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Legislative Assembly for the ACT: 2010 Week 5 Hansard (6 May) . . Page.. 2011..

(11) Given that the Administrators stated that a contributing factor to the collapse of Akron was Akron was incorrect costing/estimating of projects, was Akron selected by the Government because it was the cheapest option.

(12) Given that the Administrators stated that a contributing factor to the collapse of Akron was Akron pursuing contracts at low margins to buy work, including contracts that ultimately were loss making, did Akron pursue a contract with the ACT Government to buy work at a low margin on which it ultimately made a loss.

Mr Stanhope: The answer to the member's question is as follows:

1. The Land Development Agency (LDA) is not aware of the exact number of contractors affected by the collapse of Akron. However, the most recent update on the "current status of administration"indicates that at the time of entering into administration, Akron had 138 projects on foot across Australia for 52 principals.

2. The number of LDA tenders for development work called prior to receipt of development approval:

2007-08 = 3

2008-09 = 0

2009-10 = 1

It should be noted that whilst the LDA called for tender following Estate Development Plan Approval, no construction has started prior to DA approval.

3. Akron was selected because its tender offered the best value for money at an acceptable risk as assessed against the mandatory and assessable evaluation criteria and compared with the tender responses from all other respondents. The Assessment Criteria were as set out in the Government Procurement Board endorsed Procurement Plan and Request for Tender.

The criteria included appropriate pre-qualification, past performance, financial capacity and relevant projects; technical and managerial skills and a demonstrated capacity to carry out tasks; and project delivery and timing.

4. 16 statutory declarations.

5. Sighted as part of the LDA payment process and then filed on project files.

6. In late September 2009, LDA staff became aware that Akron was experiencing some difficulties in Victoria. Then, in late October 2009, the LDA became aware of concerns that some Canberra based sub-contractors had not received amounts due in mid-October 2009.

7. The LDA has been working (including with the CFMEU) to ensure that local sub-contractors have been paid relevant amounts for work on the local projects as the amounts fell due by:

Arranging additional security in the form of a bank guarantee from Akron to protect the ACT Government's financial position and to enable LDA to make a payment to Akron and payments to sub-contractors;

Seeking agreement from Akron that prior to LDA payment all outstanding debts to sub contractors would be paid; and

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