police give consideration to evidence received during this inquiry regarding Mr Barrie Smith, Mr Bruce Farrar and Ms Alexandra Townsend in order to examine whether there has been any potential breach of the Crimes Act 1900.
The full report can be downloaded below.
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