C2001/2878, Transcript of Proceedings [2001] AIRCTrans 1738 (30 July 2001)

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TRANSCRIPT OF PROCEEDINGS


AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER DEEGAN

C2001/2878

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under Section 170LW of the Act
by the Community and Public Sector Union and
Environment Australia re settlement of dispute

CANBERRA

2.07 PM, THURSDAY, 12 JULY 2001

PN1

THE COMMISSIONER: Can I take appearances, please?

PN2

MR A. OZOLINS: Andy Ozolins.

PN3

THE COMMISSIONER: Since we are on the record, can we go for the whole thing? Thank you, yes, Mr Ozolins.

PN4

MR OZOLINS: I am accompanied by MS DUNDAS from CPSU.

PN5

THE COMMISSIONER: Yes.

PN6

MR OZOLINS: And by MR HARDY from Environment Australia.

PN7

THE COMMISSIONER: Right, thank you.

PN8

MR R. HAMPSTEAD: If the Commission please, I appear for Media Alliance.

PN9

THE COMMISSIONER: Thank you, Mr Hampstead.

PN10

MR F. O'DONNELL: If the Commission please, I seek leave to appear on behalf of the Minister for Environment and Heritage in accordance with section 42(3) of the Act. Also I have appearing with me today are MR ANDERSON and MR BUTTERWORTH from the department.

PN11

THE COMMISSIONER: Thank you. Any objection? No. Leave is granted, Mr O'Donnell. Mr Ozolins, the CPSU asked for the matter to be listed as hearing, as I understand it. Go ahead.

PN12

MR OZOLINS: Commissioner, we were here last on - in conference, on 6 June, and as a result of that conference, it was agreed between the parties that the parties would meet and that management would provide further information regarding the processes to be used in the comparison between the preferred tenderer and the internal structure for the HR and Finance request for tender. That meeting was eventually held, but it was limited to exactly one hour and it was more in the nature of a briefing rather than a meeting, where issues could be discussed. No new information regarding the comparison process was provided to us. Everything that was told to us on that day regarding the comparison was information that we had already received.

PN13

Management did indicate that recent benchmarking of the finance area had occurred and that an assessment of the performance of both finance and HR areas had been undertaken. Management took on notice our request for details of both these events and they subsequently responded by email, and if I could just hand up the email.

PN14

THE COMMISSIONER: I will just mark it. That will be CPSU1.

EXHIBIT #CPSU1 EMAIL FROM MANAGEMENT

PN15

MR OZOLINS: Before I come to that email, could I just explain exactly why it is that we are here or attempt to explain exactly what it is that we are after. The department put out their request for tender and in that request for tender they had a section on evaluation of the tenders, the evaluation process to be used, the evaluation criteria to be used, the clauses in the tender which were mandatory and the criteria which were weighted, etcetera, etcetera. In all I think there were 10 criteria which will be evaluated. And it's quite a detailed explanation to the tenderers of how the tenders will be evaluated. And it is summarised at clause 16.5 as:

PN16

A three step approach will be adopted in the conduct of the evaluation as follows. Step 1 will be a technical worth assessment and step 2 will be the financial assessment and step 3 is the identification of a preferred tenderer.

PN17

At the end of that we have clause 16.6 which states:

PN18

Following step 3, an overall assessment of value for money will be conducted to identify whether or not the preferred tenderers provide overall value for money. This assessment will be conducted by comparing the preferred tender against internal service provision, as adjusted for improvements anticipated by DEH during the term of the services contract.

PN19

Now, clause 16.6 is the only thing in all the tender documentation which actually indicates that something will happen, that there will be a comparison process. There is no explanation of that comparison process, there is no detail. We have no understanding of what will be compared and what will not be compared. And unlike the detail which is provided for the tenderers, absolutely nothing has been provided regarding that clause 16.6. If I could just hand up the request for tender, and I have tabbed clause 16.6.

PN20

THE COMMISSIONER: It will be CPSU2.

EXHIBIT #CPSU2 REQUEST FOR TENDER

PN21

MR OZOLINS: If I can just go back quickly to clause 15 which starts - which is the evaluation process. It gives considerable detail there as to how things will be evaluated. Clause 16 talks about the evaluation criteria, and as I said earlier, there are 10 criteria which the department has identified as being used in the tender evaluation process. Four of those are mandatory and then five are weighted criteria. It goes into considerable detail as to what will be required. One of the criteria for example, is criteria S, business plan including a process of conduct of services, which covers things like financial management framework, the service level agreement:

PN22

...and tenderers are to provide a draft service level agreement which fully complies with the requirements of the service specifications in section B and the draft services contract contained in section C of this RFT.

PN23

Now, we do not know whether the internal organisation has also got to produce a service level agreement, a draft service level agreement or not. We do not know whether that would be used in the evaluation. In fact, we do not know anything about the comparison process whatsoever. We do not know how many of those criteria will be used. We do not know whether criteria D, for example, which is industry development strategy, whether that is applicable to the internal structure or not. Absolutely nothing has been explained about the comparison process at all. And whilst that is unfair to the internal structure, I think it is also quite unfair to whoever happens to be the preferred tenderer.

PN24

What we are seeking, Commissioner, is a draft order in the following terms, that Environment Australia undertake to do the following; meet with union market testing team and have full and frank discussions about the comparison process, with the opportunity for questions to be asked and detailed answers provided. That the information requested by the CPSU on behalf of members in Environment Australia regarding the comparison process be provided to the unit market testing team and three, that the RFT process is put on hold until the above consultation has taken place. And the comparison is referred to in clause 16.6 of section A1 of the request for tender documents.

PN25

THE COMMISSIONER: CPSU 3.

PN26

MR OZOLINS: The clauses in the Certified Agreement which we are using, or seeking to use, are the consultation with employees and employee representatives and those are clauses 601, particularly 602, 605 and 607 and 608 and 609. At 601, it states:

PN27

The parties to this agreement are committed to consultation with employees over matters that affect their working lives.

PN28

602:

PN29

The parties agree that this will be achieved through formal consultative mechanisms through which employee representatives have an opportunity for direct consultation.

PN30

And 605:

PN31

That EACC continues a formal consultative process that provides for employees through their representatives to have input into decisions that affect their working lives.

PN32

I suggest, Commissioner, that it is very difficult to have input into any decisions when the people do not even have the basic information as to how those decisions will be taken. Clause 607 amplifies the objectives of the EACC and 608:

PN33

Without limiting the scope of consultation, matters that will be discussed by the EACC, noting that some matters cannot be subject of consultation until details have been public announced, include work organisations and structures, human resources management policies etcetera, industrial relations policies, impact on staff of the implementation of Government policies. And parties agreeing to discuss workplace issues in a spirit of cooperation and trust and to the extent possible and at the earliest possible stage ensure that employees not only receive information on workplace issues that affect them, but also have an opportunity to contribute and have their views on these issues taken into account before final decisions are made.

PN34

I think that is the crux of our whole argument, Commissioner, that that information has not been provided. There is no information has been provided to staff regarding the comparison process that will be used, what will be compared, whether we will be comparing apples with apples, apples with pears, or whatever. Even at the last meeting, as I stated earlier, absolutely no new information was provided to us.

PN35

THE COMMISSIONER: Thank you, Mr Ozolins. Mr Hampstead, have you got anything you wanted to say?

PN36

MR HAMPSTEAD: I have got nothing to add, thank you, Commissioner.

PN37

THE COMMISSIONER: Mr O'Donnell.

PN38

MR O'DONNELL: Yes, thank you, Commissioner. I suppose, not surprisingly, Environment Australia does not necessarily see events in exactly the same light as the CPSU. Without seeking to overload you or burden you with paper unnecessarily, I think it is important that we do tender a number of exhibits. If I may, Commissioner, at the outset, I would like to tender a copy of a group of slides to be used at the meeting of the 21st with the unions which outlines the type of information that was provided.

PN39

THE COMMISSIONER: EA1.

EXHIBIT #EA1 GROUP OF SLIDES

PN40

MR O'DONNELL: Commissioner, I do not intend to go through each of the slides; they have been - for convenience sake, they have been sort of reproduced in miniature size, obviously. I would indicate to you, though, that Mr Ozolins has indicated that, you know, they knew information or substantive information was provided in relation to the matters at issue here today. I suppose by way of example, on the second page of that exhibit, we would certainly indicate that issues under the headings of Cost, Price, Comparison, on the left-hand side, Risk, Key Inputs, Quality and over the page Material for Assessment of In-House Servicing. I did, in fact, provide information to the union in relation to this matter.

PN41

I should also indicate that, it is certainly my recollection of the last conference before you, Commissioner, it was not necessarily that unions would be provided with new or additional information, but rather that the background of the process would be more fully explained. Certainly it would be our submission that the meeting of the 21st was an opportunity to do so. I understand that the meeting was brief. I think there were some logistical issues associated with that, accommodation issues and so forth, but in any event, I think that the information that was provided certainly met the obligations of Environment Australia with respect to the last comments.

PN42

Following on from that conference, I beg your pardon, following on from that meeting, the department then conducted a session for employees and if I could just hand this up.

PN43

THE COMMISSIONER: EA2.

EXHIBIT #EA2 INFORMATION REGARDING SESSION FOR EMPLOYEES

PN44

MR O'DONNELL: Again, Commissioner, this depicts a further slide presentation. You will note that it is slightly larger than the previous one and that was based upon feedback from the meeting of the 21st and the attempt was made to perhaps even more fully explain the position to staff. So, to that extent, with respect to consultation, it was with the union, a subsequent meeting with the staff and following that meeting with the unions and staff, a further document was produced and if I may tender that.

PN45

THE COMMISSIONER: EA3.

EXHIBIT #EA3 DOCUMENT PRODUCED SUBSEQUENT TO MEETING OF 21ST

PN46

MR O'DONNELL: Commissioner, this document basically is a fairly standard question and answer document. It reflects a number of questions that have been raised through these consultative exercises with the unions and staff and obviously some attempts by the agency to field those questions and provide answers to little common questions to start with the asking, in relation to this whole process. So, it is fairly extensive and gives 22 questions and answers. So, Commission, I think, with respect to consultations since the last conference before you, certainly there has been a genuine attempt on the part of Environment Australia to meet its obligations, with respect.

PN47

Commissioner, the next thing I would like to tender, if I may, is a letter from Ms Dundas of the CPSU to Mr McInerney from the department. That letter is dated 28 June this year.

PN48

THE COMMISSIONER: EA4.

EXHIBIT #EA4 LETTER FROM MS DUNDAS TO MR McINERNEY DATED 28/6/01

PN49

MR O'DONNELL: Commissioner, this letter was written by

PN50

Ms Dundas following the meeting of the 21st with the unions and outlines CPSU's dissatisfaction with what it regards as a sort of inadequate provision of information in relation to the matters before you. Once again, I suppose accuses the agency of being in breach of consultation clauses of the Agreement, specifically clause 609 and required a response from the department almost immediately. That response was provided and if I can hand that up.

PN51

THE COMMISSIONER: EA5.

EXHIBIT #EA5 DEPARTMENT'S RESPONSE TO MS DUNDAS'S LETTER FOLLOWING MEETING OF 21ST

PN52

MR O'DONNELL: Commissioner, firstly if I take you to the second paragraph of that letter, and I think it is worthwhile quoting from the second sentence:

PN53

The department is committed to the consultation processes set out in the certified agreement 2000/2002 ...(reads)... every recent monthly meeting of EAC -

PN54

That is the national consultant forum, Commissioner:

PN55

- usually at some length. There have also been separate discussions with the CPSU and a range of ...(reads)... has been given to the CPSU when your suggestions have not been used.

PN56

It then just goes on to provide a further background to where we are at this point. And I think what is also important here, Commissioner, is down towards the - it is probably about the second third last sentence of that first page:

PN57

In our view, the premature release of management assessments would seriously compromise the evaluation ...(reads)... until the marketing testing processes are completed.

PN58

Commissioner, for some time now it has been explained to the CPSU that there are issued of probity, legal questions surrounding the handling of information relating to the tender. It has been accepted by the CPSU that they do not have a role in the evaluation process. Commissioner, to that extent if I could, I would like to tender a document.

PN59

THE COMMISSIONER: I will mark it EA6.

EXHIBIT #EA6 LETTER FROM ASSISTANT SECRETARY, POLICY AND ACCOUNTABILITY BRANCH OF ENVIRONMENT AUSTRALIA DATED 30/1/01

PN60

Commissioner, this document is a letter from the Assistant Secretary, Policy and Accountability Branch of Environment Australia dated 30 January 2001. It is addressed to Commissioner Wilks who, obviously you will recall, dealt with this matter initially. And it contains an attachment and the attachment essentially is an understanding reached between the parties about how matters would have been progressed back in January of this year. If I can specifically draw your attention to paragraphs 3. And I understand it, this was agreed to by the union:

PN61

The evaluation plan will not be the subject of consultation with unions and union nominees will not be part ...(reads)... to Environment Australia Consulting Committee.

PN62

Now, Commissioner, I think at that point in time it was well understood and recognised by all that the union would not have a role in that evaluation process. And to provide further background in relation to that, I would like to tender a letter to the department from Ernst and Young.

PN63

THE COMMISSIONER: It will be EA7.

EXHIBIT #EA7 LETTER TO DEPARTMENT FROM ERNST AND YOUNG

PN64

MR O'DONNELL: You will appreciate, Commissioner, that the tendering process, market testing and so forth is a very complex matter and of course the department is advised by all manner of legal representatives and commercial firms in this area. Commissioner, this letter goes to the question of the record of release of information, going to the Financial Human Services that the CPSU has requested. And specifically, I draw your attention to the second paragraph:

PN65

Ernst and Young has advice to us on previous occasions is that the partner should release any information ...(reads)... with a potential external service provider.

PN66

It goes on to say:

PN67

The Commonwealth Government's market testing objectives are to ensure that agencies are inter alia ...(reads)... severely financially disadvantages in contract negotiation.

PN68

Commissioner, it goes on over the page then to give some examples of how the release of such information may in fact compromise the department. And those examples, the two examples listed, the first one is:

PN69

Base line costing information is contained at the in-house service provision information. Negotiations were ...(reads)... including in areas such as quality and timeliness of service.

PN70

The second example provided, Commissioner, is that:

PN71

Information strengths and weaknesses of the internal service provider is also contained in the in-house ...(reads)... also impacts upon the capacity to negotiate improvements right across the tender, including price.

PN72

Commissioner, that is the sort of information and advice that has been open to the department. There is just one other that I would be seeking to tender.

PN73

THE COMMISSIONER: If you like to identify it I will mark it. If you would just identify what it is, Mr O'Donnell, for the record.

PN74

MR O'DONNELL: Commissioner, this is a copy of an email from a Mr de Jong from Phillips Fox Corporation, to Mr McInerney from the department and it is dated on 24 April this year.

PN75

THE COMMISSIONER: It will be EA8.

EXHIBIT #EA8 EMAIL FROM MR DE JONG FROM PHILLIPS FOX CORPORATION TO MR McINERNEY DATED 24/4/01

PN76

THE COMMISSIONER: Thank you, go ahead.

PN77

MR O'DONNELL: Once again, Commissioner, this is from a leading legal firm in relation to these probity issues, and if I can take you to the third paragraph which says:

PN78

From a probative prospective it is very important to ensure the key information is equally available to all ...(reads)... not to make such information available to tenderers at any particular time.

PN79

Commissioner, the combination of the Ernst and Young advice and Phillips Fox advice I suppose really is saying, that in a sense the release of this type of material to staff, and in this case, would be to the CPSU, would in fact be counter productive and may in fact threaten the entire process, it would possibly disadvantage the agency and by extension, the Commonwealth and all the advice is not to do it. Commissioner, within those sorts of bounds the department has attempted to provide as much information as possible and you will be thankful to know this is the last piece of paper I intend to tender today. This is an email from Mr Eaton to Mr Neil Hardy of the CPSU dated 11 July this year.

PN80

THE COMMISSIONER: EA9.

EXHIBIT #EA9 EMAIL MR EATON TO MR HARDY 11/7/01

PN81

MR O'DONNELL: Commissioner, I have tendered this, I suppose with respect to comments made by CPSU that no information was forthcoming and so forth but ostensibly what this email does, I'll just read it:

PN82

Neil, at the briefing on 21 June and the subsequent email to Pat McInerney, ...(reads)... data, the study reached the following conclusions.

PN83

Then it goes on, Commissioner, to actually identify a number of those conclusions. Commissioner, that information has been provided. As I understand it, it is the latest information that has been provided to the union and was done so only yesterday. By and large, Commissioner, I think what we have got before us is a dispute relating to the application for certified agreement with respect to consultation. Certainly it is our submission that the department is not in breach of the agreement. It has consulted not only to the letter of the law with respect to the agreement but also in the spirit of the agreement as well. It has consulted to the point where special status has been given to CPSU delegates in the process to date.

PN84

We have got to the point where the information that has been sought by CPSU, is information which according to all advices received, should not be released. Ultimately it will be released at the conclusion of the process but at this point, for probity reasons, the view is that it should not be released. This has been explained to the union on a number of occasions. Obviously the union is unhappy and dissatisfied with that point of view. Nevertheless, the department has a responsibility to the Commonwealth to protect its interests. The sanctions at this point in time are well within that scope. Commissioner, it is not the department's view that consultation is at an end. It will continue to consult in so far as it is able.

PN85

It continues to provide information as requested and it will continue to do that. Quite frankly, Commissioner, I suppose the department is a bit disappointed that we find ourselves back before you again today. The position that has been adopted thus far by the department, in my submission, is perfectly reasonable in the context of the commercial exercise of its undertaking and obviously at a given point in time decisions will be made by the secretary relating to the outcomes of market testing and what may follow from there. So, at this point, Commissioner, I don't think there's terribly much more that we need to add except I perhaps should just comment on our attitude to the draft order that has been presented by the CPSU.

PN86

Not surprisingly, Commissioner, we would oppose the making of such a draft order. As I have indicated to you in my submission, the department has, in fact, completed its obligations with respect to consultation. Certainly there is no prospect in the department's view that the RFT should be put on hold and once again I simply reiterate that within the context of the provision of the certified agreement relating to consultation the department will continue to provide whatever information it is able to provide and it will continue to have meaningful dialogue so long as CPSU is prepared to participate. So I have answered that point, Commissioner.

PN87

THE COMMISSIONER: Mr Ozolins?

PN88

MR OZOLINS: Thank you, Commissioner. Can I turn to the email last exhibit which was handed up by Environment Australia, which I also believe is the first exhibit that the CPSU handed up and that is in response to certain questions on benchmarking. I stated, I think, earlier that the benchmarking we had been led to believe was recent benchmarking which had been undertaken by the finance area, or by ANAO on the finance area rather and it showed up that the finance area was travelling along quite well. Well, the email shows that information was actually based on 1998/99 data, which I suggest is probably just a little bit out of date, and it also shows that while the quality is in the top 25 per cent group for both global and Commonwealth the efficiency and the cost in middle 50 per cent - or the middle 50 per cent would go anywhere from 26 down to 74. We do not know where they are. Could be anywhere.

PN89

Might I suggest that those are not particularly good figures so I think the information that we were given at the briefing has shown up the department in quite a good light. It does not show up in the email information that we have been provided. The second last paragraph on baseline costing information, if negotiations were entered into with tenderers to reduce the cost of their bids, tenderers would be reluctant to lower their bid prices if they knew that internal costs were higher. Release of costing information would also reduce the capacity to negotiate improvements elsewhere in the tender, including an area such as quality and timeliness of service. I must say I concur with that, Commissioner, and I do not think at any stage that we asked for a detailed costing information to be delivered to us. We have asked in the past for the value of any improvements since the beginning of 2000 to the current date, but we have not at any stage asked for the baseline costing because we do actually understand that that sort of information if provided to tenderers could put them at an advantage.

PN90

I might just hand up annex B to section B of the current working arrangements which are part of the request for tender documentation that was supplied by the department and also an email from Neil Hardy to myself yesterday regarding staffing in Environment Australia.

PN91

THE COMMISSIONER: Do you want to tender these?

PN92

MR OZOLINS: Yes, thank you.

PN93

THE COMMISSIONER: All right, the first document, annexure B to section B current working arrangements is CPSU4 and the email will be CPSU5.

EXHIBIT #CPSU4 ANNEXURE B TO SECTION 8 CURRENT WORKING ARRANGEMENTS

EXHIBIT #CPSU5 EMAIL MR HARDY TO MR OZOLINS

PN94

MR OZOLINS: I might turn to page 4, clause 2, staffing, which refers to:

PN95

The finance branch consists of 41 full time employees as shown in the table below.

PN96

And the table is broken down into branch head, then executive assistant 2, budget coordination section 5, cash management and procurement 11, financial section 15 and SAV support unit 8 and similar sort of information as provided for the people management branch. So, the detailed staff numbers are given but it is not difficult to get information from the public breadboard and the email that I handed up is classification levels in Environment Australia and the information is from the Australian Public Service Statistical Bulletin 1999/2000 and it is shown in there that an ongoing staff in Environment Australia APS1s were ten staff, APS2 were 145 and APS3 were 369 people.

PN97

Now, looking at those figures it is quite easy to see that the majority of the staff in these finance branch and people management branch are probably at APS2/3 or EA2 or EA3 level. It is not too difficult if you have any knowledge at all of staffing levels to work out roughly what the baseline costing would be and this is information that was provided by the department to the tenderers. Any tenderer worth his salt would be able to go and get the classification levels off the public record and put it in with the tables that were supplied by the department. So we are actually quite shocked that the department has provided such a detailed costing information to the tenderer while at the same time telling CPSU that they can't provide us with information. At no stage have we been after base line costings for any of the areas that are being market tested. We would not have been silly enough to do so. And as I stated earlier we are quite shocked that management has provided such detailed information to the tenderers.

PN98

Turning back to the earlier comments about the evaluation plans and evaluation processes, can I state quite categorically that we are not after information on the evaluation plans and we are not after information on the evaluation process, but we are after information on what it is that will be compared, and possibly, how that comparison will take its place - and with the "how" that would be a big picture overview - but certainly what it is that is being compared, which parts of the tender documentation will be compared to what in the internal structures. So is all the selection criteria applicable to the internal structure or is it only part of it?

PN99

And what we would also want access to is how the internal structures rate. And when I say "we" I think we have made it quite clear that we have been asking for that information to be provided to the union team which was set up after the first Commission hearing before Commissioner Wilks. Those people have all signed deeds of confidentiality, I believe, or certainly have recognised that the process is a confidential one and that they will not release that information. They have already had access to the request for tender documentation before it went out to the market. There has been no suggestion of any breach of the confidential undertakings that those staff have taken and we ask that those staff be given access to the information that will be used in the comparison process.

PN100

We do not believe that that will provide any extra information to the tenderers. But if there is a risk of any extra information being provided to the tenderers, can I go back to the email from Luke de Jong to Patrick McInerney which discusses the probity perspectives and the solution. If there is problem with providing information to staff, and I think the probity information is actually talking about all staff and not staff who have signed deeds of confidentiality, but if there is a problem then the solution is to provide that information to the tenderers at the same time. We have no problem with tenderers being given access to the comparison process which will take place between the tenderers and the internal organisation. So if there is a chance that someone will get an unfair advantage, we are asking that all that information be provided to all the parties concerned, but at the very least that it is provided to the staff so that they have an understanding.

PN101

On the matter of consultation, I have stated before and I am sure that this will be put back at me again is that consultation has taken place ad nauseam, but what have we consulted about? We have not consulted about the comparison process that will be taking place between the preferred tenderer and the internal structure, and that is what we are asking for consultation to be about, on that process, on the comparison. We accept that there has been a lot of other consultations; some of it useful, some of it not so useful, but there has been no consultation on that point. Every time we have asked for consultation on that we have been told that we cannot have it because it is going to breach probity protocols, it is going to breach something or other, there is advice from the business adviser, there is advice from the probity adviser. Well, the advice from the probity adviser is in that second last paragraph of the email, and the solution is there. If they wish to provide us with information and there is a problem with probity, provide the same information to the tenderers. Thank you, Commissioner.

PN102

THE COMMISSIONER: Thank you, Mr Ozolins. Mr O'Donnell, Mr Ozolins has raised a few extra things there so if you would like to have another go?

PN103

MR O'DONNELL: Commissioner, just briefly. Perhaps I will just respond to the last point made by Mr Ozolins. And I think the issue of providing the information to everyone - which I think is really what is being advocated here - misses the point that we were trying to make and it does not take into account the advice from Ernst and Young, and that is to the effect that well, if you do that you run the risk then of people then putting in bids, constructing pricing arrangements and so forth against what may be high standards of current performance or perhaps low standards of performance, or whatever, and in that sense the advice quite clearly is that you could well be acting contrary to the provisions of the Financial Capital Management Act.

PN104

Now, I think that is what is being said and has been said many times. The union may not accept the proposition but I think that the position being put by the department is a perfectly reasonable one based upon the advice that it has received and, of course, in exercise of its own judgment in this area. So perhaps, Commissioner, rather than just regurgitate all of this again, I might just leave it at that.

PN105

THE COMMISSIONER: Yes, Mr Ozolins?

PN106

MR OZOLINS: Commissioner, can I just clarify something?

PN107

THE COMMISSIONER: Yes.

PN108

MR OZOLINS: We are not after the assessment of the internal structure. I mean, we would like that and we have asked for that and at this stage the department has said that they cannot provide it. That is not what we are asking for today. We might ask for it tomorrow, but that is not what we are asking for today. We are asking for details of what will be compared. So for example, is the quality of the internal structure one of the criteria that is being compared? Are the service levels that are currently in place, are they being compared?

PN109

THE COMMISSIONER: Have you ever reduced these questions to writing, Mr Ozolins, for the department?

PN110

MR OZOLINS: I believe we have in the past, Commissioner, but I am not quite sure where they are. There has been so much correspondence between the department with us - and as you can see even by the brief documents at the table today that it is easy to get lost. But really, that is what we have asked for is, what criteria is being used to assess the internal structure.

PN111

THE COMMISSIONER: All right. Thank you, Mr Ozolins. Mr O'Donnell?

PN112

MR O'DONNELL: Commissioner, could I assist just here on this?

PN113

THE COMMISSIONER: Yes.

PN114

MR O'DONNELL: I apologise to you because whilst I was carrying on I did not actually mark my own exhibits. I was hoping somebody else might have along the way. But if I can just take you back to the first set of slides that I handed up which was the slides used in the session with the union on 21 June, and if I can take you to page 5 of that.

PN115

THE COMMISSIONER: Page what?

PN116

MR O'DONNELL: I beg your pardon. It is the set of slides of the staff, sorry. The larger set. The sorts of things, although perhaps not definitive, but indicative things that Mr Ozolins was raising here is really covered off by things like cost price comparison, quality issues, key inputs, quality at stage two, risks, and those sorts of things. So I think in general terms it is not totally foreign to the union and to the staff as to the sorts of things that are being engaged here. Now, whether the union feels that they have been answered as definitively as perhaps they otherwise want, I do not know, but certainly those things have been discussed with the union, certainly have been discussed with employees at these sessions, so just by way of assistance.

PN117

THE COMMISSIONER: Mr Ozolins?

PN118

MR OZOLINS: Commissioner, look, this is roughly the information that was provided to us. Now, if I went to tender and went to a tenderer and said that, "We will be evaluating on the cost price comparison and the aim is to get like for like comparison of the cost element of external and internal service provisions", they could not respond to that. And if the quality in stage two establishes whether there are any operational benefits associated with outsourcing or the services compared to the current internal service delivery arrangements, they could not tender on that. And if, for example, the assessment team may look at the pros and cons of the respective service delivery models and how they fit with EA's culture and business requirements, they could not tender on that, or if they did tender on it what sort of tender would it be?

PN119

Now, when the department went to the tenderers they put out in great detail the sort of criteria that they would be using to evaluate the tenders, how they would be comparing them, how they would be scoring, and none of that information has been provided to staff. Now, that is the information that we are after. Look, we are quite aware that risk involves a comparative assessment of the business operation and financial risk associated with both internal and external delivery. Well, yes, I mean that is a motherhood statement; it does not tell us anything. There is absolutely no detail in there. And when I said earlier that no new information had been provided to us, it had not been. It is statements like that which have been thrown up at us time and time again. There has been no detail. There is absolutely nothing there that we could consult about.

PN120

THE COMMISSIONER: Thank you, Mr Ozolins. All right. I am not prepared to make an order in the terms that the CPSU was after, but what I am prepared to is direct the CPSU to commit every question they wish to ask the department to writing by 19 July as specifically as they possibly can. The department is to answer as they can by 26 July. If the answers and their department does not have to answer every question obviously the CPSU puts, but if they could put why they are not answering, the questions they will not answer, if the CPSU are not prepared to accept the answers that have been provided they are to notify the Commission on 27 July the matter will be re-listed for a conference on 30 July and we will sort it out, all right?

PN121

MR O'DONNELL: Yes, that is fine, thank you.

PN122

THE COMMISSIONER: Thank you, Commissioner.

PN123

MR OZOLINS: Thank you, Commissioner.

PN124

THE COMMISSIONER: I will adjourn.

ADJOURNED INDEFINITELY [2.58pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #CPSU1 EMAIL FROM MANAGEMENT PN15
EXHIBIT #CPSU2 REQUEST FOR TENDER PN21
EXHIBIT #EA1 GROUP OF SLIDES PN40
EXHIBIT #EA2 INFORMATION REGARDING SESSION FOR EMPLOYEES PN44
EXHIBIT #EA3 DOCUMENT PRODUCED SUBSEQUENT TO MEETING OF 21ST PN46
EXHIBIT #EA4 LETTER FROM MS DUNDAS TO MR McINERNEY DATED 28/6/01 PN49
EXHIBIT #EA5 DEPARTMENT'S RESPONSE TO MS DUNDAS'S LETTER FOLLOWING MEETING OF 21ST PN52
EXHIBIT #EA6 LETTER FROM ASSISTANT SECRETARY, POLICY AND ACCOUNTABILITY BRANCH OF ENVIRONMENT AUSTRALIA DATED 30/1/01 PN60
EXHIBIT #EA7 LETTER TO DEPARTMENT FROM ERNST AND YOUNG PN64
EXHIBIT #EA8 EMAIL FROM MR DE JONG FROM PHILLIPS FOX CORPORATION TO MR McINERNEY DATED 24/4/01 PN76
EXHIBIT #EA9 EMAIL MR EATON TO MR HARDY 11/7/01 PN81
EXHIBIT #CPSU4 ANNEXURE B TO SECTION 8 CURRENT WORKING ARRANGEMENTS PN94
EXHIBIT #CPSU5 EMAIL MR HARDY TO MR OZOLINS PN94