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Probe into hotel quarantine security contracts

The Victorian Auditor-General is investigating whether probity rules were followed when the government awarded multimillion-dollar contracts to security companies to provide guards at quarantine hotels.

The second wave of COVID-19 infections in the state stemmed from an outbreak among guards and hotel staff at Rydges hotel on Swanston Street. An inquiry into the hotel program found private guards were poorly trained and the government’s infection control protocols were substandard.

Department of Jobs, Precincts and Regions secretary Simon Phemister at the Coate inquiry.

Department of Jobs, Precincts and Regions secretary Simon Phemister at the Coate inquiry.Credit:

Auditor-General Andrew Greaves said in a letter last week that he was reviewing specific government purchases including the security contracts. “The review is examining a range of probity issues, focused on managing conflicts of interest, but also has regard to … financial regularity,” he wrote.

Although Mr Greaves did not name the company specifically, much of the scrutiny has focused on the $30 million contract awarded to Sydney-based Unified Security, which was not on the government’s preferred list of security providers. Unified did the bulk of the security work and operated at Rydges, and evidence to the Coate inquiry into hotel quarantine showed government officials held serious concerns about how and why Unified was selected.

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Jobs Minister Martin Pakula did not sign off on security contracts. Instead, this was done by Department of Jobs, Precincts and Regions secretary Simon Phemister, who, The Age can reveal, has the ability to spend up to $300 million without ministerial approval. Most other department heads can authorise only about $10 million.

Mr Greaves’ letter came in response to questioning from Opposition Leader Michael O’Brien, who told The Age Victorians “deserve answers about how Labor’s failures led to 801 deaths, economic devastation and a state in lockdown for 16 long weeks”.

Department of Jobs officials expressed concerns about probity in the days after the Unified contract was signed, evidence tendered to the Coate inquiry revealed. It was executed by a departmental director who placed Mr Phemister’s electronic signature on the contract on behalf of the secretary. Department officials were also worried about why Unified was chosen.

The inquiry heard that at 12.30pm on March 27 – as national cabinet was meeting to discuss hotel quarantine and about 12 hours before any government official said they contacted Unified – Unified’s boss emailed managers saying they “urgent[ly]” needed to complete infection control training by 2.30pm on the same day.

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