Eyebrows raised over ‘odd’ Gympie council deal
GYMPIE council leaders' eyebrows have been raised over an "odd" contract which left no recourse whatsoever to try to recover an $89,000 blowout from the company that erred.
Councillors were forced to vote this week on whether to increase a $619,000 contract for a new roof on Imbil's water reservoir (one of the town's key water storage and supply tanks) to $718,000.
The fix was needed after it was discovered the company that provided the designs for the structure made a 3m measuring mistake.
This meant the roof needed to increase in size by 60 per cent., causing the cost to blow out.
However, acting chief financial officer David Lewis said a "caveat" in the contract left only the council to foot the bill.
It was a contractual decision which raised eyebrows.
Mayor Glen Hartwig said the word "strange" would be a "very generous adjective" for it, and asked if it was standard to "absolve the individuals of any obligation when they're doing work for us".
"It's not normal," CEO Shane Gray said.
"I'm not sure how that got through our procurement system but that's what we're currently looking at now.
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Mr Lewis said it was something "we need to address" with another 24 reservoirs in the region that will eventually need maintenance.
"We can't afford to have these quantum of errors moving forward," he said.
The Imbil reservoir's design was undertaken by Water Infrastructure Services through the government Local Buy scheme.
Council communications manager Sharna Rowley said other work was planned "at 8 reservoirs … in council's current 10 year capital works program".
The $89,000 increase was unanimously supported by councillors, but there was sparring over how significant the problem was.
Councillor Bob Fredman said "mistakes happen" and "this isn't as bad as it first seems" and the new price was ultimately what the council would have paid for the new roof if the figures had been right the first time.
Deputy mayor Hilary Smerdon disagreed.
"Normally when you have a variation in a contract … that's when you get stung. Very hard," he said.
Mr Hartwig said it was "embarrassing" the reservoir could not be measured correctly and "we had a clause in a contract that absolves the individuals for any responsibility for that error".
"There'd be very few in business that get such a wonderful opportunity to make money and get things wrong … without repercussions," he said.
Mr Fredman said the error was an embarrassment for those who made it, but they would not get off scott free - there would reputational repercussions if nothing else.
"They'll pay a penalty make no mistake," Mr Fredman said.
Mr Gray said this error was a good example as to why the council was reviewing the outsourcing of its design work.
"We've got a lot of internal knowledge … we should be utilising our own staff for that reason," he said.
"We weren't here when this (contract) was let and we didn't have any control on the contract … it would appear, from a due diligence perspective, the new systems we're implementing we shouldn't have this problem going forward - including contract clauses which do not give us the opportunity to pursue if there's errors made not on our behalf."