QUESTIONS ON NOTICE › Defence: Middle East Area of Operation Contract (Question No. 1935)
Senator Bob Carr: The Minister for Defence has provided the following answer to the honourable senator’s question: (1) Contract Savings since 2010 are; (a) For the period 23 November 2010 to 22 November 2011, estimated savings were $13,174,695 or 22% in comparison to the second preferred tender response. (b) For the period 23 November 2011 to 30 June 2012, the estimated savings were $9,617,358 in comparison to the second preferred tender response. (2) The total estimated savings in the 19 months since contract commencement and 30 June 2012 is $22,792,053. (3) Amounts paid to the contractor since 2010 are listed below. These figures exclude the cost of fuel, which is billed and paid separately: (a) For the period 23 November 2010 to 22 November 2011), 68 routine weekly flight missions were undertaken, with approximately $28,288,432 paid to the contractor. (b) For the period 23 November 2011 to 30 June 2012, 46 routine weekly flight missions have been undertaken with approximately $19,371,704 paid to the contractor. (4) The total amount paid to the contractor in the 19 months since contract commencement and 30 June 2012 is approximately $47,660,136. Amounts paid for fuel since 2010 are listed below. (a) For the period 23 November 2010 to 22 November 2011, the cost of fuel for the 68 routine weekly flight missions is estimated at $19,422,568. (b) For the period 23 November 2011 to 30 June 2012, the cost of fuel for the 46 routine weekly flight missions is estimated at $13,138,796. The total cost of fuel in the 19 months since contract commencement up to 30 June 2012 is estimated at $32,561,364. (5) The Australian Federal Police (AFP) did not undertake an investigation in relation to the 2010 contract process. Defence referred allegations of criminal conduct to the AFP in September 2010 in connection with the 2005 contract. In August 2011, the AFP wrote to Defence and advised that it had completed its investigation into the 2005 contract and did not identify sufficient evidence to commence a prosecution against any person. Consequently the case has been finalised. (6) Defence recently determined to exercise the first extension option which will see a continuation of the service under the current contract until 21 November 2013. The decision making process took into account contractor performance and the considerable cost savings to Defence. There was no requirement to re-tender (advertise) the service as the existing contract makes provision for up to two extension options of one year each at the discretion of Defence.