The man responsible for cutting red tape across Victoria has penned a scathing criticism of a Latrobe City Council policy shift.
In a letter to Latrobe City mayor Sharon Gibson, Red Tape Commissioner John Lloyd said council’s procurement policy represented “a significant departure from normal practice” and introduced a “questionable layer of regulation”.
Mr Lloyd said as a result of council officers and the chief executive being stripped of the authority to approve most contract variations on building projects, it was “possible reputable contractors may choose to withdraw from working for your council”.
He cited one example where a $17,000 variation took a month to be approved, with a delay cost of $50,000 to the contractor, which would be passed on to council.
The letter has prompted a backflip on the variation restrictions, along with other controversial aspects of the policy.
Councillors unanimously supported mayor Gibson’s motion on Tuesday night to return some spending power to the chief executive.
Cr Gibson, who had previously supported the unpopular new policy, told the meeting she moved the motion in light of the commissioner’s letter.
“It’s about getting on with the job and making sure we don’t grind to a halt, with works costing ratepayers money,” she said.
Acting chief executive John Mitchell will now be able to approve total variations for a contract up to $200,000, rather than variations of more than $15,000 requiring approval from a special committee.
He will be allowed to authorise construction works worth $200,000 or less, up from $50,000 under the strict guidelines.
Mr Mitchell will be able to approve the purchase of goods and services up to $150,000, rather than the $50,000 limit.
As part of the new policy introduced in September last year, transactions over $50,000 had to go to tender.
The threshold will now be more than $200,000 for construction and $150,000 for goods and service.
Cr Gibson denied the timing of the motion was a slight on former chief executive Paul Buckley, who resigned early this year.
Civil Contractors Federation chief executive John Stewart, who has heavily criticised the procurement policy, welcomed the backflip.
“We are very pleased, but from our perspective it is extremely disappointing that councillors didn’t listen to the industry and the ratepayers in the first place,” Mr Stewart said.
The new procurement policy was compiled by councillors Dale Harriman and Michael Rossiter and adopted in September last year.