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Letter To Ken Boston

To Mr Ken Boston

6th February 2012

 

Dear Sir,

We are a group of Operators for the Assisted School Travel Program in the Campbelltown area. Having heard you are currently conducting an inquiry into reasons behind the recent problems, we believe it imperative we provide you with further information.

Summary

1)      Schedule of Rates and potential for more runs being declined

2)      Legislation and Industry Benchmarks

3)      Misleading nature in the acceptance form (Tab C)

4)      Unlawfulness of the entire Tender Process

5)      The possible moot financial evaluation

6)      2012 Contract

7)      Contributing dates

8)      The personal side

The problems the ASTP experienced last week do extend from the new and unacceptable rates offered to Operators but the problems also run deeper. Even with the extra amounts offered for Term 1, it does not make these runs sustainable. Currently, many of the ‘runs’ now operating do so at a loss and operators cannot continue to suffer these losses. We are urging you to please help resolve this situation soon before we are left with no choice but to continue handing runs back.

NRMA 2011 daily running costs for an average run in an 8 seater car is $61.62. The Legislation pay rates including Super and Work-cover as per the Fair Work Australia Passenger Transport Award is $93.77. The total minimum car and wage expenses of $155 (without any profit and admin costs) exceed the department offered rates for all runs having Klms under 40. Currently, the median run length is 48.5 Klms, which means almost 50% of operators are running their business at losses of up to $26.16 per day. It is unacceptable that any Principle Contractor can offer rates less than what is necessary to perform the work. This will only encourage illegal and unsafe practices.

 

While the ASTP department and the Tender Team were aware in October that the rates were not acceptable to the operators they were misled when 90% of the acceptance forms were returned in November. If you look at Tab C you will notice there was no other choice – other than to withdraw completely.

We are asking you Sir, that with your investigation, you also investigate the legalities of this entire Tender Process which ultimately caused the ensuing debacle. It did not always adhere to the NSW Government Procurement Policy in areas such as “…….framework of probity and fairness to suppliers” and “unambiguous” disclosure. The Tender Contract was at best misleading, and some clauses, such as 4.5 of Part B, now the centre of this problem, were totally “rewritten”, opposite that of the verbal interpretations given by the procurement officer David Malcolm at the Pre Tender meetings.

The evaluation process, which included the added expense of a registered accountant to establish the Tenderers financial suitability, was done using projected income which did not eventuate. This it seems would negate the whole financial side of the evaluation.

The current 2012 contract contain ambiguities that need clarification in certain areas, not the least being amendments to sub clause 16.1.

Dates with contributing factors.

21st October 2010 – Posting of the new Schedule of Pay Rates (Tab B)

Upon receipt of this, both the ASTP Dept. and Tender Evaluation Team were flooded with emails about contractor disapproval.

2nd November 2011 – Due date for acceptance form (Tab C)

While 90% of operators may have ticked ‘Accept’ at Tab C, this by no means meant 90% would accept runs. There was simply no other choice allowed us on this form.

31st December 2011 – Contract for 2011 ended.

This severs our standing with the ASTP and with low rates on offer for 2012, many Operators sold vehicles and approved drivers took other employment.

13th January 2012 – The first allocations arrived (Campbelltown area)

Contrary to statements made in the media, ‘runs’ were not, and never are allocated in September.

18th January 2012 – New Contracts mailed.

Contracts are again ambiguous and Clarity is needed before many will sign.

 

The Tenderers invested a lot of time and money with this long and overdue Tender. They have waited five years to correct their ignorant mistakes made in the 2002 Tender. The department had been fully aware, and acknowledged at the meetings, that many operators had been suffering financial hardship in the five year period since the last tender expired. Some operators in recent years earning net $10 per day after expenses, yet our well researched offers, were not negotiated at all, but simply thrown out and replaced with unviable rates, set not by an “Industry Benchmark” as was stated in the Tender Contract.

We understand the government’s prime aim in tendering is ‘value for money’ and this takes precedence over our aim, ‘value for service’ but here, there needs to be a compromise.

We would be happy to provide you with more details if required. Thank you for your time.

 

Yours Sincerely

Rhonda Hinds

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