AUSTRALIA – The Australian Department of Immigration and Border Protection has been slammed for its handling of offshore detention centre contracts, some of which were entered into without prices being set first.

The report from the Australian National Audit Office (ANAO) detailed concerns over the contracting of welfare, security, catering and cleaning services, adding that the department accepted a Broadspectrum contract which had blown out by more than $1 billion without seeking alternative quotes.

The report stated the department was unable to demonstrate it had secured valued for money in three of the four hiring processes for centres on Nauru and Manus Island.

For example, the department did not require Transfield to provide a proposal specifying services to be delivered and a price when establishing the centres in 2012.

“As a result, it was very difficult for the department to demonstrate that it had conducted a robust value-for-money assessment which considered the financial and non-financial benefits of the proposal,” the report stated.

The report went on to say prices were not settled until contracts with service providers were entered into.

When consolidating contracts for Nauru and Manus Island in 2013 and 2014, the bid for Manus Island exceeded historical costs by between $200 million and $300 million.

The report went on to state that due to falling numbers of asylum seekers being detained, the cost of said detention was more than double the estimated figure.

“The prime minister had requested that per-head costs be lower as a result of retendering the contracts, but the department did not calculate a per-person cost,” it stated.

“Finance advised the ANAO that under the consolidated contract, the per-person-per-annum cost of holding a person in the offshore processing centres in Nauru and on Manus Island, was estimated at $573, 111, at the time of the Mid-Year Economic and Fiscal Outlook 2015-16. Prior to consolidation, Finance estimated the cost at $201,000.”

Immigration Minister Peter Dutton has blamed previous Labor governments for the mishandling detailed in the report.

In a statement, Dutton said “total responsibility for the problems and processes outlined in the report falls upon Labor”.

“Labor must acknowledge that its incompetent performance placed an impossible burden on the public service which was charged with reopening regional processing centres in Nauru and Papua New Guinea within a matter of weeks,” he said.

However, the report did detail issues with the open tender process from 2014 to 2016, saying insufficient consideration was given to the use of benchmarking to determine overall value for money.

“The value of expanded services was estimated by an external adviser (KPMG) at between $594 million to $835 million above historical costs,” it stated.

“The government had not provided policy authority to expand the services or increase the funding value of the contract to accommodate service enhancements or adjustments.”

In a statement, the department said the report had to be considered in the context of the “unique operational environment” it faced at the time.

The statement went on to outline the amount spent on the centres fell over the past four years, “from a peak in early 2012-13 of $698,000 average per person down to $529,000 per person in 2015-16”.

“When capital expenditure is excluded, the average cost per head has been relatively stable, at between $427,000 (2012-13) to $464,000 (2015-16),” it added.

“Expenditure was consistent with the department’s overall policy authority under Operation Sovereign Borders. Funding and appropriation levels were adjusted, in accordance with the cabinet-agreed processes, at the Commonwealth Budget updates over the period in question.”

The department has agreed to both recommendations put forward in the report, which outlined the need to address skill and capability gaps among staff.

Greens Senator Nick McKim said he was “genuinely flabbergasted” at the report.

McKim, the Greens’ new immigration spokesperson, said the department had acted in some circumstances without government authority.

“The Department of Immigration and Border Protection would have terrible trouble organising the efficient purchase of a beer in a brewery,” he said.

- ABC